Second place in an oil-cleanup competition went to a dentist and a tattoo artist. That is how Salim Ismail, founder of Open ExO, told it on a Moonshots with Peter Diamandis episode recorded on October 16, 2026. The two met in Las Vegas while the dentist was getting a tattoo. The tattoo artist turned out to be an environmentalist and talked about the prize. The dentist said he knew a lot about bonding agents in liquid, and they tested their idea in a hot tub. "If that team walked into your office looking for funding, you're never getting the money," Ismail said. "They've never met. They have no experience. They don't know the domain."
The story makes the central argument for incentive prizes. A sponsor names a problem and a measurable result, sets the rules for what counts as success, and pays nothing until a team demonstrates it. Peter Diamandis, the physician and entrepreneur who founded the XPRIZE Foundation, has built his organization around that model. On the episode he made the case with Anousheh Ansari, XPRIZE's chief executive, and Ismail. Emad Mostaque, founder of Intelligent Internet, also took part.
What an incentive prize is
Diamandis started from motivation. "You get what you incentivize," he said, and he named four forces that drive people: fear, greed, curiosity and love. In his ranking fear is the strongest, then greed, then curiosity, with love varying by subject and person. He said he once calculated the ratio of fear to curiosity as the ratio of the defense budget to the science budget.
He contrasted incentive prizes with the Nobel Prize, which typically honors work done 20, 30 or even 40 years earlier. An incentive prize looks forward instead. In his words, it says: "I don't care who you are, what you've ever done, where you've gone to school. If you solve this problem, you win." Anyone can enter, and the sponsor carries no risk of paying for failure. Diamandis called that combination "a great business model."
Where the model came from
Diamandis traced the idea to three historical prizes.
The first was the Longitude Prize. In 1714 the British Parliament offered £20,000 to anyone who could find a ship's longitude at sea. Diamandis said the winner was a British clockmaker, John Harrison, who built a marine chronometer. Accurate time solves the problem, as Royal Museums Greenwich explains: Earth turns through a known angle each hour, so comparing local time with the time kept from a home port reveals how far east or west a ship has sailed. Ismail said the authorities "were so sure an astronomer would win" that they refused to pay Harrison, and he asked whether Harrison had to sue "for ages" to collect. The museum's account confirms a long fight, though not one simple refusal. Harrison built a series of timekeepers ending with H4, and demonstrations, demands that he disclose his methods and further testing led to prolonged disputes over his reward. For Ismail, the lesson was that the establishment "just couldn't believe that somebody who wasn't in the field could actually solve that problem."
The second example came from France. Diamandis said the French government offered a 12,000-franc prize for food preservation to feed armies on long supply lines. It was won by Nicolas Appert, whom he described as a confectioner who made sweets and who invented canning. The National Park Service's history confirms the 12,000-franc prize and Appert's background as a confectioner and chef. It also adds detail: Appert sealed food in glass jars and boiled them, not in metal cans, and he received the award in January 1810 after about 15 years of experiments. He worked without knowing that microbes cause spoilage.
The third example shaped XPRIZE directly. Diamandis said a friend gave him The Spirit of St. Louis, Charles Lindbergh's account of his 1927 flight. From it he learned that Lindbergh had not crossed the Atlantic on a whim: Raymond Orteig had offered $25,000 for the flight. According to Diamandis, nine teams spent a combined $400,000 chasing that prize, Orteig paid only the winner, and the winner was "the most unlikely guy to pull it off." The Lindbergh Foundation confirms the $25,000 Orteig Prize and the solo, nonstop New York to Paris flight of May 20 and 21, 1927, which took about 33½ hours.
How the first XPRIZE got its money
Diamandis wanted to fly in space, and a NASA career did not look like a way to do it. He said astronauts he met at MIT told him his odds of selection were about one in a thousand. Half of those selected had never flown and were called "penguins," because they have wings but don't fly. Those who did fly went once or twice in a career. "I want to go every weekend," he recalled thinking. He turned to commercial space and, after reading Lindbergh, to a prize.
He announced a $10 million suborbital spaceflight competition in 1996 without having the money. XPRIZE had raised $500,000, and he spent all of it on the announcement. Two board members resigned because they thought he was being reckless, "which of course I was," he said. He expected sponsors to line up because the prize paid nothing until someone won. Instead he pitched about 150 people over five years and kept hearing the same questions: Why isn't NASA doing this? Can anyone really pull it off? Isn't someone going to die trying?
The money came after he read a Fortune magazine profile of Anousheh Ansari, an engineer who had built and sold a telecom company. The profile said she was interested in a suborbital flight. Diamandis tracked her down on vacation in Hawaii and brought along Byron Lichtenberg, a two-time space shuttle astronaut. Ansari, her husband at the time and her brother-in-law said yes, Diamandis recalled, and the prize was renamed the Ansari XPRIZE. That commitment arrived at the end of 2001.
The competition had precise terms, according to XPRIZE's history of it. A privately financed, reusable spacecraft able to carry three people had to reach 100 kilometers twice within two weeks. SpaceShipOne, from Mojave Aerospace Ventures, won on October 4, 2004. XPRIZE reports that competitors spent about $100 million on research and development, ten times the purse, and Virgin Galactic later licensed the technology. Ansari herself flew to the International Space Station in 2006 and became the first female private space explorer; she became XPRIZE's chief executive in 2018, according to her XPRIZE biography.
Why outsiders keep showing up
The speakers returned again and again to the outsider. Ismail credited the "beginner's mind" of people coming from outside a field. Ansari tied it to crowdsourcing: a prize gathers a diverse set of ideas from people who are "not bound by a set of belief system that stops them from imagining something different."
The oil-cleanup prize was their main case. Diamandis said it began during the BP oil spill in the Gulf of Mexico, when the filmmaker James Cameron, then on XPRIZE's board, urged an emergency prize. It was aimed at reinventing how oil is cleaned off the ocean surface, not at plugging the well, and Eric and Wendy Schmidt agreed to fund it. The goal was to double the cleanup rate. Diamandis said about 350 teams entered and ten were selected to ship their equipment to an oil-spill testing facility in New Jersey.
Ismail drew a second lesson from it. A prize is most useful, he argued, where neither governments nor markets are doing enough, and nobody had an economic reason to fund research on oil cleanup. The winner's own history supports that point. In a company retrospective, Elastec says it had shelved its grooved-disc skimmer because customers were not asking for the development work, and the prize gave it a reason to revive the project. Against a target of 2,500 gallons per minute at 70% efficiency, Elastec reports recovering 4,670 gallons per minute at 89.5% efficiency, short of its own internal goal of 5,000.
Why the target matters
Ansari said clear, measurable targets are another reason prizes work. Many people want to solve a problem in general terms "but they don't really know what they need to do," she said. A measurable target "gives them a North Star." Diamandis called these "measurable objective targets." The work of turning an inspiring goal into an actionable rule, which Ansari called "the prize design," follows XPRIZE's annual Visioneering meeting, where philanthropists debate and fund new prize ideas. The 2026 meeting had just ended when the episode was recorded; XPRIZE's announcement describes participants scoring and voting on proposals and committing seed money.
The Global Learning XPRIZE, which Diamandis said Mostaque had led a team in, shows how much depends on that design. According to XPRIZE's 2019 announcement, five finalists field-tested Swahili learning software with nearly 3,000 children in 170 Tanzanian villages over 15 months. The grand prize went to the largest gain in basic literacy and arithmetic. Judges could not separate the top two, so Kitkit School and onebillion split the $10 million prize, and all five finalists' software was released as open source.
Love, curiosity and the leverage claim
Ansari connected the model back to Diamandis's list of motives. "At XPRIZE, almost every prize we have, the motives are love and curiosity," she said. She could not think of a competitor driven by greed, "definitely not fear." Teams that lose often help other teams or go on to build companies. When incentives run on greed, she said, "like quotas," the bad results follow.
The headline number for the model is leverage. Diamandis said XPRIZE has launched 36 prizes over 32 years, with total purses of about $550 million, which by his count had driven a little over $30 billion. Ansari said much of that is investment: teams had received about $12 billion during or after their competitions, which she read as a sign that neglected fields were now attracting investors. XPRIZE measures impact through capital investment, research and development, and awareness, she said, the last including the regulatory changes in favor of commercial space that followed the spaceflight prize. On that measure, the economic value created is 62 times the prize money. Ismail called it "the most leveraged model for innovation in the world." Ansari said she knew of no other leveraged philanthropic effort at all.
XPRIZE's own October 8, 2026 announcement gives the figures as $32.4 billion generated from $519 million in launched prize purses since 1994, about 62 times. The calculation is the foundation's own. Its numerator combines investment, research spending and awareness, and its denominator is purse money.
The $100 million carbon-removal prize tested that denominator. Diamandis said he texted Elon Musk, who was getting criticism for not being philanthropic, suggesting a prize. Musk asked what he had in mind, then how much. "A hundred million," Diamandis replied. "And he said, sure. That was it." The conversation noted the contrast with the 150 pitches for the first prize. Ansari said XPRIZE worried that adding $100 million to the denominator would make its impact figure look worse. Instead, she said, the teams received "I think, $1.4 billion" in investment, and the ratio rose from 60 to 62. The prize was awarded in April 2025, after a four-year competition in which winners had to remove more than 1,000 net tonnes of carbon dioxide in the final year, according to XPRIZE's announcement. The $50 million top award went to Mati Carbon, which spreads crushed basalt on Indian farmland to speed up reactions that draw carbon dioxide from the air.
Objections and limits
The speakers named one limit themselves. "It may not be the winner who's the commercially viable solution at the end," Diamandis said. "It may be, you know, second, third, fourth, but we're, we're cultivating a new industry." Elastec's account bears this out even for a winner: the company says its winning skimmer was impractical for everyday deployment and was eventually dismantled. Commercial work produced a smaller ten-disc model, the X150, rated at about 650 gallons per minute. Winning a test and selling a product turned out to be separate engineering jobs.
The larger warning came from badly chosen rewards. Diamandis cited French colonial Hanoi in 1902, where authorities paid a bounty for each rat tail during a plague. People cut off tails, let the rats go to breed and set up rat farms. Historian Michael G. Vann, who spent about six years reconstructing the campaign from archival kill records, memoirs and medical files, describes officials finding live, tailless rats, rat farms in the suburbs and rats smuggled into the city. Officials paid for tails to avoid piles of carcasses at city hall. Vann also notes that the city's new sewer system had given the rats a protected place to breed.
Diamandis's second example was Wells Fargo, where he said sales quotas led employees to open 3.5 million fake accounts. The U.S. Consumer Financial Protection Bureau's September 2016 enforcement action gives smaller figures: the bank's own analysis found roughly 1.5 million deposit accounts and 565,000 credit-card applications that may not have been authorized. The bureau tied the misconduct to sales targets and pay incentives, and it fined the bank $100 million. Ismail added a present-day example of his own, saying targets set for immigration agents at ICE had pushed them to arrest far more people than the criminals originally meant to be targeted, and that this was causing political backlash.
In both historical failures, the reward was paid for a stand-in: a rat tail in place of a dead rat, an opened account in place of a willing customer. Ansari's answer was the motive of the people competing, which in XPRIZE's case she said is love and curiosity rather than quotas. She also pointed to clear, measurable targets. Later in the episode the panel applied the same reasoning to how AI labs and their models are rewarded.
A tool for a chosen future
Diamandis described XPRIZE as "a tool to make the future happen that you want," and said he has used it twice for himself. The first was the spaceflight prize, which he believes "historically kicked off commercial space." The second came because "I want to live long enough to see all these amazing futures." That is XPRIZE Healthspan, which he called the largest contribution he has ever made. According to XPRIZE, it is a seven-year, $101 million competition launched in 2023. Teams must restore muscle, cognitive and immune function in adults aged 50 to 80 by at least the equivalent of ten years of age-related decline, using a treatment that lasts no more than a year.