The easiest way to solve a tricky problem, as the successful Netflix Prize recently proved, might be to offer a cash prize for the best solution. But administering these contests is no joke — just ask Netflix, which still faces complaints about the fairness of its competition, even as it draws to a close.
ChallengePost, which launched this summer, hopes its clearinghouse for running contests like the Netflix Prize, which led to a 10 percent improvement in the company’s movie recommendation service, will help more companies offer similar contests without having to build out an elaborate infrastructure.
The successes of the Netflix Prize and the X Prize before it aren’t hard to understand. Everyone wants the financial, social and professional rewards that come with winning such contests. But the successes also have much to do with a prize’s ability to pull in contestants who bring fresh perspectives to problems that have long stymied those familiar with them.
“Problem solving numbers go up dramatically when there is a diverse space of people [involved], which makes sense because most of these problems are solved by people outside of their field,” said ChallengePost founder Brandon Kessler.
Kessler is a longtime entrepreneur who helped the Dave Matthews Band break into the college market in ’94, then founded the web-friendly Messenger Records label from his dorm in ’96.
His new idea — to help companies offer cash prizes to improve their products in a centralized marketplace — came after he encountered a competition in early 2006 to put the Windows operating system on a Mac, just as he was looking for the best way to create an ideas exchange.
Colin Nederkoorn, a 24-year-old Texan, offered $100 for the solution. Nearly $14,000 in additional contributions flooded in via Paypal from individuals and corporations, each of whom got to put their name or logo on the contest’s website.
ChallengePost works pretty much the same way, except that individuals pledge money rather than paying upfront, and can launch a challenge without putting any money down. Corporations, on the other hand, must guarantee prize payment and pay ChallengePost to use its service, which appears to be the first public marketplace for individuals and companies to offer prizes for solutions. (A few others exist, such as Eli Lilly’s Innocentive, which Kessler told us is only open to approved scientific researchers, but which is open to everyone as a spokeswoman later clarified, and only requires a non-disclosure agreement for certain contests).
Today’s technology makes it easier than ever to administer these contests, but the central idea behind them is centuries-old.
“Napoleon released a challenge for a butter substitute, and that’s how margarine was invented,” said Kessler. “Another challenge to improve food on long voyages [resulted in] the vacuum, by sucking the air out of a wine bottle… And now, with the internet, obviously, there are a lot more companies putting out problems they have to the public… I said, ‘we need a marketplace for this.'”
ChallengePost, launched in early July, currently lists 37 challenges with thousands of dollars at stake so far, and new contests added every week. The site recently submitted a proposal for a New York City contract seeking apps that let citizens crunch publicly available data from the census, crime rates, traffic stats and so on.
For instance, Mozilla, the non-profit behind the popular Firefox browser, launching the Mozilla Design Challenge on Tuesday. The challenge? Finding the best way to present Firefox bookmarks, history, tabs, and stored credentials on a single web page as “intuitive and useful visual representations,” so that users can have a unified Firefox experience across multiple devices.
“As much as we love Firefox and want to see it everywhere, we also recognize there may be valid everyday scenarios where that isn’t practical — airport kiosks, libraries, parts of Redmond, Washington etc.,” reads Mozilla’s description. “That doesn’t mean you, as a Firefox user, should suffer.” Mozilla isn’t offering a cash prize for this contest, but the winner will work with the organization to implement their idea and will get public credit for solving the problem.
And later this week, the “real-time search” engine Collecta.com plans to launch a contest on ChallengePost involving its API.
Money is the main motivating factor for some contests — especially those that can only be solved by highly-experienced entrants like the software engineers who entered the Netflix Prize contest, because they tend to be pretty busy.
But the almighty dollar is not the only force at work here, according to Kessler. “Solvers are motivated not just by money, but by status and recognition, the competitive spirit, intellectual stimulation, altruism, and all these other things. A lot of them are academics — clearly, they’re not in it for the money,” he explained.
Fairness will always be an issue with these sorts of contest, whether money is at stake or not. The Netflix Prize is no exception; a member of one of the finalist teams contacted Wired.com with accusations that Netflix’s methodology for choosing a winner is unfair (we’re looking into it). ChallengePost, by helping a wide variety of companies run these contests, has the chance to develop a set of best practices to help companies structure their rules in such a way that minimizes those situations.
Kessler is not only the head of ChallengePost, but he could soon become a client as well. The company is considering a monthly contest to improve the way it runs contests.