Image: Michael Prince / Corbis Outline X MAN Naveen Jain does not see philanthropy as any different from entrepreneurship

In the early 1900s, if you wanted to go anywhere reasonably far away, your choices were road, rail, or ship, and everything took days, weeks, even months. Aeroplanes were small, flew limited distances, and weren’t considered all that safe: You were considered brave and rather dashing if you flew a plane.



In 1919, a hotelier, Raymond Orteig, offered $25,000 (around 335,000 in today’s dollars) to the first aviator to fly non-stop from New York to Paris (or the other way around). There were no challengers in the five years it was on offer. When Orteig renewed it in 1924, there were a number of efforts to claim it. The man who eventually won it, Charles Lindberg, made his flight in 1927, flying solo (that wasn’t required by the prize, but he wanted to keep the weight down), with maps and charts, five sandwiches, drinking water and little else. He landed in Paris an instant hero, and ‘Lindberg mania’ took off: He had caught the world’s imagination, proving that this seemingly impossible thing could be done.



The Orteig prize, and many other similar prizes offered during those early years of flight, helped create today’s multi-billion dollar aviation industry.



The X Prize was inspired by and modelled after the Orteig prize. In 1996, it offered $10 million to the first non-government entity to build and launch a spacecraft capable of carrying three people to 100 kilometres above the earth’s surface, twice within two weeks. It was officially renamed the Ansari X Prize in 2004, after wealthy Iranian-American telecom entrepreneurs Anousheh Ansari and Amir Ansari made a multi-million dollar donation to the prize. (Anousheh Ansari, incidentally, was the first female ‘space tourist,’ paying $20 million for a 12-day round-trip to the International Space Station in 2006.) Twenty-six teams from seven countries competed for the prize, spending more than $100 million between them, the X Prize website says, and since it was won (in 2004, by SpaceShipOne, made by Scaled Composites. Backed by Microsoft co-founder and Rich-Lister Paul Allen) “there has been more than $1.5 billion dollars in public and private expenditure in support of the private spaceflight industry.”



Having proven the case for incentivised development, the X Prize has since expanded its scope. The foundation’s mission is to “bring about radical breakthroughs for the benefit of humanity.” By devising and managing a set of high-value (and high-profile) prizes, it aims to meet the ‘grand challenges’ that face our world. The foundation has many prizes in various stages of development, and among those already on offer are a $10 million genomics prize, a $2.5 million Nokia Sensing prize aimed at stimulating development of sensors that can be used in health care, and a $30 million prize from Google for the first privately funded team to send a robot to the moon.



And for the first time, there will soon be a country-specific prize, the X Prize India. (This isn’t the X Prize Foundation’s first foray into India though; in 2010, in partnership with the Government of India’s Ministry of New and Renewable Energy and the IIT-Delhi, it launched a global competition to develop and deploy clean and efficient cookstoves.)



Why India? Eileen Bartholomew, the Foundation’s VP of Prize Development, told Forbes India via email: “The nation has both substantial resources and grave problems within close proximity to each other. As such, India is an ideal locus for exploring problems of development. Further, given our strong relationships in the country with organisations including the Tata Group, IIT Delhi and Bombay, the Government of India and several local NGOs, it is a key place for X Prize, in particular, to establish future global operations. We are looking to establish X Prize India as our headquarters for that part of the world. Apart from India, it will become our centrepiece for Africa, China and the Middle East. The goal will be to design, open and launch prizes for the developing world.”



Naveen Jain (see box) and Ratan Tata are trustees of the X Prize foundation and co-chairmen of the X Prize India. They, with Jain’s brother, Atul Jain (CEO of TEOCO) and Paresh Ghelani (CEO of 2020llc until he sold it earlier this year) have put up $6 million to fund the prize (and are prepared, says Jain, to up the ante).



“The money is already in the bank,” Naveen Jain told Forbes India. He has personally donated $2 million to the X Prize Foundation. “Ratan Tata and I were co-chair of Education and Global development at the X Prize Foundation. It became obvious that many of the problems in this area are centred in the developing countries. I suggested that it will be difficult for us to sit in the US to identify the problems of the developing countries and we really need people in the region to help us identify the problem and help us solve the problems with their local ingenious ideas. That’s why we expect our first X Prize to be the incentive prize for the prize ideas. I invited Paresh and my brother to the Foundation to help us with the idea and both of them have been very generous financially and with their time and energy.”





Philanthropreneurship

(This story appears in the 07 December, 2012 issue of Forbes India. You can buy our tablet version from Magzter.com. To visit our Archives, click here.)

The exact role of the Tata Trusts is still being worked out, but a Tata spokesperson told Forbes India via email, “The Tata Trusts will support X Prize India in setting up of the proposed X Prize labs at IIT-Bombay, for research and development of low cost technologies in health and related areas. The support stems from the belief that the labs’ work will help improve quality of life.”They are currently searching for the right person to manage the prize in India. “We are interviewing candidates in the US who will essentially coordinate our efforts with the people in India,” Jain told us. “We have tremendous interest in the position because of our brand and successes we have had. We also have a great group of advisors who are helping us identify the right people in their network that may be suitable for the job.”Once that’s done, they will go into what Jain calls the ‘prize for a prize’ phase, where they will run a competition that will help them choose the most pressing problems that India needs to solve. This should take another six to nine months. This effort is planned to yield a list of 10 issues. They will then take this list to the government of India, and say, ‘Here’s what we have: Tell us which ones we can tackle where we won’t get in your way and you won’t get in ours.’ With that settled, they will have three issues on which to focus their attention. They will then spend three to six months working on the criteria for the prize—for a prize must have a measurable goal—before formally launching the three India X Prizes.Naveen Jain moved to the USA in 1983 where, among other things, he was a senior Microsoft executive before becoming a serial entrepreneur. Moon Express, of which he is co-founder and chairman, is in the running for the Google Lunar X Prize. Jain is a fervent evangelist for what he calls ‘philanthropreneurship’. Here, he explains what he means.I see philanthropy as no different than any other venture:No one in their sane mind will start a company that only has a market size of 100-500 people but many of us build schools or hospitals or other philanthropic infrastructure that only impacts 100-500 people. An entrepreneur enters the market when the market size is millions of people if not hundreds of millions. Why not think of the philanthropy the same way?You wouldn’t start a company if it couldn’t scale to millions of people but most philanthropists start with a great idea, test the solution in the local market and can’t scale even if the test is super-successful. Why bother testing a solution that won’t scale even if it succeeds? An entrepreneur builds technology that has potential to scale once the initial concept is proven successful.Philanthropists tend to build a team around friends, family or others who happen to be retired or with lots of free time. A great entrepreneur knows that success is directly related to the quality of their team. This is why they hire the best people to make the venture successful.Most start their philanthropy and expect to get it funded every year by donations which only keep going up as they become more and more successful. This is backwards to how entrepreneurs build successful ventures. No entrepreneur is going to get funding if they can’t show that there is a good path to making the venture self-sustainable in the future. They expect that after the initial investment their venture will become self-sustainable.