XPrize focuses on ed tech, but will it succeed or fail?

The Global Learning XPrize is aiming to spur the design of software that can serve students in as direct, unmediated manner as possible

xprizeExciting news hit the presses recently—the XPrize is funding its first ed-tech competition. The goal: to handsomely reward the team that develops the best open source, scalable adaptive software to help children in developing countries teach themselves basic literacy and math.

As I’ve written about before, prizes are effective pull mechanisms to expedite R&D across a field and to in turn fill a gap that the market is currently failing to supply at scale. Unlike so-called push mechanisms that reduce the cost of R&D by directly funding research upfront, pull mechanisms incentivize private sector engagement and competition by creating viable market demand for specific products to solve specific problems. The XPrize is a good example of a pull mechanism, as are government Challenge Grants and social impact bonds.

A number of the past week’s headlines have characterized this new XPrize as an attempt to “disrupt” global education. The competition’s parameters indeed have the trappings of a disruptive play. Many disruptive innovations get their start by extracting growth from nonconsumption: that is, they target customers who are trying to get a job done but lack the money or skill and for whom a simple inexpensive solution has been beyond reach.

Disruptive technologies also tend to be easier to use—even if the technology underlying a product is sophisticated, it is its “foolproofedness” that creates new growth by enabling people with less money, expertise, and training to begin consuming. Eventually, these more accessible and affordable technologies can improve over time to serve more and more demanding customers and change entire industries.

The Global Learning XPrize explicitly targets massive global nonconsumption of education. As XPrize Founder and Chairman Peter Diamandis told Wired, “We’re aiming at kids who live in villages where there’s nothing. This has to take them from complete illiteracy to basic reading, writing and numeracy.” Moreover, by outlining the need for students in these communities to learn autonomously, the XPrize committee appears to be pushing for the very foolproofedness that can allow new technologies to scale across nonconsumers who lack resources and expertise.

(Next page: Why a whole new value network is critical)