Last winter, John B. Rogers (everyone calls him Jay), CEO of Local Motors, a micro car factory in Phoenix, AZ, received a phone call from Regina (pronounced with a hard 'g') Dugan, director of the Defense Advanced Research Projects Agency, the Pentagon's trippy, high-tech research and development arm. Would he be interested in crowdsourcing a marine assault vehicle for DARPA?
Dugan had found the right guy. Rogers, 37, is an evangelist for what he calls "co-creation." It's not an alternative theory for evolution; rather it's an offshoot of crowdsourcing, and Rogers, a former marine, has staked his entire business on the concepts of open source code, Wikipedia, Creative Commons, and the inherent wisdom of crowds—taking designs and suggestions from the thousands of gearheads that frequent his company's discussion boards, working with those who proffer the best ideas, and putting them to work. Local Motors designs and builds cars by committee, except in this case the committee is comprised of tens of thousands of do-it-yourselfers.
There's power in upending 150 years of industrial production tradition. After all, the Wright Brothers were the ultimate DIYers, and they invented the airplane. And Rogers' theories had already been put to the test. He scored his first success in 2009 with the Rally Fighter, the first-ever crowd-sourced car, which was the culmination of 35,000 designs submitted by car junkies living in 100 countries. The winner, chosen by his peers, was a student at Art Center College of Design in Pasadena, who based his sketches on a P-51 Mustang fighter plane. When the souped-up off-road Rally Fighter (sticker price $50,000) rolled off the assembly line last year, it had parts cobbled together from Chevy, BMW, and a host of other automotive companies. Popular Mechanics took it for a test drive and completed an off-road course in less than half the time a standard four-by-four could do it, raving about the Rally Fighter with its "daddy-longlegs suspension" and comparing it favorably to a Lotus; Jalopnik, the auto blog, called it the "coolest looking car ever."
For her part, Dugan had been investigating her own crowdsourcing experiments, which she saw as one way to collapse ten years of research and development into two. Spiraling, out-of-control costs for new technologies were fast becoming a serious threat to the nation's defense. The average piece of military hardware takes a decade or more before it hits the battlefield with each delay adding significantly to its expense. It's a vicious cycle: The longer it takes to produce a piece of battle hardware, the more complexity is added to keep up with technological advances; the more complex it is, the more it costs and the longer it takes. Indeed, the General Accounting Office (GAO) reports almost $300 billion in cost overruns for weapons systems begun in just the past few years. Earlier this year, for instance, the Air Force launched a space-based infrared system, a satellite first conceived in 1986. Years of Congressional bickering and inter-service squabbling drove the price tag into the billions.
Really, though, if you want to understand why Dugan is so intent on speeding up the pace of innovation and decrease the cost of technology, you need to remember only one number: 2054. That's the year that DARPA deputy director Dr. Kaigham J. Gabriel estimates the cost of a single, state-of-the-art aircraft to equal the entire Department of Defense budget.
Dugan had identified a lack of "diversity" as a major culprit, with the same fat half-dozen or so military contractors bidding for contracts. Her solution was to model an approach on the open source software movement, to push for the inclusion of small companies, even lone do-it-yourselfers with various levels of expertise, to tackle small pieces of far more grandiose projects.
Seven months after taking the helm at DARPA in June 2009 she OKed the agency's first crowd sourcing experiment, a very public game involving 10 red balloons that had been secreted throughout the United States. The object was to be the first to find all 10 and collect a $40,000 winner-take-all prize. "It was a very DARPA-like experiment," Dugan says. "We didn't know if it was going to work." There was a lot of internal debate. Would someone find all the balloons in 20 minutes, which would make the game uninteresting, or would they fail to find them at all, making the game a highly publicized failure? Dugan, believing in the power of the crowd, predicted it would happen within a day—and that's precisely what happened when a group of MIT students located all ten in 8 hours and 52 seconds.
Now Dugan was looking for a bigger canvas on which to test her theories, which brought her to Rogers. She nixed the idea of building the vehicle, codenamed XC2V, from scratch. Instead Dugan and Rogers agreed that Local Motors would produce a drive train and chassis based on set of specifications that DARPA would provide, and its DIYers could then customize it with their own bodies and interiors. DARPA then put out a challenge to the community of 25,000 car buffs that frequent Local Motors' message boards: design a ground combat vehicle with the capability to medivac two people and resupply troops in combat. The winner would receive $7,500. Over the course of four weeks in March and April more than 600 submissions came in, of which more than 150 were deemed buildable by Local Motors and a panel of DARPA engineers.
The crowd voted on the best design and the winner was graphic designer Victor Garcia, who works for Peterbilt, a truck maker in Texas. He exemplifies the talents of the crowd. As a contract worker, the 34-year old learned his insurance wouldn't cover his son's birth. When he heard that DARPA was offering a $7,500 prize, he jumped at it. The prize money covered his wife's doctor's bills with a few thousand left over. A military history buff, he still has his GI Joe collection from childhood, he was excited about the prospect of designing a military vehicle. He spent almost every spare moment that month working on his 3D models. He designed his to be lightweight, thin, but well protected and shaped it to offer clear sightlines for soldiers to be able to return fire. It would carry four people and the back would slide out to carry two or three wounded soldiers, too. During the building phase, the crowd was able to chip in with further suggestions, including new hinges for the back to slide out.
Fourteen weeks later and two days after his son was born the XC2V was ready for the road. Total cost: $638,000. Unveiled in June at Carnegie Mellon University's National Robotics Center in Pittsburgh, PA, President Obama hailed it as a way to get products "out to theater faster, which could save lives more quickly," and the technology would transfer faster to the private sector. "It’s good for American companies," he said. "It’s good for American jobs. It’s good for taxpayers. And it may save some lives in places like Afghanistan for our soldiers."
The best part of the ceremony for Garcia, though, was hitching a ride in his creation. The vehicle, with its Corvette engine, was so powerful it practically lifted off the ground. "It's one thing to look at drawings," he says, "but to feel it, to experience it, was just awesome."
The XC2V passed the first test. Now Agency director Dugan is rolling out this ambitious, more open process across DARPA. It's an audacious plan, and if she's successful, she will completely change the way the military does business at a time when budgets are crunched and runaway price tags for technology threaten to undermine America's edge.
Adam L. Penenberg is a journalism professor at NYU and a contributing writer to Fast Company. Follow him on Twitter: @penenberg.