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September 19, 2006
From Lindbergh to X
(Cross-Posted from HedgeStop.com)
In the last post, we looked at open source innovation efforts that companies are using to advance themselves: Offering money to people who can innovate to solve YOUR problem. Today, we’re going to look at how people are supporting innovation to advance mankind: Offering money to people who can innovate to solve EVERYONES problem.
In 1919, a gentleman named Raymond Orteig offered a prize of $25,000 to the first person who could fly an airplane non-stop between New York and Paris. Sounds easy, right? Today, we just hop on Expedia, book a ticket, and cross the pond in about seven hours. But early in the 20th century, it wasn’t that easy. The Wright Brothers had left the earth 16 years earlier, but flight had been limited to short flights, and certainly not across the Atlantic or Pacific oceans.
Orteig thought it was time for that to change.
You know how this ends: In 1927, eight years after Orteig offered his reward, Charles Lindbergh climbed into the cockpit of the Spirit of St. Lewis and flew solo for 30 hours. But he wasn’t the first to try—Hubert Julian, Rene Fonck, Charles Nungesser, Francois Coli and others tried and failed. Nine teams in total spent around $400,000 to try and win a prize that was 1/16th of that amount. Hardly cost effective.
But Lindbergh succeeded. He promptly became a national hero. Air flight took off. The value of aviation companies skyrocketed. And on 16 June 1927, Lindbergh collected the $25,000 prize personally from Orteig:
Seventy years later, in May 1996, Peter Diamandis created the X PRIZE for the first group that could launch a ship into space (62+ miles up), and then repeat it within two weeks. The prize eventually grew to $10 million. Just like with Orteig, it took eight years before someone claimed it. But, in October 2004, Mojave Aerospace Ventures flew SpaceShipOne for the second time in two weeks, winning the award.
The comparisons to the Orteig Prize don’t end there. The cost to build and fly SpaceShipOne? Estimated at about $30 million, three times larger than the prize. Again, hardly cost effective. But like the Spirit of St. Louis, SpaceShipOne might be standing at the doorstep of a new industry. Richard Branson and Virgin Galactic will be offering space flights based off of the SpaceShipOne model as early as 2008.
A closing thought: Lindbergh crossed the Atlantic Ocean in 1927. That year, applications for pilots licenses in the US increased 300%. The number of licensed aircrafts in the US increased 400%. And airline passengers went from 5,782 in 1926 to 173,405 in 1929.
When we look back on SpaceShipOne in two decades, what numbers will we be quoting? Will we be amazed that “back in 2006,” getting into orbit wasn’t as easy and common an occurrence as crossing the Atlantic is today?
I think we will.
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