Prize Insurance Puts A Price On Conventional Wisdom
from the what-a-deal dept
Since the first X-Prize competition, we've seen more and more interest in this model as a way to spur innovation. However, there are still a lot of questions about the competition model, in terms of efficacy and utility for private industry. While businesses are interested in the concept, the exact model remains unclear. Economist Alex Tarbarrok relates an interesting point about how the X-Prize was funded. Apparently, the group behind it didn't actually raise the prize money, but rather it bought an insurance contract that would pay off in the event that someone actually won. And who wrote the insurance contract? None other than the established experts in the field: Boeing and McDonnell-Douglas. It just so happened that these companies thought the prospect of a successful launch was basically nil, so they gave the organization a very generous price on this insurance contract. The fact that the prize was ultimately claimed is a good indication that even the established leaders in a field don't always have the best grasp of what advances are just around the corner. It also suggests a possible business model, whereby middlemen attempt to arbitrage the disparity between what the establishment deems possible and what individual inventors think they can accomplish.Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
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The list of mediocre inventions
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re: dorpus
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Re: The list of mediocre inventions
Mike, I can understand your reluctance to censor comments but how about implementing a comments section similar to that use on slashdot where we can mod comments up/down or even choose not to see comments from certain user?
You can make this an optional service so casual surfers can still post comments without signing up but for us regular readers, it would be a very helpful service.
Thanks!
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Dorpus
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It is the underdog, little man that generates
Big Corporation/Companies are not built for innovation, they are built to take advantage of new ideas/new technologies/new patents. It is extremely difficult to get truly new and revolutionary ideas to fruition in a corporate structure. New is unsafe and unsafe is not good for business.
Look at the greatest inventions/ideas/technologies of mankind and you will find a single person behind them.
Galileo, Newton, Einstein, Bell, Gutenberg, Ford, Edison all are recognized simply by their last names and their accomplishments.
Imagine Einstein trying to develop Theory of Relativity with a corporate sponsor, timelines and oversight committees.
Ford and Edison built corporation on the ideas and inventions they created, not vice-versa.
Yes, today many new ideas/inventions are coming out of corporations but that is because we are entering a new age:
People will align themselves with corporations not countries. But that is a topic for another day.
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Re: It is the underdog, little man that generates
Ultimately everything is done by individuals but corporations have provided the environment for many extremely important inventions, some of which could never have come from a garage inventor: a practical light bulb; the alternating current electric engine; the transistor and the integrated circuit were all products of industrial research, only the alternating current electric engine could conceivably have been invented by a lone individual working in his garage.
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Re: Re: The list of mediocre inventions
No Thanks!
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Re: Re: The list of mediocre inventions
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Gambling
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re: Gambling
Considering it was BOEING who was financing this, I assume they did a LOT of research on their own end. It was probably cheaper for them to finance this for a million then spend a hundred times that in R&D, design, implementation...etc...
P.S. I concur with the comment rating if nothing else, dorpus is commonly an off-topic troll and it's QUITE annoying!
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Social Policy Bonds
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Dorpus
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Re: Re: The list of mediocre inventions
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Re: re: dorpus
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Re: Re: It is the underdog, little man that genera
Nuclear power, Space Exploration, Transportation, Structural Engineering (to name a few) are all to expensive or too large a scope to be managed by one.
And so true, it ultimately boils down to 1 individual with a good idea to start the up-hill battle.
But where all of your examples listed, a major corporation took an existing budding "new" idea and turned it into a real business, a real "practical light bulb".
Even the transistor and integrated circuit were based on theories set forth by lone individuals. Again, corporate sponsorship allowed the Bell Labs folks the time and resources to put to practical use the theories.
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Who would decide on what need's inventing
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"the little man with the very big invention"
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