ChallengePost Picks Up $4.1M in Series A Funding to Help Run Online Contests for New Ideas

8/9/11Follow @jpruth

Finding the best answers to big problems can mean looking to an outside party with bright ideas. The trouble is finding those fixes immediately. New York’s ChallengePost, a Web-based platform for running competitions, gives organizations and individuals a way to attract contenders who think they have got the right stuff.

Brandon Kessler, CEO of ChallengePost, says he created the three-year-old startup to be a central place for community groups, government agencies, companies, and others to call attention to issues they want help resolving. Users of ChallengePost include First Lady Michelle Obama’s campaign to improve school lunches and the World Bank, which shared data with developers via the platform in an attempt to help meet United Nations Millennium Developmental Goals such as fighting disease and poverty. “Large organizations use our platform to solve big problems through technology,” Kessler says.

New funding from investors is helping ChallengePost meet some of its own goals. Kessler says the company raised $4.1 million in a series A round, announced Tuesday, led by Opus Capital. Other participants in the round include Betaworks and Richmond Park Partners as well as angel investors that include Irwin Jacobs, Esther Dyson, Jason Calacanis, and Joshua Schachter. Kessler says the funds will go towards creating new tools for the site as well as hiring a developer, a salesperson, and a product designer. ChallengePost, which currently has a staff of 14, previously raised $775,000 in a seed round that closed in 2009.

ChallengePost at its core is a way to farm out competitive problem-solving to the public. Individuals or organizations post the parameters of the challenges and any prizes or rewards to be handed out to those who succeed. Running the competition through ChallengePost, Kessler says, helps get the word out via the Web about the contests.

Kessler was already an entrepreneur as an undergrad at Columbia University where he was hired by the Dave Matthews Band to handle its radio promotions before the musical group hit the big-time. “Then in my sophomore year they hired me to do their street promotion, which was posters, stickers, and flyers on college campuses,” Kessler says.

In his senior year of college, 1996, he started an independent record label, Messenger Records, which he ran until he decided to launch ChallengePost. Kessler says after he returned to Columbia in 2006 to earn his MBA, he formed his plans for his new company. He had heard about a challenge posted on the Web by a young man in Texas who initially offered $100 to anyone who could create software to allow Windows to run on a Mac. Others added more money to the offered prize. “In three weeks there was $14,000 collectively contributed by individuals and corporations,” Kessler says. That grassroots movement, he says, inspired the creation of ChallengePost.

Brandon Kessler says ChallengePost helps large organizations find new ways to solve problems.

Kessler says ChallengePost has been used by such entities as electronics maker Samsung, information giant Thomson Reuters, music festival Lollapalooza, and the City of New York. Mayor Bloomberg’s administration uses ChallengePost for the annual NYC Big Apps competition to create software to improve aspects of life in the city such as the riding experience in the subways. Kessler says ChallengePost also created the NYC Big Apps Ideas website to keep a list of suggestions for new apps that would be useful to businesses, visitors, and local New Yorkers. “It’s a great way to allow the community to talk about what problems they want solutions for so that we can better scale the challenges,” Kessler says.

ChallengePost has also been used on a global scale by the World Bank for its Apps for Development competition, which concluded in April. The goal of that competition was to inspire software developers to take on such challenges as eradicating extreme poverty and fighting disease epidemics. “The World Bank has said the submissions were better than their existing apps that they created themselves,” Kessler says.

Most organizations pay ChallengePost to set up challenge websites, though the company uses a freemium model for its work with the federal government. Last September ChallengePost created Challenge.gov to serve federal agencies that run competitions for new ideas. “This is everything from creating a more energy efficient light bulb to creating recipes to improve school lunch menus,” Kessler says.

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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