Nice to see more press on the Palo Alto Longevity Prize; the whole point of the exercise is to do what they are doing very loudly.

Establishing a research prize is a form of investment in progress only available in the philanthropic world. At the very high level it is easy to say that philanthropists pay people to work on specific tasks. This is simple enough for smaller amounts: transfer a few thousand dollars to a research group and you have bought a very small slice of the time and equipment needed to achieve any particular goal. When we start talking about much larger amounts of money, millions or tens of millions, then there are important secondary effects that occur when making such investments. In these amounts money has gravity, money makes people talk, and money changes behavior and expectations in a far larger demographic than just the recipients. This is well known, and thus investment activities, philanthropic and otherwise, become structured to best take advantage of this halo of effects. Most of the experience in doing this comes from the for-profit world: it doesn't take too long spent following the venture capital industry to see that investment is a lot more complicated than choosing a target and writing a check, and this is exactly because there are many secondary effects of a large investment that can be structured and harvested if investors go about it in the right way.

I theorize that the reason why research prizes remain comparatively rare is that firstly they are an investment strategy restricted to philanthropy, and thus people with the money to burn have little direct experience, and secondly the whole point of the exercise is not in fact paying people to do things directly, but rather creating a situation in which near all of the benefit is realized through the secondary effects generated by the highly publicized existence of a large sum of money. A research prize works by being a sort of extended publicity drive and networking event conducted over a span of years, a beacon to draw attention to teams laboring in obscurity, attract new teams, and raise their odds of obtaining funding. Connections are made and newly invigorated initiatives run beneath the light of a large sum of prize money, but at the end of the day that money becomes more or less irrelevant. It wasn't the important thing, it was merely the ignition point for a much greater blaze of investment and publicity. By the time a team wins, they are typically in a position to raise far more funding than the prize amount provides.

The ideal end result is that a field of science and technology is rejuvenated, taken from obscurity and thrust into the public eye, made attractive to investors, and numerous groups are given the attention and funding they need to carry on independently. This is how it worked for the Ansari X Prize for suborbital flight, and more quietly, for the Mprize for longevity science: in both cases the entire field changed as a result of the existence of the prize and the efforts of the prize organization to draw attention, change minds, and build new networks. But the award of money wasn't the transformative act, and in fact that award didn't really occur at all for the Mprize, but rather change was created through the sum of all of the surrounding effects.

So consider this: people who arrive at the state of being wealthy and wanting to change the world through philanthropy, often after decades of for-profit investment participation, don't have much in the way of comparable experience to guide them in the establishment and operation of research prizes. Thus creation of a research prize falls low in the list of strategies under consideration by high net worth philanthropists. Few people do it, and so there are few examples from which others can learn. It is the standard vicious circle of development, in which steady, grinding bootstrapping is the only way to create change.

Why care? Because research prizes work well. They work exceedingly well. Depending on how you care to plug numbers into equations, a well-run prize of $10 million will generate $150 to $500 million in investment in an industry, and that is just the easily measured result. Just as important is the following change and growth enabled by that initial burst of attention and funding. The Ansari X Prize spawned a number of other prizes in various industries, but I think it remains the case that medicine and biotechnology is poorly served in this respect. Outside of the efforts of the X Prize Foundation, the New Organ prizes, and other independent efforts such as the Palo Alto Longevity Prize, there is little going on. Given the proven utility of prizes there should be many more of them, and yet there are not.