Wednesday, January 31, 2007

You Want Innovation? Offer a Prize - New York Times

Read the full article for another timely invisible hand snapshot. 

So on the Ides of March last year, Reed Hastings, the company’s chief executive, and three other executives were meeting at their Silicon Valley headquarters to talk about making the system better. They had just finished discussing one failed effort — a promising algorithm designed by a hotshot computer scientist from Stanford (since lured to Google) — when Mr. Hastings threw out an idea.

“We should run a prize,” he said, an open competition challenging people to come up with a better version of Cinematch.

One of the other executives asked how much the company should offer, recalled James Bennett, the vice president who oversees Cinematch.

“A million dollars,” Mr. Hastings said.

With that, Netflix unwittingly started down the path of proving that today’s economy doesn’t have nearly enough prizes.

Source: You Want Innovation? Offer a Prize - New York Times

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