This guide, by Nesta Challenges, shows you how challenge prizes work and how we can support you to get your prize off the ground.
Challenge prizes offer a reward to whoever can first or most effectively solve a problem. They are a tried and tested method of attracting new innovators to change the status quo. At the same time, they also challenge incumbents to redirect their efforts or think about a problem in a new way. This leads to breakthrough solutions, creation of new cohorts of innovators, and can result in systemic change.
For innovators, the value of a challenge prize is much more than the winner’s award. Participants that reach the finalist stage or go on to win often attract new investors and supporters, buoyed by the publicity and credibility of the challenge. The prize amounts are often modest by comparison.
When used to tackle the right kinds of problems, challenge prizes can act as a catalyst for change. In recent years, they have been responsible for advancing medical diagnostics, electric flight and driverless cars, cleaning up oil spills, improving access to banking, and developing alternatives to the wheelchair.
The prize can also raise much-needed attention. The Longitude Prize has raised public awareness of antibiotic misuse and the Open Up Challenge increased the public’s understanding of the solutions enabled by open data.
Challenge prizes work best when they are carefully constructed to attract and motivate the right talent to address a problem. Designing a successful prize involves balancing a goal that is challenging enough with incentives and support that motivate teams to ensure the best ideas grow, evolve and make it to the end. Get these things right and challenge prizes solve both important problems as well as transform, or create entirely new, markets.
This guide has been developed to help you think about whether and how to develop a prize. We hope that it will help you ask the critical questions required to maximise the value of your challenge prize and incentivise the right innovators to participate.
Nesta Challenges exists to design and run challenge prizes that help solve pressing problems that lack solutions. We shine a spotlight where it matters and incentivise people to solve these issues. We are independent supporters of change to help communities thrive and inspire the best-placed, most diverse groups of people around the world to take action. We support the boldest and bravest ideas to become real, and seed long-term change to advance society and build a better future for everyone. We are part of Nesta.