A while back I did some research on prize economics, and in general there is a 100x advantage to using a prize economic model on BIG PROBLEMS.

Right now the auto industry is facing a crisis because cars are expensive to manufacture, there are delays in manufacture and credit approval, and gas really put the pinch on us this summer.

My recommendation is that the car manufactures put out MASSIVE prizes for improvements that we value as a country. Heck we could even vote for what we as a country want to give prizes away for.

One example might be a prize of $1 billion dollars to the 1st car company that can travel cross country in 40 hours on 40 gallons of gas. The prize money would be dolled out over time, and at each stage require the car company to pass certain mile stones.

When Netflix started the Netflix prize they were unsure of who would participate, the goal was to get 10% better recommendations than Netflix did in house and the prize was 1 million dollars or 8 full time software engineers for 1 year. The result is that there are thousands of people competing for the prize and glory of wining. WIthin the 1st month they were 5.5% better than Netflix, but today people are only 8.8% better than Netflix's algorithm 3 years ago. With thousands of people working on it across the globe, we have all learned a few interesting things.

Darpa did the same for self driving robotic cars. They put up $1 million in the 1st year and had about 20 teams compete each spending about $100k-$1.5 million to win, no one one, but in the second year, Darpa vowed to add $1 million to the prize each year until someone won. In year two 12 companies completed the course and 1 group from Stanford took home the prize and a government contract. When the head of Darpa was questioned, he thought it was a bargain, because a government contract would have cost over $200 million dollars to accomplish the same thing.

Today we are faced with big problems that need to be solved in the auto industry.

Accident and death rates are so high, that for people in their 20's and 30's car accidents put people at the greatest change for injury.

US cars have low MPG ratings when the technology exists to have cars in the 50+ MPG range and getting to 100+ MPG should be viable in 1 or two years.

We have other industries that could use a boost from prizes, like health care with cancer, aids, heart disease, and diabetes.

These problems are so big that capitol markets have had problems solving them because engineering teams need to 1st think about budgets and business models before they think about solutions. Prize economics makes it noble and profitable to give the technology away to win the prize.

Instead of giving away charity, lets inspire people with a prize worth awarding, and lets get a gift worth sharing.

Justin

please pass this on.