InnoCentive – Fortune 500 meets 80K Biochemists

23 03 2007

Community That Brokers Expert R&D Solutions

In 2001, InnoCentive was begun by Eli Lilly as a web-based community matching the global biochemistry scientist community to R&D challenges facing leading companies rewarding scientific innovation through financial incentives.

Companies (like Proctor & Gamble an early entrant) contract as “seekers” to post R&D challenges gaining access to a growing global community of currently 80,000 scientist “solvers.” Many of these professionals were attained through agreements with universities and research institutions throughout the world.

The process provides IP protection for the “seekers.” They review together with InnoCentive solutions returned by “solvers” and selects the best solution. Innocentive issues the award to the winning “solver” which has reached payments as high as $100,000US.

Business Model

Once a solver executes a services agreement a private online room is created to interact with InnoCentive staff and permit the review by the approved solvers of the seeker’s confidential material

The solver’s proposed solutions are posted and then reviewed by InnoCentive who work with the solver to refine as needed. Innocentive selects the best submission and awards are paid to the solver. Identities of both parties are kept confidential until a verified submission has been accepted and award paid; InnoCentive bills the seeker for that amount plus its fee. An indemnity agreement is obtained from the solver to protect both the seeker and InnoCentive.


Year 1 – 2001

12 challenges issued with 82 submissions from 16 countries

Total awards paid out totaling $333,500US

Total fees paid by seekers to Innocentive $430KUS

Value of solutions to seeker $8.8MUS with a cost savings of $200KUS (20:1 cost/benefit as measured by P&G)

InnoCentive charges roughly $80,000 per solution after award payment.

Desire to Accelerate Life Saving Medical Research

Recently, InnoCentive announced that Prize4Life, Inc., a non-profit organization founded to accelerate Lou Gehrig’s disease research, has offered a $1 million incentive for innovative research achieved through InnoCentive.

In December 2006, The Rockefeller Foundation and InnoCentive announced that the Foundation will create a non-profit area on InnoCentive’s global scientific network, specifically designed to spur science and technology solutions to most pressing and complex humanitarian challenges posed by non-profit entities selected by the Foundation.


Expanding One’s Stakeholder Base

This service expands the global diversity of audience of solvers by geography, field, work experience and life stages. Contract labs, retirees, students, faculty, small pharma, biotech firms, and research institutes are all signed up through InnoCentive. Over 50% of Solver Awards have come from outside the US. And foreign governments have embraced this model as it keeps their best and brightest at home.

What This Teaches Us?

If you are an association whose members’ professional expertise can be tapped (e.g. computer scientists) you may be able to leverage your existing network of experts to create a intermediate market that matches their supply of talent with challenging problems that seekers of solutions might find attractive. You might leverage your global brand name to create a trusted “networked information resource” community that lets your members solve problems and make money doing it. You could collect fees from seeker companies who might have never spent that kind of money with you previously (e.g. advertising, sponsorships,etc) because they didnt impact their revenue opportunities.  You might further increase the sales of your existing products and services as more people use the “business community” you have developed (e.g access to your digital library to reference something to help you with your research).

It would be a compelling value proposition whose member value includes not just the ability to buy commodity products and services at a discount, but more importantly, the ability to source paid opportunities to practice their craft and advance society through the solution they propose. Makes renewing your membership more of a no brainer…




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