For the past seven years, Luminary Labs has run innovation challenges for healthcare and pharma companies, including Sanofi, Merck & Co. and Janssen, racking up a total of 17 large-scale contests that shelled out more than $5 million in prize money.
Where are those prize winners now? Luminary heard that some took their ideas to market, won more funding or sold out to larger companies, but they wanted real data. So they surveyed 60 winners—finalists, semi-finalists and grand-prize winners—with responses from 14 contests from 2011 to 2017 to find out.
Two-thirds of the winning companies raised additional money—venture capital, grants, seed investment or angel funding—and nabbed additional prizes worth anywhere from $5,000 to $25 million. That’s more than $100 million total in additional funding, Luminary CEO Sara Holoubek said, and that's a conservative estimate.
The projects didn't “die on the vine” as innovation-challenge skeptics might predict, she said. Instead, 92% continued to develop their winning ideas post-competition, and eight went on to file patents.
More than half (52%) of the winning ideas are market-ready now, and another quarter (23%) boast a working prototype. That's a lot of progress: Before they entered the contests, 30% were simply concepts or ideas and only 10% were market-ready.
“I think some people believe an innovation challenge is a bunch of ideas that don’t go anywhere, but we found—at least among our challenges, I can’t speak for others—that the teams actually do continue to invest and develop the solution and, in many cases, become market-ready,” Holoubek said.
The survey also dug up some insights about what the winning teams thought about the contests themselves. Money was important, of course. But so were intangibles. Earning validation for their ideas was a boon, and so were access and exposure to the people and organizations backing the challenge.
Perhaps not surprisingly, money mattered more to the teams that were ready to take their products to market. And the cash was the biggest motivator in contests with big-money prizes.
But 47% of those surveyed said learning opportunities—in ways such as bootcamp or mentorship—were an important benefit of participating. Another 33% named the value of connecting with challenge sponsors, mentors, judges and other participants was an important benefit.
“Open innovation is here to stay, it’s not a fad. It’s an excellent mechanism to identify and spot potential in the earliest stages,” Holoubek said. “Open innovation, like all innovation, is a both a long and a short game. It’s important not only to track how a team does during a challenge, but to track them over time … Open innovation shouldn’t be a one and done.”