The Power of a Prize (Part 2)

Home , Amir Ansari, Anousheh Ansari, Peter Diamandis, SpaceShipOne

21 Nov 11 The Power of a Prize (Part 2)

Category: Business

by Loretta Hall

In part 1 the power of the Orteig Prize inspired Charles Lindberg to attempt the unthinkable Atlantic crossing.

The X Prize Inspired by Orteig, who had motivated Lindbergh, Peter Diamandis decided in 1996 to create a similar prize to stimulate innovation in spaceflight. Frustrated by a quarter of a century of stagnation of the United States’ manned space program, Diamandis decided to put human space travel into the hands of entrepreneurs. He believed a clearly defined incentive prize would make the competition viable, the award’s prestige would entice financial sponsors for entrants, and success would create a demand for commercial and recreational flights. To win the prize, a privately funded team would have to build a spacecraft capable of carrying a pilot and two passengers to an altitude of 100 kilometers (62 miles), land safely, and repeat the flight within two weeks.

Ten million dollars seemed an appropriate value to attract serious competitors. Diamandis decided to start with a placeholder name, the X Prize, until he found a financial sponsor. But the name, representing both eXperimental designs and the Roman numeral for the ten million-dollar prize, stuck. Eventually, Anousheh and Amir Ansari generously supplemented other contributions enough for Diamandis to buy a “hole in one” insurance policy for the full prize amount. The policy was in effect until the end of 2004.

Burt Rutan Burt Rutan’s creativity as an aircraft designer is legendary. Among his creations are the first two airplanes to fly nonstop and nonrefueled around the world—one carrying two pilots, and one with a single pilot. With his history of using innovative materials in his revolutionary designs, it is not surprising that he began to think of designing a vehicle capable of suborbital spaceflight. In fact, he began sketching out these ideas in 1994. When Diamandis announced the X Prize in 1996, Rutan was the first competitor to sign up. “I have never been, myself, as creative as I have eyeballing this goddamn prize,” Rutan said in his speech at the prize kickoff banquet. “I want to win this thing!”

Diamandis believed that one of the advantages of a dramatic prize was that it helped competitors attract financial sponsors in the same way that automobile racers do. That is exactly what happened in Rutan’s case, as billionaire Paul Allen provided some $25 million for the design and construction of their entry. With two flights of SpaceShipOne in late September and early October 2004, only two months before the Ansari X Prize deadline, Rutan’s team won the competition. Not only did Paul Allen get almost half of his investment back, but Rutan landed a $120 million contract from entrepreneur Richard Branson to build a fleet of the next-generation version of the spacecraft for commercial suborbital flights by Virgin Galactic.

The success of the Ansari X Prize competition stimulated industry innovation by the twenty-six teams from seven countries who vied for the prize. It also generated public excitement for the future of human spaceflight. New prize programs funded publicly (such as NASA’s Centennial Challenges) and privately (such as Google’s Lunar X Prize) are helping keep that momentum going.

Loretta Hall, a Space Ambassador for the National Space Society, is the author of Out of this World: New Mexico’s Contributions to Space Travel and the website NMSpaceHistory.com.

Photo Above: SpaceShipOne victory.jpg: X Prize sponsor Anousheh Ansari, Peter Diamandis, Paul Allen, Burt Rutan, pilot Brian Binnie, and Richard Branson celebrate in front of SpaceShipOne after its second qualifying flight for winning the X Prize. Courtesy of the X Prize Foundation.