Alph Bingham

President and Chief Executive Officer, InnoCentive

You don't get a PhD in organic chemistry without spending a lot of time in the lab—and Alph Bingham remembers well how his professors would turn to the 20 or 30 graduate students and post-docs in their research group and ask for their help in solving some complicated problem or another. The students would come back with 20 or 30 different answers, some of which might prove more useful in resolving the impasse, others less so.

In the late 1990s, when pharmaceutical giant Eli Lilly wondered if it was getting enough bang for its r&d buck Bingham recalled his student days.

"Watching the way industry works, where a problem only gets exposed to a handful of minds," says Bingham, a former vice president in research and development for Lilly, "things get invented, or problems get solved, based on resource allocation." In other words, who is available, and not necessarily because of who's best qualified to respond to that particular challenge.

"Indeed," explains Bingham, "who's 'best' may not even be knowable as solutions often involve a complex interplay between training, experience and serendipity." Short of turning to a few high-priced consultants (who may or may not solve the problem), was there a way for the company to tap into the vast pool of potential knowledge outside its walls and overcome hitches in drug development that the company's own researchers had been unable to overcome? Or, even to simply improve the solution speed and productivity?

Bingham has likened his concept to talk radio: If he broadcast an obscure question to millions of listeners, someone out there was likely to call in with the correct answer.

"Thinking about the way scientific creativity manifests, it's not always a given that the next problem you encounter will be solved by a Nobel laureate. Perhaps it will be by some guy at a rural, private college in Vermont or a small research facility in China or an East German startup," Bingham says. "So we asked ourselves, if we had enough diversity of exposure, would we get novel solutions? And the answer was yes."

Intrigued, Lilly invested several million dollars in 2001 to launch InnoCentive, implementing Bingham's vision of an online marketplace where companies with questions and scientists with potential answers could find each other.

About 30 'seeker' companies have signed up, posting challenges in a wide range of scientific disciplines, including the fields of chemistry and applied sciences—such as material and polymer sciences—and the life sciences, and offering rewards ranging from $10,000 to $125,000 for working solutions.

In turn, nearly 100,000 'solvers' from some 175 countries have registered on the InnoCentive site, where they can find new challenges each week. Tens of thousands of solvers might read the abstract of a challenge, Bingham says; only a few hundred who think they can realistically solve it continue to the details.

Of the 350 challenges posted on InnoCentive since it opened, about a third have been solved. The average posted reward is about $30,000; the highest awarded amounts to date have been three awards at $75,000 each (though higher bounties have been offered.) In return, scientists who present solutions sign over the intellectual property rights.

"What we effectively provide is a "spot" market—companies can get a problem worked on immediately," Bingham says. "We can buy and sell intellectual power without the costs associated with facilities, recruiting, career management, negotiations, custom contracting, etc."

Bingham compares the model to bounty hunting. While companies have spent more than a million dollars on challenges they've solved through InnoCentive, that's much less than it would have cost to invest in internal r&d to resolve them. Most importantly, they've paid ONLY for solutions and not for attempted solutions in the risky venture of R&D.

Still, many companies are reluctant to turn to outsiders for help with products in the pipeline. "Fundamentally, most places still run the old, classic, 'my lab, my walls' system," he says.

Thomas Edison, the quintessential inventor, once said that genius is 1 percent inspiration and 99 percent perspiration. Bingham thinks it's time to update that equation.

"There will always be a lot of perspiration involved," Bingham says, "but should the inspiration be 1 percent, or should we make it 10 percent by opening it up to a diverse net of human beings before you put the perspiration in? I think it's time to turn on the radio."