How Incentives Can Change The World

Jaison Morgan Interview

Pre-Roll

Brandon Stover: [00:00:00] Before we get to the show today, I wanted to share a podcast that I'm really enjoying. And as a purpose-driven founder, I think you will also.

It's called purpose talks created by the business of purpose and hosted by Izzy, our Beck who sits down with business leaders to discuss the new business world. We're purpose talks over. In each one of their episodes, they talk with not one, but multiple companies focused on one business element jam packed with a bunch of insights and topics such as brand activism, give back models, open hiring practices, transparent supply chains, and a whole bunch more.

They even host Q and a events with our guests like the upcoming event on July 20th, featuring Lynn Johnson, founder and CEO of hella social impact. Talking about racial justice.

So if you've been enjoying the evolve podcast, then go ahead and give purpose talks to listen. Just search purpose docs in your podcast app, or follow the links inside the show notes.

Interview Start

Hey, you welcome to evolve the show about the stories and skills of social entrepreneurs solving the world's greatest challenge. I'm your host, Brandon Stover and today's guest is Jason Morgan, founder and CEO of carrot, a competition platform that puts many brilliant minds to work solving tough problems.

As the market leader in the design development and operation of large-scale incentive programming, Kara has over 10 years of experience in hundred percent success rate in allocating over $500 million to teams developing solutions in a wide variety of areas. In fact, carrot has been responsible for such initiatives as the MacArthur foundations in a hundred and change. Offering a single $100 million grant to the winning team and the NASA tech Lee price, a new portal to open source that development of mission, critical objectives for satellite technology.

Carrots portfolio has over 40 case studies from philanthropic corporate and government sponsors around the world that have brought together a community of over 170,000. Problem-solvers from 190 countries. Now Jason has been recognized by the BBC. As the world's expert in designing prizes and challenge competitions to drive innovative breakthroughs, he also helped establish a lab at MIT to study how targeted rewards can be used to induce new solutions to engineering obstacles And frequently lectures on the subject of incentive engineering

today, he's going to share how he built carrot, his unique skills from over a decade of being a founder and his mission to create open, transparent, and fair processes of granting awards, prizes, fellowships, and other forms of incentive-based programs to people like us, the innovator solving the world's greatest challenges.

Now let's hear from Jason exactly about the mission he's on and the problem that he's solving.

Jaison Morgan: [00:02:33] So I incorporated the company carrot in 2010. And at the time what we were seeking to do was to build a more open, transparent, and fair experience for those who would be seeking funding. And this may be in the form of a grant, a contract, maybe a fundraising round for a commercial enterprise. And by making that more equitable we could make it more effective. I don't know how many of your listeners have ever applied for a grant or applied for a contract through a government agency, but it can be an extremely opaque and maybe even disheartening process one in which you spent weeks or months writing content only to get an email back that says, sorry, you didn't win.

That's a big problem to solve, because if you think about it by an improving that you're improving a large range of different kinds of potential solutions and you're solving for a large amount of pinup capital that we believe can be used or efficient. And if you think of us as kind of an assessment, a partner, really someone who can help those funders find better solutions.

The application of that is also very broad ranging. I mean, we work on issues related to disease states to NASA technologies to homelessness to local conditions and local communities. So it gives us a tremendous vantage to come in and build more open, transparent, and fair processes for funders to find great solutions.

Brandon Stover: [00:04:03] Absolutely. Yeah, you guys sort of had a wide variety of different competitions recently helped NASA launch the tech leap prize, which is supporting mission critical goals for space travel. Can you use this as a case study example to show how your solution works?

Jaison Morgan: [00:04:17] Sure, sure. Our relationship with NASA goes back much further. They came to us and that they said they wanted to open source the development of a new particle sensor on the international space station. So rather than hiring one firm to come forward with a blueprint or a bread board design, they wanted to open up that process to as many people as possible, not just engineers, but people working in other fields.

And so we successfully delivered a wide variety of these types of solutions and the leading particle scientists at NASA came back and they said, wow, we've discovered things that we never thought we would find. And this has not only been a great survey of all the technologies that are out there, but we found things that are going to work even better for us on the international space station.

And that competition, the earth space air prize was was such a success that they came back. And they said, well, now we'd like to look at other technologies and for the Mars landing mission they were looking at new technologies that could convert astronaut breath to glucose, to sustain life on the surface of Mars.

And so we ran a competition there, which generated amazing, and again, a wide breadth of different solutions for that team. Following that we've had a number of other engagements with NASA and some other federal agencies that are using open sourcing and crowdsourcing. But most recently the NASA tech li prize is a platform, a central platform that invites solution providers from all over the world to respond to specific challenges that help advance technologies around their suborbital missions.

So, first one we're doing on the tech leap prize platform is around remote sensing technologies for small satellite. And there were, there are going to be more of those published and managed on that same hub, that tech lead prize. And we are going to be getting a wide variety of both solvers and seekers who are going to help with those missions.

Brandon Stover: [00:06:15] amazing. Yeah. Although that they're creating innovative solutions and we're doing new things with this prizes and challenges are not anything new. During your Ted talk, you talked about them starting 400, 500 years ago during, you know, problems with Warren famine. Can you give us a brief history lesson on challenges?

So we kind of understand the powers that these have had in history.

Jaison Morgan: [00:06:35] Sure, sure. So the first is that we've been able to find occurred around the mid 15 hundreds. And what was happening at that time is that a lot of innovation would occur inside of these very closed networks of trade guilds and labor unions. And sometimes these were even secret societies, right? If you can imagine if you wanted to change a process like how to build a ship or strict steeple, you would have to become an apprentice in those guilds.

And then you have to climb a ladder and it wasn't until much farther along that you could affect the process. And so occasionally our leadership back then would bump into the limits of those closed networks and they would, they would say, oh my gosh, we've, we've, we're suffering from a war, a famine, a plague, some kind of pestilence, and we need to speed up the innovation process.

And so they would have these challenges, these open calls, sometimes they were prizes. Sometimes they were called premiums and that's where they would invite anyone from anywhere in the world to help solve a specific problem. And there would be a reward attached to that. And it didn't matter where you went to school, who you knew, where you were in this caste system.

If you could solve the problem, you would win both fame and fortune. And there were a tremendous amount of breakthroughs that occurred during that period, probably from the early 15 hundreds leading up to the early 19 hundreds. And, and if you look at the case studies, they're really fascinating.

You know, Napoleon was tramping across Eastern Europe and he came back and his soldiers were starving in the fields of Poland. And he said, I need a way to preserve food. And so he had this, this prize competition and the guy that came forward was actually a candy maker from Paris who learned that if you could put food inside of a champagne bottle and vacuum seal it, you could preserve that food.

And that's very much the way that we preserve food today. There are many other examples of this, like determining longitude on the high seas and, so many other applications. And those things came about because leadership started to realize that we take a more open and free market approach to solving problems.

We're going to get talent and ideas from all over the world. And it's likely that it's going to speed up the rate at which we can solve these problems.

Brandon Stover: [00:08:50] Well, you worked in policy and non-profit sectors for, you know, almost a decade after college, before studying incentives and challenges at MIT. What was it in policy and nonprofits that turned you to start looking at price challenges as an answer to maybe solve some of the problems?

Jaison Morgan: [00:09:07] Well, when I was in graduate school in Chicago, I think ever Chicago, I was much more interested in kind of the behavioral science aspects of how you incentivize and motivate people to do that. And I had an opportunity coming out of there. I went to work for the mayor's office in Chicago, mayor Daley.

And during that time I was a senior policy advisor and I was kind of put in charge of some of the programs in the parks, the schools and the libraries. So I got to take some things that I was kind of natively curious about in graduate school. And I got to apply them in a real world setting. And we were using incentive systems to get kids, to apply for programs, to get families, to participate in programs and the parts, schools and libraries.

And we were even taking things like summer internships and using that as a reward to get kids to do things in school and in after-school programs. And so that was really a great experience for me because not only did it allow me to apply these principles, but it was also very entrepreneurial experience.

It sounds kind of counterintuitive, but when you work for the mayor's office in Chicago, they basically give you a business card and a telephone, and they want you to go and get these things done. And it's a, it's a tough business to be in and you got to report to the mayor. And at the end of the day, if you don't get it accomplished, you know, you lose credibility.

And so you have to find ways to get people to participate or to follow your lead, or to, to feel like they're part of a joint effort and to buy into that vision. So in a lot of ways, it was a great setup for me. When I later started to launch my own business out after I left Chicago,

Brandon Stover: [00:10:43] Yeah. Do you remember some of the incentives that you were incentivizing these people to, you know, follow through with some of the initiatives.

Jaison Morgan: [00:10:50] Well back then when I was at the city of Chicago, we did everything from midnight basketball leagues to afterschool arts programs to summer internships. It was a wide range of things. We didn't have the capital to just go out and offer cast prizes.  what we would do is we would go to a lot of the businesses that were developing real estate around the city of Chicago.

And we would ask them to contribute to some of our non-profit partners, and we use those funds in order to drive those programs. So not only we were we're re-exploring incentives for how to get these kids and families to participate in these programs. We're also exploring incentives and how you sell those kinds of programs to sponsors and donors.

And say that that in and of itself is a very interesting process.

Brandon Stover: [00:11:36] Yeah. Amazing. Well, when you worked for the X prize, what did you learn about from that organization about prizes that made you decide you wanted to start your own business?

Jaison Morgan: [00:11:46] Yeah, that's a great question. So when I was at X prize, we were kind of in the early years and those that are not familiar with X prize should know that their model is really to offer a very large cash reward or what we call a bounty. So they'll put up say $10 million for the first person to do X.

One example of that is the Ansari X prize. And the Ansari X prize said that if you could take a privately financed spacecraft, launch it up to a hundred kilometers twice in two weeks with only touch labor on fuel costs on the second trip that you could win $10 million something that had never been accomplished before.

And that would invite a wide range of participation to achieve that outcome in doing so you shipped a lot of the cost or the burden onto the competing teams. Cause you only get paid if you accomplish that. And this kind of represents some of those early prizes that I explained that happened so many hundreds of years ago.

Right? And so in looking at this model, one of the things we know new is that prizes had not been fully utilized for quite some time. And we are kind of reinventing this approach and leaning into kind of the internet and ways to broadcast these challenges using media and social media. And because we are kind of first in it, wasn't too hard to get on the front page of the New York times.

It was, it was actually easier than it is today. When you were offering such a prize or such an award, and as a result, the X prize foundation saw a tremendous amount of leverage. And so I witnessed this firsthand and realized, oh my gosh, this whole idea of incentivizing behavior, this whole, like this science of prizes is something that deeply fascinates me.

And that can be used in a very practical way. Now, as more and more prizes started to come on board, it was harder and harder to run programs where the costs entirely shifted over to those competing teams. We can be published a study in 2009 and the use of these models has been gaining by about 18% a year over a decade.

So there's a much more crowded space getting on the front page of the New York times. Isn't as easy now. And so we have tried to follow the general premise of that, but also to create more incremental awards along the way to create an actual process. That's a lot more transparent and that provides a lot more accountability and value both to the sponsor and to the participant.

Brandon Stover: [00:14:12] Okay, well, you validated the idea of incentives through the various things that you'd done before your business. So when you became startup, it seemed like your first challenge was to get that first customer willing to take this process that you were inventing. What was your first competition and how did you convince them to put up a prize amount and let you run their competition?

Jaison Morgan: [00:14:32] Yeah. Yeah. At the time when I founded this company was technically in 2010, but in 2009 is when I left the X prize foundation. And I had been recruited to go to Abu Dhabi in the United Arab Emirates. And there, they were building a city called Masdar city.

It was a $30 billion project when they started out. I mean, it was supposed to be the first zero carbon footprint city in the world that they want to build from the ground up. And one of the things that they realized is they were starting to bump up against the limits of what the technology could produce.

And they had to draw a lot of talents who are going to be involved in the project from all over the world for many, many different disciplines. And so I had an strong anchor partner when I, when I had founded what is now. And not only were they generous and allowing me to kind of experiment and to you know, support a number of their different initiatives.

But we started out with a fellowship program that looked at bringing in new talent in about 18 different disciplines related to climate change and various related disciplines. And in doing that, we built our first software platform. We learned how to market those kinds of competitions and it started to expand out.

So we did a lot of prizes for mass star, and of course that allowed me then to more organically develop the company shortly after that, we had contracts with the us federal government and with some private foundations and it just kind of took off from there.

Brandon Stover: [00:15:59] Carrot focuses a lot on consulting and the software to run these challenges. What problems did you discover with your users when running these competitions and how did you go about discovering those.

Jaison Morgan: [00:16:11] I'll give you an example. When you're really trying to build a rigorous and reliable assessment platform, I, you start to bump into these kinds of mechanics. You start to realize that there are limits to what you can do. And so we at carrot try to create both competition and collaborative aspects of the user experience.

It's all about making sure that people get value out of this process, whether they win or lose. And so for example, at the heart of our is what we call our normalization opera rhythm. And what this means is that whenever you're running a competition that requires subjective review in order to do that properly, And you have to accommodate a large number of applications, and you have to realize that not every judge is going to look at every application.

And so this becomes an issue, right? Because if one group of judges studying one small sex segment of the larger pool of applicants or hard graders, and another group were easy graders, you know, you're giving a competitive advantage to one over the other. And we normalize our assessment and we recalibrate those scores based on different measures of distribution.

We normalize and normally sensation actually occurs at five reviews per entry. This means that if we get a hundred applications that are valid, we have to, we have to conduct 500 reviews, which means you need about 50 judges looking at 10 aggregations. Each you can realize right Brennan at some point that curve bends and it will break.

If you get a thousand applications or 10,000 applications. This can be challenging, right? And so we started to develop new tools that would deal with that. One of those is our peer to peer review process, which allows the applicants to actually judge each other in the first round of review. Now, this is a really interesting tool because not only is it very reliable, a lot of times those working on the front lines of a particular cost are your best judges, but because we normalize it, it's fair.

You can't gain the system by scoring other people low in order to score higher yourself. And when we look at the data, what we see is there's a tremendous amount of sharing, and there's a tremendous amount of feedback that occurs with that. So not only is it kind of a self-selecting and a scalable process, you can accommodate as many applicants as you want.

Sometimes the best feedback comes from those other peers that are working on the front lines of. And oftentimes this leads to people going online and talking about what a great experience this was and also kind of, you know, getting into joint ventures and sharing more information than we ever thought they would.

So this is an example of tools that we built to facilitate collaboration and exchange, not just to efficiently run competitions,

Brandon Stover: [00:19:01] Yeah. I think that peer to peer part is an amazing piece because smart people like to get in contact with other smart people. And when that happens, there's often collaboration as you were talking. Yeah. Where maybe they didn't win the prize, but they were able to see these other teams and see the, okay, well, they have some parts that are missing in our solution.

Maybe we can work together. Maybe we can create something new. So it's even though it's a challenge and they're technically going against each other, there's probably a lot more collaboration that happens in the end.

Jaison Morgan: [00:19:29] whenever you allow that to happen. It happens. It's unfortunately true that too often, that we don't allow that exchange.

Brandon Stover: [00:19:38] Let's talk a little bit about developing prizes and when should a philanthropist or an organization consider using a prize as a means to solving a problem by creating a social benefit.

Jaison Morgan: [00:19:48] Yeah, the word prize is actually a very interesting topic. Some people really chafe against it. I think it for many implies a game of chance or a certain kind of like a lottery or something that's more trivial than it is. We've actually moved away from that word. But what I will say is that whether you call it a prize or a challenge or a solicitation or an open whatever that might be at the end of the day, you're inviting people to compete for funding.

And you're allowing this process to be a more equitable and more fair experience for those. And so the answer, your question is anytime someone is looking to either invest in a company provided grant or contract, or to make some kind of resource allocation, they typically have to go through a competitive process.

And what we offer is just, again, a more specific set of tools to make that more effective for them.

Brandon Stover: [00:20:44] Okay. And how would you take, so you have a certain amount of funding that you want to give towards this problem that you've identified, or this big aspiration that you. And you're trying to identify maybe the barrier that you need to overcome to solve that problem. How do you create a competition around that so that it overcomes that barrier to solve that problem?

Jaison Morgan: [00:21:04] That's a great question. We tend to look at that more as economists than behavioral sciences. And I think too often, what you'll see is that sponsored are very ambitious and they're very eager to get their problems solved for as little money as possible. And this is true across the board. It's unfortunate that those same sponsors rarely actually look at the problem through the eyes of the solver.

And so, for example, there was a philanthropist here in Los Angeles, in the 1980s who was dying of cancer and he offered a million dollars for the first person to solve his form of cancer, kind of in a last ditch effort to save himself. What we know about curing cancer is that the regulatory hurdles and the implied costs of curing any kind of disease state, any advanced disease state are in the manifold more than what a million dollars.

Brandon Stover: [00:22:01] Yeah.

Jaison Morgan: [00:22:02] just to get a new chemical compound through the FDA will cost billions of dollars and take you know, anywhere from 10 to 25 years. And so when you look at the application of these competitions, it's first important to realize what are the likely implied costs of that solution. And to make sure that the rewards are commensurate with the costs.

And so people will come to us all the time saying we want to offer a million dollars to do X and we come back. Then we say, listen, you might want to start to calibrate your outcome against those costs. And we might look downstream a little, might go into diagnostics, or we might go into other interventions that have lesser cost implications so that the client or the sponsor can afford the outcome that they really want.

And so a lot of times the initial engagement is about making sure that rewards are commensurate with costs. And then after that we get really creative. We get into the, all the protocols and the plug and play aspects of how we can build these prizes.

Brandon Stover: [00:23:06] Yeah. In a presentation that I had seen of yours, something I found very fascinating was that putting up the most money does not always equate to the most participation from people getting involved. So can you walk us through how to like design a prize, defining you know, who the participants are to setting the rules for the competition?

So it gets the most engagement possible.

Jaison Morgan: [00:23:25] First of all, it's important to know that the success of the prize or the intended outcome is not necessarily correlated to the volume of resistance. So we will sometimes run prizes that are looking for a very specific point solutions where the success may only require anywhere from 12 to 50 different ideas to be submitted.

And, and during the program design, we will actually calibrate that we'll write an outreach and engagement strategy plan, which allows which allows the sponsor to know here's how many of the different types of participants we're going to solicit and we're going to engage for you. And then we build the model entirely around them.

Other prizes are designed for maybe more trivial participation, but broader and wider pools of those applicants. I'll give you some examples. So well probably one of the programs where most well-known for is our support of the MacArthur foundations 100 and change program. This is a single $100 million.

That has been now administered twice per month, Arthur, with a third round scheduled within the next three to four years. That program does not have a specific problem that we're solving for. It really only invites anyone with an idea or a plan that can solve a problem that will benefit the world at the scale of a hundred billion dollars.

And then actually that program was really hard to design what we did at the first time, because you're trying to build an assessment protocol that can accommodate an extremely wide range of inputs. And at the same time, you're trying to create value for everyone who participates in it. We're running a $90 million prize with our partners at library for change for the Kellogg foundation around racial equity, we're running a $40 million prize with our partners at lever for change that is sponsored by Melinda French gates, Mackenzie based out of Scott and Stacy Schusterman around gender equity in the United States.

And we just launched a prize not long ago. That's a $12 million pool of awards for improving democracy in the United States. So these prizes that I just mentioned are very broad in their, in the question that they're trying to answer. And so they then require, again, an ability to accommodate a wide range of inputs.

And that has been a much different process than say, trying to come up with a new technology for the department of department of Homeland security. Which we've also done. And so you can see this kind of range of different models, and also the, it requires a range of different approaches to building those programs.

Brandon Stover: [00:26:00] Yeah. All right. And you decided early on to only do competitions that are for social. Good. So can you explain why you made that decision?

Jaison Morgan: [00:26:07] you know, we have an amazing tool. Sometimes I feel like I'm the guy that gets to write the rules of the NBA and then like, say the sidelines and watch the game unfold. Right. I get like the front row seat and, and we're been able to solve an unbelievable amount of very important problems. And you know, given my background, I really wanted this to be a social enterprise.

I didn't want to use this for coming up with new, you know, vape technologies or, or better ways to mine oil in the Arctic. I really wanted to take this super power that we have in directed and making the world a better place. And we've consistently done that. We are a business. We are a California.

Limited liability corporation. And we run like a business, but all of our programs target intended outcomes that will benefit the world.

Brandon Stover: [00:26:53] do you feel like a personal responsibility to be trying to solve these problems or supporting the people that are trying to solve these problems?

Jaison Morgan: [00:27:00] Yeah, I do, because I get personal satisfaction out of this. I mean, it's, you know, like to, to look at the range of ideas that that have come out of any of the competitions I just removed, I just mentioned it is a privilege. But at the heart of what we do, you know, I, I just remember when I was writing grants at the city of Chicago to get the federal government to support some of our work, I found it incredibly frustrating.

Often times you go through this process and you write your proposal, you may spend weeks or months going through it. You submit it into this black box only to get back, you know, maybe an email or a pink slip that said, sorry, you know, we went with someone else that's so disheartening and we can do better as a society.

And I'll tell you this. I have been an entrepreneur and a person running my own business for over a decade. And the same is true for those other folks out there that are entrepreneurs seeking funding for their business. And the next wave of our technology is really gonna be applied to solving that problem as well.

So how do, how do successful entrepreneurs seek funding to support their businesses? You know, and, and how can we use our assessment platform to give those investors better access, to deal flow, and to give those companies seeking that investment a better overall experience as they seek that as they go about getting those businesses funded, that really takes us to kind of from a service-based business to a more transactional business.

And that's really kind of where I see the future of our company.

Brandon Stover: [00:28:35] Yeah. You mentioned when you were filling out grants, you know, getting a letter back that says, you know, sorry, we're, we're not going through with this for the people that don't end up winning the main prize of these competitions. What are the benefits for them or what are they usually getting from it?

Jaison Morgan: [00:28:49] Well, we make sure that anyone that goes through this process receives both specific scores in comments against a defined rubric that we use for each competition. So at a minimum, they will get that feedback. So it's absolutely clear and accountable as to why this, this work. If you think of the value they get, it's often commensurate with the level of effort that they put into it.

So the baseline is that you're going to get a justification for your placement in the competition. And oftentimes they'll use that feedback to retool and to go after another grant somewhere. A lot of times the requirements that we've built into our applications are formative in nature, meaning that we're asking these people to go out into the communities and to give kind of authentic endorsements of their approach from the end users for the beneficiaries.

So in making them go through this process, we believe that we have a real inductive effect on those organizations that they get value out of it by meeting the requirements. So again, as long as the value is commensurate with the level of effort, you can find a lot of value for those that work hard in our competitions.

But for those that succeed, this is interesting because we have often gone through great lengths to make sure that not only do we have winners, right, but we also have other people that may be placed very high in these competitions, which can gain access to other funders. So we will often in panel judges who have their own discretionary capital so that they can look at investing in some of these teams.

And in some cases we produce what we call search engines. And this is where at the end of a competition, we will reveal all of the application content so that third parties can come in and sort through that. And they can find other investment opportunities. When we did this for the first a hundred million dollar competition at MacArthur, we published that search engine and with the help of the MacArthur foundation and great effort put in by their team there over $450 million was invested in the non-winning teams to date.

And I think that number continues to grow. So we want to make sure that we'd be putting in the hard work. You're going to get feedback. You're going to get value. You're going to feel connected and you have the possibility to, to get funding, whether you win or lose.

Brandon Stover: [00:31:02] Yeah. Coming back to you, Kara, as a business, you know, with your partners, you focused a lot on marketing strategies and PR for these competitions to get them out there, but which of these strategies have really helped your business? Carrot grow?

Jaison Morgan: [00:31:14] A lot of our growth has been organic to date. We really don't do a lot of advertising. People see the scale of the programs we deliver and they come back to us and, you know, they're looking for credibility. They're looking for seasoned experience. They're looking for tools that actually work. And so we've been able to build a company around our track record.

We, we are looking forward to doing a lot more kind of search engine optimization of our brand. We're fortunate in that we always, we often run the outreach and engagement strategies for our competitions. So we're quite good at that. And now we're looking at scaling up our own brand activation by using those same tools.

Brandon Stover: [00:31:52] Okay. And your company was originally two separate entities, common pool that provided the consulting services and then ramp it, which provided the software. Why did you decide to combine the companies and how did you make that decision or work through that?

Jaison Morgan: [00:32:07] So I was the founder of common pool in 2009, 2010. That has since been rebranded as carrot. A lot of our early work you'll see common pools stamped on it. Come up with was originally a consultancy because we didn't want to marry ourselves to a single platform. There were a lot of emerging technologies around assessment and around prizes and challenges.

And we wanted to kind of look at the landscape and see what was the best and brightest out there. And then about a year and a half later, we realized that there was no dominant design, that all of the features that we wanted, we were going to have to build on our own. No, I think of myself as a technologist, but I am not an software engineer.

And so I was able to find a business partner in Nashville, Tennessee, Shane Eggerman we hooked up and we incorporated the new entity rampant software, which is a subsidiary business of what was then common pool. And I'll just say this, anybody that's looking to break into the world of software development, especially around social enterprises.

It's not enough just to kind of lay out a framework of what you want. You really need a partner. Someone who's invested in that business who knows how to code, who knows how software works. And for me, that partner has been Shane Eggerman and we are like brothers in arms. We are extremely close. And Shane is kind of the other side of the coin when it comes to the work that we do and I'll play this.

A lot of other people have bought into our vision along the way. Lynn van Devanter is the head of our program design team. She runs a lot of the consultancy naphthalene Marshall is our chief creative officer who designs our front end websites and has a tremendous creative talent. He runs his own teams as we build those websites and those brands.

So we've picked up a lot of great folks along the way. It's really a joint.

Brandon Stover: [00:33:55] Yeah. I mean, as a founder, you have to Excel it, you know, sharing this vision with others. And likewise, you know, with the competitions, they have to share a vision for the participants to go after. So what skills did you learn to develop and sharing that vision and how did you develop.

Jaison Morgan: [00:34:11] it's really about leap of faith for many people, you know, I mean, oftentimes our clients come to us and say, we already have a mandate to give away a certain amount of grant money or give away certain amount of contracts or, or seek out companies that we want to invest in. But in asking them to take a more open approach to that, really, you need to be able to convince them if they're going to get what they want.

And in the early days there was the fear of failure, right? Well, if we go to market and we say that, you know, the us department of commerce, once our urban redevelopment plans in certain cities, And no one comes to the party. It can be very embarrassing. And so early on, we had to kind of dispel this notion that by taking a stronger marketing approach, by taking greater accountability and being more open to that, that they could have greater success and it's just been a slow build.

And now we feel like that there's actually a great amount of faith and fidelity in this process. And so we're seeing exponential growth on the demand for these services. So on the one hand, you've got to kind of satisfy their curiosity, calm their fears and show them case studies where this has worked.

And, you know, we put over 40 different examples of our work product on carrot.net and those range from anywhere from, you know, better diagnostics for lung diseases to obviously like racial equity and gender equity in the United States. And when they see that breadth, they get, they get encouraged and excited.

Brandon Stover: [00:35:38] Yeah. Can you explain some of the benefits for, you know, these organizations that want to run one of these competent.

Jaison Morgan: [00:35:44] the benefits on one hand are a lot around kind of brand and cause activation. Those sponsors, when we get around to writing the application requirements and the content on the website, oftentimes they're kind of reshaping the conversation because as those teams start to compete, they'll adopt a lot of the language that we put on those websites.

They'll use the terminology that we built into those rubrics, because they've been writing those rubrics for a month. They've been writing applications that will be scored against those rubrics for months. So one of the great effects is kind of rethink, reframing the debate and having an effect on those people, even after they've left the competition.

So from a marketing perspective, it's really valuable. On the other hand, just the outputs are just tremendous. I mean you know, let me just say. Karim Lakhani at the Harvard business school wrote a paper, I think around 2010 called openness and scientific problem solving. And Kareem and his research partners were looking at the question who are winning these prizes.

Like if we want to seek out kind of the who question, we can start to look at some of those case studies and we can start to survey the participants. We can see who they are with their drivers are. And so the Kareem allowed some of the participants in a certain set of competitions to do two things.

One, he was looking at highly technical competitions, like solving a problem in biology or chemistry. And he was asking the participants both to reveal their area of expertise and how far they thought they were removed from the target domain. So in a chemistry problem, you might have got chemists, drug pathologists, biologists, people that work in chemistry related fields saying, oh, I can solve this problem.

But you would, as you open up the process, you'd also find that people studying predictive analytics or data sciences that were very far removed from the problem statement, we're also jumping in. And the only way you can convince someone who's doing predictive analytics in the stock market to turn their attention to a chemistry issue is to level the playing field, to let them know that they have a fair chance of winning to actually make sure that it's a completely transparent and accountable process.

And when you do that, what Corinne found is that the likely winners to these deeply entrenched problems were usually six degrees or more separated from the target domain. So you have people that are trying to solve the same problems using the same tools over and over again. But once you open up their process, you have new solvers that had different sets of tools.

Applying them to these deeply entrenched issues. And that's what speeds up the rate at which they're solved. It's about diversity. It's about bringing in new talent and new tools. And that's what we need to do when we solve big problems in the world.

Brandon Stover: [00:38:34] How do you reach those disparate fields? Cause they're not always, you know, actively looking in this space and we'll see that, oh, there's a challenge set up now. So how do you get it in front of those eyeballs?

Jaison Morgan: [00:38:44] Well, the how question starts with the strategy, right? So making sure that you can hook them and then they can go to a dedicated website or portal and they can get all their questions answered. That's really important. But the other part of the, how is the mechanics of that, and we have a lot of experience around using the internet to reach these pools of talent.

You know, off the backbone of social media, you know, any Facebook, LinkedIn, Twitter, there are many, many different channels that we rely on. It's actually quite easy now to access those entries. And, you know, as long as you built that backstop where people can come and they say, oh, wait a minute, I could win a million dollars or $10 million, or even a hundred thousand dollars.

And all I need to go to this website is go to this website and see if I'm, if this is relevant to me, that's the, that's the first step. The second step is getting them to then go to that site, to register, to start revealing information about themselves, to jump on the backend of our platform and to start communicating through our forums and getting technical assistance.

So th the, the beginning of this is just kind of the hook, but then there's a lot that goes into it, engaging them further. And that really only works when you have a very open and accountable process.

Brandon Stover: [00:39:53] So once a competition is over, how do you guys measure the impact of the winners proposal and then make sure that the solution actually.

Jaison Morgan: [00:40:01] Every competition is different in each sponsor has different needs. And so they'll usually come to us and talk about their KPIs or their metrics. And usually we build those requirements into the application form itself. So you'll see someone saying, I'm projecting that we're going to have this level of impact.

And then they have to often substantiate that or show evidence of that projection or evidence of prior effectiveness. And so once we built that data, then it's up to our sponsors and their partners really to track whether or not they're meeting those milestone goals. Now there have been instances where we've taken on that responsibility but more than likely in, in most cases, the sponsors and donors are doing that work because usually that's the work they're more familiar with and that's more specific to the particular challenge,

Brandon Stover: [00:40:47] Sure. What has been the most impactful problems that have been solved with your guys's company?

Jaison Morgan: [00:40:52] the most impactful You know, obviously when you offer a single a hundred million dollar grant, right. And you know, you have a, another 450 million that gets invested. It's, it's tremendous. You know, the first winner of the hundred and change program was Sesame street, joining up with the IRC to develop early childhood curriculum in refugee camps around the world.

And, and you just can't imagine how much effect that has on that target population. You know, the second winner of the a hundred and change program was around homelessness. And that just recently got announced. And we know that homelessness is, is on the rise in America, and it's a very important topic.

So you can look at kind of the size of the product. Correlated to the size of the outcome, but there's a lot of work that we do. That's kind of smaller in scale where I have a tremendous amount of interest, you know the head of the Arizona community foundation and their team has been a longstanding client and they came to us, you know, when Arizona was suffering from drought and water scarcity, and we ran a series of competitions that looked at local conditions and local leadership and local buy-in of those solutions.

And we had a very, very strong impact around how leaders, you know, arranged solutions, how they, how they configure different solutions to deal with drought and water scarcity there how they could raise awareness of the problem and ultimately how they could celebrate those solutions. So I will tell you this, whether it's homelessness in Los Angeles, whether it's drought in Arizona or economic development in Greensboro, North Carolina you know, we, we really like the prizes that are more authentic.

And kind of directly related to the specific conditions under which the problems can be solved.

Brandon Stover: [00:42:37] Yeah. For like a small city or you know, a organization that maybe only has, you know, 25 K or even, you know, just a thousand dollars and they have a small problem in their community is a challenge or something. If they were able to, you know, take some of the things that we're talking about today, is that a way to help develop solutions in that community?

Do you think it would be a viable option?

Jaison Morgan: [00:42:58] Yeah. I would say, you know, it come up where we work on a fixed fee basis. And as part of our mandate, we make sure that we're not only dealing with the larger sponsors, but we're also, we've got a very strong set of case studies that are for smaller, more community-based organizations family offices local government agencies.

And so we do a lot of that work. I will tell you this, there's no correlation between the size of the reward and the cost to administer a program. We could show you many examples of prizes that offer millions of dollars, which have very low operational budgets. We can also show you prizes that have very small awards, but that much, much higher administrative costs.

And so we try and work with our partners. We have a three tiered pricing card or pricing structure, and our lowest tier comes in and about 175,000 fixed fee. And that's doing everything for those clients. And so some cases we're working on things like with Colorado state university or MIT, and we're dealing with in a very large state where they're used to heavy overhead costs.

And in other cases, we're dealing with smaller, more nimble foundations or family offices that are willing to make the investment to improve the process because they see that they're going to leverage the fewer awards they can give. They're going to have a much more deeper impact on the cause or the community by going with a more open approach.

Brandon Stover: [00:44:24] Yeah. What are the implications for something like this, for the challenges, something as devastating and by COVID could challenges be used to help solve the current problem that we're.

Jaison Morgan: [00:44:35] Yeah. I mean, at the end of the day, the government and private interests have to find solutions and invest in them. Now the word prizes again is very loaded. And so if you look at the different models that probably fall under that term one of those is what we call an advanced market commitment or an AMC AMCs were pioneered by government agencies.

And the gates foundation was heavily involved in the initial AMC approach. And that's where a company or a business or a government agency says, says we would like to purchase. X number of solutions at a certain cost per unit. And if you can come forward and prove that you have a viable product or a viable solution, we will make that purchase agreement with you.

An AMC is kind of an incentive. It's kind of like a prize. And AMCs have been used mostly around SDGs and in, international aid programs. But increasingly we're applying the AMC approach. And if you look at what happened with COVID in large part, the government did exactly that. They said, you know, if you pharmaceutical companies can come forward, we will buy a certain amount of these vaccines and then distribute.

So it became a way to kind of fill, you know, that market failure to kind of allow that the, for the subsidized, the financial returns for those companies so that they could invest in those solutions. And this is true for a lot of orphan diseases. Maybe COVID is an example of an orphan disease, but in other cases, when you're dealing with like malaria issues and in African and Asia, those pharmaceutical companies, aren't always motivated to solve those problems when they can make more money, you know, carrying tennis elbow or male pattern baldness.

So you look at like the AMC model is one way to drive that behavior.

Brandon Stover: [00:46:22] So you studied behavior and you've been working forever in this incentive structure. Can you kinda explain how incentives are running the world? Maybe not in the ways that we see in, you know, when are the incentives good and when are the incentives bad and how that kind of creates different implications?

Jaison Morgan: [00:46:42] Yeah. I mean, that's a really big question. People have spent their entire lives trying to answer it. And if you look at it the way that that question is being approached today, versus the way that it was maybe approached in the 1950s and sixties. There's a very different attitude. You have very familiar I'm sure with game theory and some of the principles that have come out of economic our early pioneers in game theory, you know, they came out of a depression era through world war II and they tended to look at the world as as, as a model of scarcity.

You know, economics has been called the science of scarcity. And when you're in a zero sum game, it's very important that you look at that, that game and you start to think, okay, if you squeeze over here, you know, you're gonna inflate over there. And so, so a lot of these early pioneers looked at game theory more through the lens of scarcity.

As we look at life through a lens of abundance, as we look at the notion of in information being infinitely available at your fingertips, as we look at what happens when people collaborate and they exchange. What happens when people work together in a team-based structure and also what happens in social media when people are not only able to access information, but they're able to access other people with the touch of a button, the questions start to evolve.

The question start to look different. And one of the great things that we discovered in our work is that people have a tremendous thirst for connection and sharing. And in some of our most competitive environments, when we give people the tools and the features to connect with one another, they will do that.

We ran a competition around kind of a more algorithmic approach to assessing a long form construct essays, student written essays. The question was can a computer grade, the student written essay, as well as a trained human being these trials were called the automated student assessment prizes or ASAP.

Now, when you're dealing with more algorithmic response, more kind of very specific coded solutions. It's true that if I share my information with you, Brandon, we will very quickly get to parody and you will likely surpass me, but getting you to the same level as me is a reveal that most people won't make that that was our assumption.

But once we were running those prizes and we saw that when people were allowed to share information. The degree to which they were collaborating, just went through the roof. And so the progress towards the ultimate prize looked like the step chart. So you would have a large community of data scientists trying to solve this problem.

They would get to a certain point and they would kind of get stuck. And if you observe their behavior, all of a sudden they would start sharing information aspects of their algorithms, which were, which were very proprietary. And then all of a sudden you'd see the whole community move up and then plateau off again.

And the step chart, this ziggurat kind of like pattern occurred right up until the point at which they started together to surpass the standard. And they were able to do that in a very narrow window of time, only about three to four months. So by working together, they were collectively able to solve this problem more efficiently.

And it's only through that collaboration exchange that it was.

Brandon Stover: [00:50:00] Yeah, I can see definitely how, you know, with cooperation, we get to solutions a lot faster. How do you incentivize more collaboration, more cooperation between people, especially right now where we're sometimes we have polarization or tribalism and people not wanting to collaborate or cooperate.

Jaison Morgan: [00:50:19] Well, there's a couple of ways. One is you, as I've mentioned, you just give them the tools to do that. And then you sit back and you allow them to use those tools. And because there is so much pent up energy and you know, when people go to solve problems, they want to connect with other like-minded problem solvers.

They want that they're part of a community and that community of practice. And so you give them those tools and they use those tools. But in other examples, we actually require in some of our competitions that we only invite teams and sometimes even multi disciplinary team. And when I say multidisciplinary, that can be, you know, in terms of breadth of thought, it can be in terms of the demographics and the experience of the individual team members.

It could be geographic on there, different ways to define diversity. But usually when we require the team-based approach we see better outputs. We see a lot more authentic engagement. So, you know, with something like homelessness in Los Angeles county, which is a huge problem here we wanted not just people that could parachute a problem in from Seattle or St.

Louis. We wanted each team to include folks that were seasoned veterans. Who'd been working on the front lines of this cause here in Los Angeles, so they can inform those other service providers. And so we get more authentic response when we take a team-based approach and we invite people that have been working on that front line.

It's just an unfortunate truth that oftentimes the people doing the work don't have a voice. And what gets funded and so give them that voice.

Brandon Stover: [00:51:51] For you personally, knowing everything that you know about incentives, how has this changed your life or the way that you approach problems?

Jaison Morgan: [00:51:58] I am lucky. I, you know, I, I always look for the unexpected, because I know through over a decade of experience that the unexpected is how you, how you solve problems. I've got two kids and there's a movie called Ratatouille. And in that movie near the end, they say, you know, not every person can solve every problem but problems sometimes get solved by the least expected, person.

that is true. It is absolutely true. And you know, underneath that premise, you have a much more stronger commitment to democracy and meritocracy. And so and so this is affected me, you know, in that I, I believe in these principles because I apply them every day.

And I think when you offer a level playing field, you get better results

Brandon Stover: [00:52:47] well, you're helping to facilitate challenges that are, you know, making major impact, changing the world in different ways. What do you hope to create in the world for your teachers?

Jaison Morgan: [00:52:57] for my two children. So I think that another aspect of my work is that I have to remain eternally optimistic and I'm raising my kids to be optimists. And I think the data is there to justify optimism. Sometimes we get pulled into the news cycle or the day-to-day kind of, you know, doldrums of, of life.

And when you see, you know that there is plague and famine and war, I think it's very easy to become skeptic. But when you step back and you kind of elevate your thinking, you look at the arc of history, you know, we have a reason to be optimistic. If you look at the data, I mean th th on every, almost every level from, you know, maternal health and early childhood development, we are so much further along than we were 10, 15, 20, 50 years ago that, you know, that upward kind of lift is happening, whether we recognize it or not.

So I think we should all be optimists. I would say the other thing that really kind of in, in my opinion is important is this notion of what we're now calling justice equity, diversity, and inclusion. What were we, we had come up at carrot call Jed, I thinking and the unfortunate side of that is, you know, I believe that too many people approach this issue of diversity as if it is about reparation as if it is about taking people who have been part of it.

That maybe has been disenfranchised and trying to bring them back up to a level that is equal to their peers. That is fine, and that work should continue. What I'm more interested in is showing government and business private industry and other folks that you can solve problems faster when you embrace diversity is a business tool that when you allow people a voice so that, and the answer can come from anywhere, you know, you no longer look at the world as if it's about reparation.

You look at you, look at diversity as a tool of efficiency and effectiveness.

Brandon Stover: [00:54:54] Hm.

Jaison Morgan: [00:54:55] That's where I want the conversation to go, because we just have so much experience in this that the least likely people emerge when you give them a chance and they solve some of our biggest problems in the world. And so I would like to see us to start to hear this in the news, us to start to represent these case studies so that diversity equity, inclusion, justice, this is all about being better at what we do.

It's not necessarily about the sins of our fathers and forefathers. It's about making the world a better place, do more efficient problems.

Brandon Stover: [00:55:29] Yeah, I think that that's an excellent example of like first principles thinking, getting back, okay. What is our goal? Our goal is to solve this problem. Well, one of the best ways to solve this problem is to allow all of these people to come in and participate in trying to collaborate and make this solution.

And so by thinking that way, it's in your best interest and gets you to a winning solution a lot faster if you're just doing that normally.

Jaison Morgan: [00:55:53] Yeah, I think that's true. And even those people that don't win at the end of the day, they get an amazing education as they go through that process. And they meet a lot of other people who they never would have met before. And overall we get to lift the field. Right. I mean, listen guys, we've all seen, you know, reality TV and American idol and the truth.

You know, each year on American idol, somebody is going to win the big check. But the truth also is that sometimes it's the third place winner that gets the great record deal, right? So it's not about a winner, take all proposition. It's about informing and building community and building collaboration and letting kind of people enter the marketplace with something that they tried and tested, and that all of a sudden gets more light and more exposure and therefore gets more traction.

Brandon Stover: [00:56:40] Yeah, love it. Well, before I get to my last question, is there a call to action? You'd like to leave our listeners with today.

Jaison Morgan: [00:56:46] I would say that, you know, if you're in a position where you're trying to invest in a company, or you're trying to fund a solution, or you're running an RFP at tender, notice a solicitation, please, please open yourself up to the idea of doing this in a new way. We're seeing a lot of people interested in this.

We're seeing a lot of people using our model. So you won't be the first one. But just take a moment and think about this, because what we know is that a lot of people already have the desire to be more open, transparent, and fair. They just don't have the tools available to them. So we're seeing these tools that are being used every day for some of our biggest competitions around the world.

And now we want more people to kind of follow that.

Brandon Stover: [00:57:30] Well, my final question is how can we push the world to them?

Jaison Morgan: [00:57:34] How can we push the world to evolve? I would say by embracing diversity by realizing that diversity is about solving problems, as much as it is about reparation, I think it is about building a level playing field so that people can solve problems from anywhere in the world by applying new tools and tactics and inviting people from different disciplines to start solving problems in fields that may be where they're not as familiar.

You know, it's just not true that that a chemist can't solve a chemistry problem. Even if that problem has existed for a very long time they can do that. But when you bring a new set of tools, From a different discipline. And you combine that with people that have a thorough understanding of those underlying conditions only through that to teaming up and, adding new experience and new talent can you really unlock those issues?

And so it's, it's about diversity. It's about openness. It's about transparency. And at the end of the day, it's about a level playing field.

Brandon Stover: [00:58:37] Excellent. Well, Jason, thank you so much for coming on the ballpark house and sharing your journey and expertise about carrot.

Jaison Morgan: [00:58:43] Thanks a lot.  

Post Roll

Brandon Stover: [00:58:44] Hey, thanks for listening to this episode of the evolve podcast. If you want to hear some more topic focused discussions with the global innovators and purpose-driven leaders

that are just like you, And then don't forget to check out the purpose talks podcast. Just open up your podcast app and search purpose talks by the business of purpose. Again, that's purpose talks.

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