Brandon Kessler’s got a knack for finding the next big thing. At the age of 18, the Columbia student was among the 10 people in the audience to hear a then-obscure group named the Dave Matthews Band. “I told them I thought they’d be huge,” Kessler says. “So they hired to me to do all of their radio promotion on the East Coast.” Kessler went on to do more for DMB, then started his own label, Messenger Records, heavy on the internet promotions.
Fast forward a decade or so, when he taps into yet another potential zeitgeist. Kessler’s back in the halls of academia –- this time on weekends to earn a business degree — and his study session is interrupted one night when he discovered a challenge online: $100 to anyone who could create a software program that allowed Windows to run on a Mac. The competition ramped up in just a few weeks. “As a marketer, I knew right then we needed an eBay for this, a platform that facilitated problem solving and innovation through competition. I knew it would be my next business,” asserts Kessler.
And just like that, ChallengePost was born — and secured funding — right before the economy crashed and burned in 2008. No matter. To date, Kessler and company have snagged 200 challenges from the likes of the City of New York to Samsung, financial firms to First Lady Michelle Obama and the USDA. Here’s what Kessler told Fast Company about obstacles, tactics and scale models as well as what’s in store as ChallengePost grows.
Did you have any unexpected difficulties or obstacles that made you have to adapt your initial vision to what is working now?
When the federal government decided that it was a necessary part of the future to crowdsource and do more with less, they decided they wanted one platform to facilitate these challenges. At the time, we had one platform. We immediately realized we had to create an architecture that allows governments (national, state, and local) and corporations to have their own platforms powered by ours. It was difficult because we stopped everything and built it in only 60 days, which was an incredibly quick turnaround. It’s been a huge success for the government and is central to our growth strategy, but it was originally unexpected and it reinforces the need to move quickly in order to succeed.
You’ve said that challenges are a great economic engine, but what about your business model?
We get paid by organizations to publish the challenge on our platform, which provides the best tools for running, promoting, and judging a competition. We also get paid to create the challenges, promote them, and manage them.
Do you think there will be a limit to ChallengePost’s ability to scale?
The only limit currently is that we’re incredibly picky about hiring the best people: A-plus stars who want to be at a company whose work is making a difference, and is profitable. We are tripling our staff now but are willing to wait as long as it takes to bring on more of the best software developers, online marketing experts, and business development superstars.
How much of the business is spurred by people’s spirit of competition and the desire for recognition vs. creating a cool/necessary challenge?
People are not just motivated by money, but by status and recognition, intellectual stimulation, the competitive spirit, and altruism. Those levers change depending on how cool or cutting edge the challenge is. There are no blanket rules, but we believe we know the most about which levers drive the best results for various types of challenges. And it’s exciting to see how social rewards drive a large return on investment for the organization who creates the challenge, because the prize money isn’t what is driving them!
You practically have an inside edge to seeing some of the best apps as they are created. Any desire to jump in and invest?
We leave that to the market. One of the winners of Mayor Bloomberg’s challenge NYC BigApps, called My City Way, quit their jobs on Wall Street, have launched in dozens of cities, are profitable, and received venture funding valuing them at several million dollars.
Also, we don’t just do software competitions. We have a challenge with the First Lady and USDA to create recipes to improve school lunch menus. Teams of chefs, school nutrition professionals, parents and students come up with the recipes and test them in school cafeterias before submitting them. We have video challenges, public service announcement challenges, technical challenges, and idea challenges across a host of verticals.
What’s next for you?
We are launching a big push to governments and corporations to allow them to do more with less through competitions and crowdsourcing, and to engage their customers in meaningful ways because these days if you aren’t having two-way conversations with your customers and the general public, you’re sunk.
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