This is the second part in our three-part blog series on prize competitions, or prize challenges as some people prefer to call them. In Part 1 we shared the power of prize competitions as a means to generate open innovation solutions, and thus accelerate R&D. In this blog post, we will help you understand what makes a successful prize competition. Finally, in Part 3, we will help you understand how to choose the appropriate crowd to compete for your prize challenge.

We always say that the best thing about a prize competition is that you get what you incentivize. Though the worst thing about a prize competition is also that you get what you incentivize. The design of your prize challenge will be what impacts your results – so it is very important to get that design right.

Here are a few pointers:

Define a problem and not a solution. If you define a solution, then you are not going to get the best innovations – you are going to get iterations of the same idea. Of course, you need to put some parameters around the end goal (e.g., no bigger than X, able to be powered by Y, fits in Z, etc.) so the results are useable by you in your application. But, other than that, leave it up to the participants to determine the solution. You’ll be surprised by what you get!

Make it worthwhile for teams to compete. What are you offering them as incentives? Is a prize purse enough? Or is one even necessary at all? How about offering an investment in their company? Or a job with your company? Or testing in your labs? Or, for an internal challenge, dinner with the CEO at their home sounds one up on simply mentioning their name in the employee newsletter.

As mentioned earlier, it is not always about the prize money – it is about the other opportunities they get for being associated with you and your prize competition. Maybe you’ll be able to think of something to offer that money can’t buy.

Don’t ask for too much. All too often people see prize competitions as the Holy Grail – they think they can just ask for everything and the kitchen sink and give only a few weeks to complete it. Think about what you really need and do not ask for more than that. Then give a realistically appropriate amount of time (but not too much time) for the teams to complete the task.

Remember, it is the participants’ time and money at risk so if you are asking for too much in too little time they are not going to compete for your prize competition. We’ve seen too many prize challenges fail because only a handful of participants competed.

Don’t forget the SMART acronym and apply it to your open innovation prize challenge. Is it Specific enough (without being unduly restrictive); will results be Measurable; is it Achievable, and not an issue that has dogged your industry for years; are you being Realistic; and is your Timetable reasonable?

Please note that you are not alone – there is a plethora of open innovation platforms to host prize challenges, and the choice of which one to use depends on numerous criteria. Such as whether you are running a software prize, or want to focus on co-creation, or want to get a technology out of it, or want to do an internal prize competition, and so on.

And there are also many organizations (including Hyperloop Innovation) that will help you design and operate your prize challenge. We encourage you to find an advisory partner of some description to work with you. With the best will in the world, the platform(s) you talk to might offer solutions and a challenge format that suit them better than they suit you.

Please keep an eye out for Part 3 of this blog series. In it we’ll help you choose the appropriate crowd to compete for your prize competition.

Main image source: nesta