Wired Science

The fact that lots of other organizations, NASA and DARPA just to name two, are adopting the competition model, is a real victory for our guest today. Peter Diamandis trained as a medical doctor but now he has his hands in a bunch of space related businesses and he founded the X-Prize Foundation. He’s here to talk with Adam Rogers.

Adam Rogers: Peter Diamandis, thanks for coming in, I appreciate it.

Peter Diamandis: My pleasure.

Adam: So, where did the interest in space come from?

Peter: Ever since I was 9 years old, I wanted to be an astronaut and I figured NASA would be the way to go do it. And then somewhere along the lines, I decided that it probably wasn’t the best way. And I wanted to do it privately.

Adam: What, what made you think joining up with the program wasn’t the way to get to space?

Peter: Well, I figured the odds. Okay, your chances are 1 in a 1,000 of becoming an astronaut and then…

Adam: Just when you apply or if you send in, hi can I sign up?

Peter: When they do an astronaut call and they do that every number of years, they’ll select a class of 10 or 20, there’s only been under 500 astronauts ever that have flown into space. It’s the most exclusive plan, you know club on this planet and then, half of the astronaut corps in the US have never flown. And they call them penguins, cause they’ve wings but they don’t fly. And I said, there’s got to be a better way to do this. And then, plus the idea of having to go work for the government and being told what to do, what you can’t say, it’s pretty that’s not for me. 

And so I said, what can we do to try and create a commercial space program. One that’s sort of married to the tourism industry and the entertainment industry and allows me to go and others to go, when I want to, just like, you know if you’re a scuba diver, you don’t have to go join the Navy. You can put on your scuba gear and go and explore.

Adam: Well yeah, but let me flip that around. The answer is that going to space is really hard fundamentally, that’s the answer.

Peter: It is hard. It is hard today. It’s getting easier but just like anything we start in the beginning is hard. Your building computers was something the government only did in the 40’s and 50’s and now you know, you get them free in your cereal box. 

Adam: It would be cool, actually.

Peter:  I think it will happen. But, we are getting to the point that it will be cheaper and cheaper, if you do the energy calculations of what it cost you and me to actually go into space you can do the calculations of how much potential energy and kinetic energy. And if you were to buy that energy off the electric grid, do you know how much it would cost you? A hundred bucks so today, on the space shuttle, 6 people go up, it costs 600 million, it’s 100 million dollars a person to go into space. That’s what it costs NASA.

Adam: They’re paying for more than kinetic energy to be fair, right?

Peter: They are. NASA is an amazing organization, doing a lot of great things but it’s not their mission to make it cheaper...

Adam:  Okay.

Peter:  …or to make it possible for the public. They’re about exploring. The job of getting the public into space is commercial industry and that’s what, you know commercial industry does 2 things. It makes it cheaper. It makes it better and that’s what capitalism is about. So, I’ve been trying to engage that capitalistic engine outside of the industrial-military complex, to get me into space and my friends and others who want to go.

Adam:  Are you signed up to go? On any of the commercial providers?

Peter:  I haven’t. I haven’t signed up to go. I’ve been invited to go, I want to go of my own accord. You know, one of the very first companies I created, as you know was something called Zero Gravity Corporation.

Adam:  Sure.

Peter:  And Byron Lichtenberg who had flown 2 shuttle missions. He was a good friend, he was sort of like an older brother to me and I watched him go through all the process of training for years and years. We said, you know if you can’t go and fly on a shuttle, the next best thing was something called parabolic flight, weightless flight. NASA had a Zero G airplane, get in it and you fly this parabolic arc and you’re weightless.

Adam:  This is the KC135?

Peter:  KC, yes.

Adam:  Weightless at the top, right? It flies off and then…

Peter:  Exactly. And now they use a DC9. Apollo13 was filmed on that airplane.

Adam:  Right.

Peter:  And so in ’93, we said let’s do this commercially. We’ll offer the public the chance to go and fly. It took us only 11 years to get approval from the FAA to do it. You know stubbornness is the key ingredient to opening up space.

Adam:  Well, it’s not the top of the arc that’s the problem it’s the bottom of the arc. It’s going to make sure you can…

Peter:  So now, what we do is we operate, we’ll be flying 3,000 people this year out of Kennedy Space Center. We have partners in Space Florida down there and now also Las Vegas out of McCarren, so no, for obvious reasons.

Adam: Yeah.

Peter: And you might have seen we flew Steven Hawking into Zero G, a few months back. You did see that.

Adam:  Yeah, incredible, talk about what some of the next X-Prizes are going to be. What else are you working on?

Peter:  Well, we’ve launched already the Archon X-Prize, which you know makes sequencing 100 human genomes in 10 days.

Adam:  Wow.

Peter:  We’re launching the Automotive X-Prize, a new generation of cars that exceed 100 miles per gallon equivalent, are affordable, look great, low carbon emissions. Working on a cancer X-Prize, we’re working on an X-Prize education in global entrepreneurship, really wherever there’s a grand challenge, we want to create an X-Prize that motivates brilliant radical thinkers to go and solve it.

Adam:  Once you kind of laid out the broad fields that you want to get into, how do you choose an objective for the Prize? How do you pick exactly what to get people to try for?

Peter: Well, it turns out our Board of Trustees, and we have something called the Vision Circle, which are folks who are our biggest benefactors. They contribute 2.5 million dollars. Larry Page was the first and they work with us when we say where should we be focusing our energy on? What Prize areas and together with staff and our Board and the Vision Circles, we sort of said, this is an area we want to go and create a Prize, re-write the rules, go out and find the corporate sponsor or the philanthropist and then launch it in a really big way.

Adam: But are you trying to find kind of a game changing question in that field?

Peter:  It’s got to be something where it’s stuck. The industry is stuck. It’s not moving fast enough, there’s political forces or people who just don’t believe it can be done. And we try and set a set of rules that’s intersection of achievable and audacity.

Adam:  I’m interested in how the Prize model connects to that capitalist instinct that you were talking about and, and also fosters innovation, which I understand is the point, right?

Peter:  So, I read this book called The Spirit Of St. Louis. Lindberg as it turned out, crossed the Atlantic in 1927 to win a $25,000 prize and I had no idea.

Adam: Okay.

Peter: This Frenchman Raymond Orteig offers out this prize for New York to Paris and I’m making markings in the book and I’m reading and saying wow, nine different teams spent $400,000 to win this $25,000 prize, that’s incredible. That’s efficiency.

Adam: Figuring that they, because that return on investment is kind of non-existent, they weren’t in it for the money is the notion…

Peter:  They were in it. The prize galvanizes huge amount of global interest and Orteig who’s putting up the prize money, never paid any of the losers. He paid only the winner. And I said, what an incredibly efficient way to cause a breakthrough. And so, by the time I finished reading The Spirit Of St. Louis, this idea for an X-Prize, what was a $10 million cash prize for the first private team to fly 3 people up into space, come back down and within 2 weeks make the trip again, had come to my mind. It just took me forever to raise the money to get it out there.

Adam: Okay, that’s an interesting question, how do you, where does the money come from, how do you go get that money and more than that even? How do you structure a prize that somebody’s going to want to compete for or give the money to actually be the prize at the end?

Peter:  So, this idea of an incentive prize where you’re not paying for ideas, you’re not paying a prize, like the Nobel for something done 10, 30, 40 years ago. You’re saying, here’s a chunk of money. If you do this, I don’t care where you’re from, where you went to school, what you’ve done before, you pull this off and you win the cash.

Adam: You don’t even care how you do it.

Peter: No, as long as the objective is met,

Adam: Okay.

Peter:  So, if it’s, you know, curing cancer or building a private spaceship, the money goes to the winner and not anybody else, very efficient way. So what do we do at the X-Prize Foundation as we build these prizes, is really come up with a very clear set of rules. The rules have to be able to sustain maybe 8 years you know, you have to write rues now. We sign the contract with all the teams saying you do this you win. Accept a standard test of time, very objective, can be measurable. You know 3 people up to 100 kilometers twice…

Adam: So nobody can dispute.

Peter: Mm hmm.

Adam: Right.

Peter: And then when we set the rules. We then have to go and find the benefactor, either a corporation or wealthy individual or foundation and say, listen. Give us a promise of the money. You know the beautiful thing is, it is pay for success. In the future, my hope is that we’re going to revolutionize philanthropy. Instead of funding, you know, different research labs, which is a good thing to do as well but instead, put up a large prize. You know, I’d love there to be on around all the grand challenges that we as a society have and these large cash prizes for the breakthroughs that occur.

Adam: What’s the pitch to the potential funders of the prize when you go to them and say, we have a prize coming up for commercial space, right?

Peter:  So the value proposition is first of all, we’ll title it. We’ll give them the name.

Adam: You know like getting your name on a building or something.

Peter: Getting. It became the Ansari X-Prize for space flight when the Ansari Family you know, finally after 6 years of, I’ve worn a number of knee pads begging for money on that one. They said I believe in you Peter, I believe in this X-Prize contest. We’ll give you the cash to fund the prize and of course that happened in around 2001 and it was won just 3 years later, just in time. So, the value proposition is, we can name the prize. If you want a real breakthrough to occur, doing an X-Prize can cause that breakthrough. And typically, progress is very incremental to very slow steps. The experts in the field know exactly how it can’t happen. You know it’s like this negative attitude. You can’t do that. You can’t build a private spaceship for such a small amount of money but that’s where our prize elevates a problem and it says again, I don’t care where you come from. And it typically brings non-traditional players who, you know computing on silicon instead of a vacuum tube is a crazy idea. And in fact, the day before something is a breakthrough, it’s a crazy idea.

Adam: Right. Well, so but that makes it sound like and I know it’s the case that any of the prizes that you have worked on are open to anybody then. So, you can come from academia or industry or just be a backyard tinkerer but of course, you know with the Ansari X-Prize, you have Burt Rutan who’s one of the world’s greatest aerospace engineers, who was already kind of in the game, trying to come up with this. And you had somebody out there, who was already kind of primed to go after this.

Peter:  He was. But again, he was really an aviation guy. He had built wings for the Pegasus launch vehicle but he never built a private spaceship.

Adam: Sure

Peter: And a propulsion system. So, he really did come at it with a very different approach. And an approach that was thought to be, you know undoable at that price point by all the traditional players. But we also attracted 26 teams from 7 countries around the world, who were incredible groups. I mean a team in, out of the middle of no place in Romania, in Argentina, a number of teams out of Great Britain, out of Israel, out of Russia, Canada and these groups were trying. We had literally helicopters into space. We had rocket ships towing….

Adam:  What possibly could go wrong? 

Peter: No but actually, it’s a brilliant idea. Gary Hudson had put this concept forward. And we’d, towed behind an airplane, above an airplane, below and airplane, out of the water, liquids, hybrids, solid engines. It was a Darwinian experiment. You know a great experiment not paying a single dollar for any of the failures.

Adam: Right, now that’s efficiency. How does the, the idea of prizes as a way to foster innovation fit into the context of other funding of science and innovation, thinking you know, since World War II we got the kind of end of our Bush model of government’s accrue a lot of money through taxes and then they give a lot of money to big projects and small. Things like the National Science Foundational Fund and then there’s the idea that rich people who will at the tail end of their careers, start giving money that they made back, Carnegie or Bill Gates. Where do prizes fit into either of those structures?

Peter:  Great question. Typically, you have government grants or research grants. When you create a competition that’s got television and media, you allow for corporate sponsors now to come in and fund the scientists. You allow for wealthy philanthropists to come in and fund the scientists and typically, these incentive prizes get 10 to 40 times the amount of the prize money being spent to win the prize.

Adam: Last thing: Why is it called an X-Prize?

Peter: God Almighty. You know when I named it the X-Prize, initially, “X” was a variable to be replaced by the name of the person who gave me the money. It just took so darn long to raise the money you know, that the “X” stuck around.

Adam: So, now it’s just extreme.

Peter: Extreme and exceptional. Roman numeral “X” for $10 million. It worked really well.

Adam: Peter, thanks a lot, I appreciate it.

Peter:  My pleasure.

Adam: Thanks.