When former professional basketball player Ashley Day entered the scrap metal business around 2000, the industry hadn’t change much over the decades.
Not willing to settle into the status quo, he started a company out his garage that integrates new robotic technology to improve the recycling process. He’s used his technologies to clean up the Pacific Garbage Patch, a huge area of the western Pacific Ocean littered with plastic and other human waste. He’s also developed a new technique of cleaning surface litter, while simultaneously reaching trash up to eight feet below the surface.
"I developed a passion for finding a way to deal with this mess. How do you go about approaching such a large area, and what new technology can you use?” said Day.
When the Wendy Schmidt Oil Spill Cleanup X CHALLENGE was announced in October 2010, Day decided his trash-collecting technology could easily be adapted to cleaning up oil. Once he’d run a few tests, he decided to enter. The contest, which sought out oil spill cleanup technology with the fastest oil recovery rate, offered a top prize of $1 million.
Day pulled together a team of eight scrap metal industry veterans under the name Vor-Tek Recovery Solutions and spent much of the past year building prototypes of what they call the EEL, or Emergency Extraction Line, which is essentially a series of linked oil-collecting pods designed to collect surface and subsurface oil after a spill.
When Day met the other finalists at the International Oil Spill Conference in Portland, Ore., on May 23, he quickly realized he was up against extremely-experienced (not to mentioned well-funded) teams. “[The oil industry] is an old-boy’s network, like scrap metal was,” Day said. Still, he likes his team’s chances. “For a long time, I couldn’t get anyone to listen to a couple of young guys with an idea. But I’m used to breaking through barriers like that.”
That’s one fundamental difference between the Oil Spill Cleanup X CHALLENGE and other business-related competitions. Teams of budding entrepreneurs like Day are pitted against established players like Elastec, a 21-year-old Illinois-based oil field service company with 140 employees and 250,000- square feet of manufacturing space.
By the end of the summer, the best idea – not the best funded – will win. For entrepreneurs like Day, this contest, which is sponsored by the Los Angeles-based X PRIZE Foundation, can be an opportunity to make their ideas a reality. Even if a team doesn’t win, the potential funding opportunities and the press attention garnered from the event helps bring their innovation to the market.
The X PRIZE Foundation was founded by Harvard-trained MD and space travel enthusiast Peter Diamandis, and holds X PRIZE and X CHALLENGE contests that can last anywhere from one to five years or more. When he learned that Charles Lindbergh’s Trans-Atlantic flight was inspired by a competition with a $25,000 prize, Diamandis decided to apply that concept to his mission of opening the space frontier to humanity. The first X PRIZE was held in 1996 with a $10 million award and financial support from venture capitalists, Anousheh and Amir Ansari. In 2004, the foundation awarded $10 million to Scaled Composites for its craft SpaceShipOne.
Since its founding, the foundation has run four official X PRIZE contests, including ones sponsored by Google (NASDAQ:GOOG) to spur the creation of a ROBOT that could be sent to the moon, and one designed to quicken the pace of mapping the human genome.
The Oil Spill Cleanup X CHALLENGE is the second such CHALLENGE--note the different terminology--a distinction the foundation stresses. “A prize is more audacious,” said Michael Timmons, a spokesperson for the X PRIZE Foundation. “A challenge is just to encourage faster improvement – sort of a mini X PRIZE.”
The goal of participants in either contest is to commercialize new technologies. Often, even teams that don’t win still move their ideas forward after the contest has concluded. At the conclusion of the Ansari X PRIZE in late 2004, Sir Richard Branson, CEO of The Virgin Group, acquired the winning technology and has since launched Virgin Galactic, the first entrant to a commercial space travel industry.
Fostering an Environment of ‘Anything Goes’
With brilliant people competing under tight time constraints, new ideas flourish. “The X PRIZE is like no holds barred wrestling – there are a handful of rules – and other than that, we just go at it,” said David Brown, the former mayor of Charlottesville, Va., and the communications director for Edison2, the winner of the mainstream category Progressive Insurance Automotive X PRIZE and $5 million in 2009. That contest challenged teams to design and build a car that could travel at 100 miles per gallon. “That’s a great environment. The fewer rules there are, the more you’re fostering innovation,” Brown added.
Some teams come to the contest with fully-baked ideas, while others come with a great concept and take it a few steps forward during the contests. For most, however, the publicity they get can be more important than the money, since serious contenders often spend prodigious amounts just to complete the project. “For us the attractiveness is to be a top competitor in our industry,” said Donald Wilson, the CEO of Elastec American Marine. “The million dollars certainly makes it worth our while. But we’re attracted by the opportunity much more than the money,” he added.
Maintaining the secrecy around certain technology is crucial for competitors in the Oil Spill Cleanup X CHALLENGE. “There’s a lot of competition in this industry and a lot of companies that are quick to copy instead of innovating,” said Elastec’s Wilson. For his company, who already counts contest co-sponsor Shell Oil as a customer, winning the contest means potentially growing that account. Losing the contest could mean losing Shell as a customer.
Not all of these contests maintain such an aura of heated competition as the Oil Spill Cleanup X CHALLENGE. During the Progressive Insurance Automotive X PRIZE, competitors shared tools and other critical components, enabling teams to continue in the contest that would otherwise have been eliminated, said Julie Zona, director of team development relations for the contest.
Even though each contest has a title sponsor, entrepreneurs maintain exclusive rights to their ideas and intellectual property. Oliver Kuttner, the leader of the Edison2 team that won the Progressive contest, said he isn’t concerned about maintaining the secrecy of his team’s work, though there is some intellectual property (including several pending patents) involved.
Still, what kind of entrepreneur would compete in increasingly competitive pool with the possibility of reaping no financial reward at the end? “The ideal person is someone who can take people who are very good at what they do, who may not be used to being told what to do. Even more than that, all of us really care about the project and believe in it, and we really respect each other,” said Kuttner, whose team continues to grow with the goal of commercializing its low-weight, high-efficiency car.
The competitions are open to anyone with a viable technology idea, although there are abundant guidelines to avoid any conflicts of interest and a $3,500 entry fee.
Entering an X PRIZE and winning is a lot like starting any business, said Kuttner. Leadership, tolerance for risk, and the willingness to pick oneself up after a miscue are critical attributes for any entrepreneur, but they’re mission-critical if you hope to win an X PRIZE.
“No one sees the times you don’t make it, but only the time you succeed,” said Vor-Tek’s Day. For him, the Ansari X PRIZE was an inspiration that really hit home. His father was a pilot, and Day grew up learning about, and being inspired by, the innovators responsible for SpaceShipOne. “I would love to be that inspiring to someone. Now I feel like we’ve got the opportunity to do something like that and inspire people to keep pushing,” said Day. For him, and the other entrepreneurs who enter, the big-money contest serves both as a motivator, and as a reward in itself.