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A True Story of Invention, Automotive Daring and the Race to Revive America

Jason Fagone

Charles Lindbergh, first man to solo across Atlantic, wasn't just in it for the glory. He was chasing the Orteig Prize of $25,000 for first man to fly non-stop NY to Paris.

Just about impossible to start a new car company in US. The last man who tried was John DeLorean, who ran out of money and turned to drug smuggling to raise cash. Tesla is trying to make electric vehicles, and is backed by deep pocketed investors, but is making high-priced specials for the rich. The most viable path for inventors is to patent technology and then license it.

Bell Telephone Labs - by 1940 employed 5000 scientists and engineers. In 1941 they moved to new labs in New Jersey, designed to force people to collaborate across disciplines. Hallways so long that the end disappeared into the vanishing point.

(Scientific American)

Just over three years ago, engineer and entrepreneur Peter Diamandis took the winners of his Progressive Auto XPRIZE competition on a victory lap through New York City. There was cause for celebration—three teams had each met the competition’s main criteria of building an automobile capable of traveling at least 100 miles per gallon (or the electric equivalent, measured as MPGe).

The biggest winner, however, was the XPRIZE itself. Following up on its triumphant 2004 Ansari XPRIZE for spacecraft development, the nonprofit XPRIZE Foundation had once again laid out a bold challenge and successfully stimulated remarkable results. XPRIZE has four new competitions underway covering ocean science, medical technology and lunar exploration, with several more in the works.

With government funding for science and technology hard to come by, and large corporations increasingly risk-averse, such competitions are a growing source of inspiration to entrepreneurs worldwide. XPRIZE plans to award its biggest prize yet—up to $40 million—by the end of 2015 to a private company that can land safely on the surface of the moon, travel 500 meters above, below or on the lunar surface, and send back two “mooncasts” to Earth. The organization also expects to have three separate ocean-related competitions in play by 2020, in addition to the newly launched $2-million Wendy Schmidt Ocean Health XPRIZE to develop sensors for studying ocean acidification by May 2015.

The foundation is considering dozens of new ideas for future competitions—including one to develop a new method of wireless power transmission and another to explore possibilities for orbital space debris removal. Scientific American spoke with Jason Fagone, a journalist specializing in technology, about what makes the XPRIZE tick and why these competitions have been so successful at sparking innovation. Fagone, author of the recently released book Ingenious: A True Story of Invention, Automotive Daring and the Race to Revive America, about the 2010 Progressive Auto XPRIZE, discusses how these competitions level the playing field for inventors and motivate the development of new ideas—ideas that might otherwise have died quietly in, say, a barn somewhere in Illinois.

[An edited transcript of the interview follows.]

How did you first become interested in the XPRIZE competitions?

I’m not really a car guy. When I first heard about the Progressive Auto XPRIZE, I was driving a 2002 Honda Accord with about 120,000 miles on it. I get my oil changed at the dealer, you know? But the idea of the contest captivated me anyway. It just seemed so bold and necessary. The cars of the 21st century can’t be like the cars of the 20th century, or else the planet is screwed. But the big auto companies are still stuck in this hyperconservative mind-set. I wondered if little guys could do it—these garage hackers and entrepreneurs who had signed up for the XPRIZE. I wanted to see if they could make the superefficient cars that Detroit had never made and get people excited about them.

I work in Philadelphia, so the first team I met was a team of students and teachers building hybrid cars at a public high school in a poor part of Philadelphia. And I went from there.

How did the West Philly Hybrid X Team (EVX Team) find out about the XPRIZE competition? I think they saw the announcement online, like most of the teams did. [XPRIZE chairman and CEO] Peter Diamandis was everywhere in the media in early 2007, getting the word out, putting out a call to inventors of all types, and making it clear that you didn’t have to be rich or famous or well credentialed to enter. All you needed was a worthy idea.

How does cost play into this?

In the beginning most of the teams don’t realize this will become as all-consuming as it does. They don’t predict that they’ll end up risking their whole financial lives. So they set a budget and then end up blowing it. They find the money somewhere, whether it’s their savings, through investors or some other way.

How effective are these competitions at catalyzing the development of new technologies? It depends on how well the competition is designed. The question has to be framed in the right way, the targets calibrated just right. The foundation has been trying to bring some science to the art. Is the target both achievable and audacious? Is it easily measurable? Are the logistics manageable? When it works, there’s nothing like it—you get this incredible return on investment. I think the number for the original Orteig Prize of 1919 - the one that Charles Lindbergh won in 1927 by flying from New York to Paris - was that Orteig spent $25,000 to get other people to spend $400,000 trying to win it.

In the case of the auto prize, the hope was that a big auto company would swoop in and buy up some of this technology, but no one did. There was no equivalent of Richard Branson, who bought the space plane that won the original XPRIZE back in 2004 and built a company around it, Virgin Galactic. The big auto companies don’t think they need the sorts of radical innovations that the XPRIZE cars represent.

Given the amount of money it costs to enter and compete in these competitions, is the prize money enough incentive?

I think it’s really less about the money than it seems. Most people who entered the Auto XPRIZE lost money. A lot of it. One of the teams I write about, Illuminati Motor Works, was building an electric car from scratch in an Illinois barn. And this guy and his wife spent about $125,000 on the car in a couple of years. The guy’s entire salary went into this car—so the money is just the spark. The fuel really comes from people’s desires and dreams. The prize has this funny way of convincing people that it’s their one big chance to make a difference, to leave a mark on the world.

How important is crowdfunding to XPRIZE competitors?

Maybe crowdfunding is a factor in current XPRIZEs, but when I was reporting the Auto XPRIZE, Kickstarter wasn’t a big deal yet. Most of the teams that did well had either venture capital behind them or individual investors or they were pumping their own savings and salaries into the cars.

Why did you choose to profile four teams for your book?

Two reasons: First, I wanted to write about a number of different approaches to radical efficiency—including hybrids, electric cars and very light cars powered by internal combustion engines. Second, I wasn’t sure who was going to win, so I had to hedge my bets.

The West Philly Hybrid X Team had won fuel efficiency competitions before, so I figured they’d do well. I picked a team called Edison2, in Lynchburg, Va., because I met its leader, a fiery German named Oliver Kuttner, and he just seemed so passionate about his particular approach—he was going to win the contest by making superlight cars that ran on small, heavily modified motorcycle engines. I picked Aptera Motors, a California start-up, because they had venture capital funding. And the fourth team I picked because I thought they had a cool story—Illuminati Motor Works, the people building an electric car in Illinois. I ended up getting lucky, because all four teams lasted well into the competition.

How would an entry by a large car company—GM, Ford, Chrysler or someone else—have impacted the Progressive Auto XPRIZE?

The XPRIZE Foundation actually courted the big automakers. They wanted a GM or a Ford or a Honda to be a part of the contest, because they thought that the presence of a big automaker would lend it legitimacy and prestige. But the automakers didn’t see how the prize could help them. If they lost to a bunch of ragtag hackers and inventors, it would look bad. But even if they won, they’d face pressure to produce the winning car, and they may not want to produce it if they didn’t think there was a market. I mean, even now, the automakers are making electric cars that they have no intention of selling widely; they’re just “compliance cars” to meet regulations in the state of California.

So, because the big automakers ignored the XPRIZE, the car magazines mostly ignored it, too. I think the participation of GM, say, would have brought a lot more attention to what ended up being a kind of undercovered event.

The Edison2, Li-ion Motors and X-Tracer teams ended up winning the Automotive XPRIZE. What happens to their technology as well as the technology from the other teams now?

[Illuminati’s] Kevin Smith will build you a version of his XPRIZE car for $250,000. So if you’ve got that kind of money, you can drive one. As for Oliver Kuttner, he’s still developing and refining the Very Light Car, hoping to partner with a bigger company to produce it. During the prize the car got 102.5 MPGe using an internal combustion engine, which is impressive. But after the prize was over, Oliver and his team made an electric version that got 245 MPGe on EPA [Environmental Protection Agency] tests, which I think is amazing. It’s a better car now than it was in the XPRIZE.

It takes years to develop a new car platform. It’s a difficult and arduous thing—and remember, these teams don’t have anywhere near the money that the big automakers do. So the success or failure of the prize depends on how you define it. If you define it as creating a mass-produced vehicle within three or four years, well, no, it hasn’t done that. But the XPRIZE did succeed in unleashing tremendous creative energies. The prize inspired people to dream and create, and the accomplishments were important and real.

Why is it important that government agencies remain involved in these competitions but do not participate directly?

Government support of the auto prize was crucial at a couple of stages—the DoE [Department of Energy] kicked in a few million in stimulus and other funds, and that money went a long way. [The DoE money went toward, among other things, vehicle safety inspections, fuel economy and emissions testing, and outreach programs to educate the public about the importance of energy-efficient vehicle designs.] I’d actually argue that the XPRIZE was one of the [federal stimulus package’s] key successes—a very small investment produced a lot of ingenious solutions. But anything more than that would have distorted the point of the thing, which was to look for ideas in unexpected places. The XPRIZE was really about this older ideal of invention. Mark Twain once said, “We are called the nation of inventors, and we are,” and Walt Whitman wrote poetry about engineers and mechanics. What excited these guys about invention was the democracy of it. The XPRIZE competitors weren’t some elite group of scientists, and they accomplished amazing things. It’s possible. So what else is possible?

What new XPRIZE competitions would you like to see?

Maybe something in materials science. There’s a crazy amount of interesting stuff happening in materials science. Carbon nanotubes, graphene, new weird polymers. That would be pretty great—the Unbreakable XPRIZE.

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