Joining in the latest wave of funding innovation, San Diego’s Qualcomm (NASDAQ: QCOM) today launched a new international business plan competition called the QPrize.

In a short announcement, the wireless chipmaker said its corporate venture fund has created a pool of $550,000 to provide early stage funding to the most-promising plans submitted by entrepreneurs “who can accelerate wireless technologies in key business sectors.”

Qualcomm Ventures will select a semi-finalist from China, India, Europe, and North America. The four semi-finalists will each receive $100,000 in funding and an invitation to Qualcomm Ventures’ CEO Summit in San Diego in November to compete  for a Grand Prize. There are no entry fees, but Qualcomm’s rules require participants to pay for their own travel and accommodations.

Qualcomm says the winner of the final QPrize competition will get an additional $150,000 in convertible note funding.

History is replete with examples of cash prizes that were used to spur innovation. One of the most-notable success stories was a series of prizes established by the British government in 1714 for a method that could precisely calculate the longitude of a ship at sea.

The X Prize, which was created in 1996 and awarded in 2004, has revitalized the practice. Peter Diamandis, who created the $10 million X Prize to stimulate the development of technologies capable of taking ordinary people into space, has said he was inspired by the $25,000 Orteig Prize that Charles Lindbergh claimed in 1927 with his solo flight from New York to Paris. The U.S. government even joined in, with the Pentagon sponsoring a contest to develop autonomous robotic vehicles.

In Qualcomm’s case, the company appears to be using its QPrize as part of its broader strategy to proactively seed its proprietary technology across various markets. By stimulating the creation of new companies, especially in China and India, the wireless giant can broaden its sphere of influence by creating a business ecosystem that shares the same technology.

[Xconomy San Diego Editor Bruce V. Bigelow contributed to this report]

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Fourteen years after Peter Diamandis proposed the idea of creating the X Prize to spur development of low-cost spaceflight, San Diego-based Prize Capital said today it has entered the final phase of creating a $10 million prize to encourage advances in algae biofuels technologies.

As part of the final planning process, Prize Capital founder and chairman Lee Stein convened a workshop of 26 leaders to draw up rules and other criteria for what Stein calls the $10 million Algae Fuel Prize. The group met for much of the day at UC San Diego’s Scripps Institution of Oceanography, and Stein told me during a break he had invited venture investors, scientists, environmentalists, and business and government leaders from across the country. But he was not willing to say how long final planning will take before the competition will be unveiled.

“I don’t know how much more work will be needed,” Stein said. “You can’t change the rules after you start.”

In announcing the algae fuel prize, Stein cited the historic success of prize competitions, including Charles Lindbergh’s first flight across the Atlantic Ocean and the $10 million Ansari X Prize. The X Prize was claimed in 2004 by acclaimed aerospace designer Burt Rutan, whose project was supported by Microsoft co-founder Paul Allen.

Stein acknowledges that significant government and venture funding already is flowing to develop commercial fuels from algae. But he said creating a prize competition provides an added incentive by stimulating additional research and by attracting worldwide public attention to specific aspects of a problem. For Stein, that means calling attention to the energy needs of the developing world, which represents the fastest-growing source of carbon dioxide emissions. He said there are billions of people in developing countries “who are living on a $1 a day—and if they get a second dollar, it goes to buy fuel.” Stein hopes that fuels derived from algae, which absorbs carbon dioxide before it is harvested for fuel production, can become a cheaper and cleaner alternative to burning wood, coal, and dung in developing countries.

Prize Capital’s announcement is the culmination of work that began more than a year ago, Stein said, when initial planning began at the Washington Renewable Energy Conference. “We started by deciding we would do something that focused on energy and the environment,” Stein told me. Over time, he expanded the number of people involved in the process and gradually settled on developing a biofuels prize based on algae.

Prize Capital’s planning for the competition must be both meticulous and comprehensive because the Algae Fuel Prize also represents the first application of Prize Capital’s alternative venture funding model. Under this model, Prize Capital provides working capital to select teams that enter a competition as a way of providing financial leverage so teams of all sizes have sufficient resources to actually develop innovative technology.

In the algae competition, Prize Capital proposes to:

—Create a prize focused in an area that has been fully vetted, so that the competition can both accelerate innovation and create investment opportunities.

—Form a master limited partnership to fund teams.

—Reach agreements with teams that accept funding that include terms for subsequent investment rounds as competitors succeed in advancing their technologies.

—Allow teams to opt out of the investment rights.

Investors will own a percentage of equity in all direct competitors supported by Prize Capital. The firm says its investment model mitigates risk and enables investors to share in the success of multiple companies beyond the competition by spurring the development of commercial applications from multiple teams, and not just the winner.

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Can competitions and prizes get you to the Moon? Google thinks so—it’s backing the $30 million Lunar X Prize, which will be awarded to the first privately funded team that sends a remote-controlled robot to the Moon, drives it 500 meters, and collects video of the trip. Back here on Earth, the $10 million Archon X Prize is being offered to the first team that can build a device that sequences 100 human genomes in 10 days or less, and the Wellpoint Foundation is proposing a $10 million Healthcare X Prize for the first organization that figures out how to deliver a 50 percent improvement in the cost-effectiveness of community healthcare over a three-year period. Right here in the Boston area, Waltham, MA-based InnoCentive is using the prize model to attract solutions for dozens of problems, ranging from improving the fire resistance of polyurethane foam to accelerating the growth of soybean shoots.

But in Glastonbury, CT, there’s a company called TopCoder with a prize-based business model that predates all of these efforts. It’s using the model to create products that are arguably more relevant to our economy in the short term—better software applications. And it’s doing it for far less money; first-place winners rarely take home more than $3,000.

Companies like AOL, ESPN, Ameriprise, Ferguson, Geico, and LendingTree have outsourced thousands of software development projects to TopCoder’s worldwide freelance community—”from something as simple as a Web page all the way up to full-blown enterprise resource planning (ERP) systems,” in the words of company founder and chairman Jack Hughes.

The model is so successful that it’s attracting the attention of business scholars from Harvard, MIT, and other academic centers. “They’re creating enterprise-class software projects in a highly distributed setting, and for me that was an order of complexity that I wasn’t expecting,” says Karim Lakhani, an assistant professor at Harvard Business School who has written two papers about TopCoder.

You might wonder why the competition model attracts any willing participants, considering that competing takes a lot of work, and that the big money is usually reserved for the top-placing teams, while everyone else gets zilch. Indeed, I’ve always wondered whether giant prize programs like the X Prizes are an efficient way for a society to array its resources—just look at the 26 organizations that collectively invested more than $100 million competing for the $10 million Ansari X Prize. All but one of the teams walked away with nothing after Burt Rutan’s SpaceShipOne won the prize in 2004.

But TopCoder has invented a system that seems to work, both for its clients and for its community members. For one thing, the company never bought into the winner-take-all concept. For each competition, the company sets the dollar amount of the first-prize award based on the size of the job and the amount the client is willing to pay. TopCoder sets aside about half as much for the second-prize winner. The third-, fourth-, and fifth-place winners don’t get cash, but they do get points—and everyone gets paid later out of a general prize pot based on how many points they’ve accumulated.

“We wanted to avoid the problem of people submitting and always coming in third and never getting paid,” says Hughes. While it’s standard practice elsewhere in the software business to offshore software development to the cheapest available labor pool, “We just weren’t interested in that,” says Hughes. “We were more interested in …Next Page »

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Paul Allen just got a new addition to his Flying Heritage Collection of vintage aircraft. Yesterday, the Paine Field facility in Everett, WA, held a media event in which the museum hoisted a full-scale replica of SpaceShipOne to the ceiling. Just thought Xconomy readers would be interested to see these photos (courtesy of Jennifer Bragg and Adrian Hunt).

SpaceShipOne was funded by Allen and received the $10 million Ansari X Prize in 2004 as the first low-cost, civilian, manned spacecraft launched into suborbital flight (to an altitude of around 100 kilometers). The craft, and its replica, were built by Mojave Aerospace Ventures and Scaled Composites. The original ship is on display at the Smithsonian in Washington DC.

Back in August, Luke took a tour of the Everett hangar facility, which opened to the public last June. It looks like the SpaceShipOne replica will feel right at home, as it is placed near the collection’s ME-163, the world’s first operational rocket-propelled aircraft—an inspiration to the design team of SpaceShipOne.

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Is it just me, or have ultracapacitors somehow become the latest hot and mysterious alternative energy technology?

Just a few weeks ago, my Xconomy colleague Greg Huang reported that Seattle startup EnerG2 landed $8.5 million in venture funding to develop a new class of ultracapitors that use nanocomposite materials to store energy. Before that, Light Electric Vehicles of Eugene, OR, announced that EEStor, a secretive company in Cedar Park, TX, would supply ultracapacitors next year for LightEV’s two- and three-wheel vehicles. Then I noticed that one of three finalists in a $25,000 contest organized on YouTube to solicit ideas for a new “Energy X Prize” was a proposal to create a new storage medium—an “ultracapacitor.”

This fascination may be due to the fact that the technology is akin to catching lightning in a bottle—literally. An ultracapacitor is an electronic device used to store electrical energy. It can charge and discharge electricity almost instantaneously, albeit at low voltage, hundreds of thousands of times without being depleted.

Now it just so happens that a San Diego company called Maxwell Technologies (NASDAQ: MXWL) has been developing ultracapacitors for the past 15 years. So this flurry of recent announcements left me confused. Doesn’t the technology needed to make ultracapacitors already exist?

So I arranged to talk with David Schramm, the CEO at Maxwell, which has been manufacturing ultracapacitors for commercial customers for the past seven years or so. And I asked: What do these recent announcements mean? Is the big breakthrough in ultracapacitors yet to come?

“I have a hard time shadow-boxing against some of these things, I don’t know where to start,” Schramm says. “It’s one thing to write on a piece of paper what you’re going to do, and it’s another thing to work with people who have actually done it.”

Maxwell, which was founded as a government R&D contractor in 1965, inherited its expertise in ultracapacitors from working on power sources for pulsed lasers at the Lawrence Livermore National Laboratory. Maxwell decided to focus on developing ultracapacitors for commercial markets in the early 1990s, as defense spending plunged in the years following the dismantling of the Soviet Union. But making money from ultracapacitors has been a challenge for Maxwell, and the company has been continually reinventing itself for the past 10 or 15 years.

One problem, Schramm says, is that the industrialized world …Next Page »

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Twenty-two teams of aspiring automakers, including Carlsbad-based Aptera, have registered so far to compete for $10 million in prizes offered as part of a “Great Race” to develop super fuel-efficient vehicles, the Progressive Automotive X Prize said today.

Aptera, which began development of a futuristic-looking three-wheel passenger car five years ago, is among the teams that have registered to compete in two dramatic, long-distance stage races scheduled for next year, X Prize spokeswoman Carrie Fox said. The $10 million purse is split between the alternative class and a mainstream class that requires entrants to operate cars with four-doors, 4-wheels and other basic features.

The contest is open to teams building vehicles that are capable of reaching the marketplace, not concept cars or science projects. That means each team must have a business plan that shows a capability for producing 10,000 vehicles, Fox said. Guidelines for the contest also include a new yardstick for measuring MPG, the miles per gallon standard that has been, um, distorted by the conventional auto industry. The new standard is MPGe—or miles per gallon equivalent—which summarizes a vehicle’s energy efficiency even if it’s not burning gasoline.

Aptera was founded about five years ago by Steve Fambro, who wanted to design and build a safe, comfortable passenger vehicle that was more fuel-efficient than anything on the road. The company, which says its first prototype gets 230 miles to the gallon, has raised about $24 million in venture funding from investors that include Idealab and Google.

Progressive Insurance gained naming rights for the Los Angeles-based Automotive X Prize by agreeing to put up the prize money, Fox said. Details about entries from the Pacific Northwest are available on Seattle Xconomy here.

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The Automotive X Prize in Los Angeles announced today it has chosen its first 22 teams to compete for $10 million in prizes that will be awarded for developing super fuel-efficient vehicles (100 miles per gallon or equivalent is the nominal goal). Among this first wave of contenders are three Northwest teams: Bellingham, WA-based Avion; Kinetic Vehicles, based in Cave Junction, OR; and the Vehicle Research Institute at Western Washington University in Bellingham.

—Avion has built an aerodynamic, diesel-powered, ultra fuel-efficient sports car. The company is led by Craig Henderson.

—Kinetic Vehicles has developed MAX, a turbocharged diesel-powered roadster. Its fuel comes from petroleum, biomass, or straight vegetable oil. Jack McCornack leads the operation.

—Western Washington University’s Vehicle Research Institute (VRI) has developed a series of cars called Viking, which run on gasoline, electricity, or biomethane and compressed natural gas. The VRI was founded by Michael Seal in the 1970s and is now headed by Eric Leonhardt.

The Automotive X Prize, which is sponsored by Progressive Insurance, will kick off its competition next year, holding stage races in several cities. More than 100 additional teams have signed letters of intent to compete so far, according to the X Prize website. The winners are expected to be announced in 2010. “The technologies reflected in this first wave of Registered Teams are as diverse as the teams themselves, and we look forward to hearing more about their individual ideas in advance of the 2009-2010 stage race competition,” said Julie Zona, director of team development and relations for the Automotive X Prize, in a statement.

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Updated (see below): A student group at MIT’s Sloan School of Management has been named one of three national finalists in a contest seeking YouTube video proposals for the creation of a new X Prize in Energy and the Environment, the X Prize Foundation announced today.

Jonathan Dreher’s 2-minute proposal, “Energy X PRIZE: Reduce Home Energy Usage,” notes that renewable energy technologies could have a big effect on our energy future by increasing the supply of energy. However, he notes, “This approach is already getting plenty of attention and may not benefit from a prize for additional incentives. The other, often forgotten way, is to reduce our demand for energy.” And, as Dreher notes, “Unlike a technology-based X Prize, every American can participate.” He claims that a $10 million prize focused on energy conservation could have a $1 billion impact.

(Update, Nov. 17: I finally reached Dreher, who noted first off that he worked with two fellow students, Jeremy Stewart and Michael Norelli, on the proposal. All three are in a dual-degree program that will garner them a Sloan MBA and a master of science in engineering systems from MIT. Neither Steward nor Norelli was mentioned in the X Prize release.)

The X Prize Foundation, of course, is famous for its huge prizes that address key technology and innovation challenges. In 2004, a Burt Rutan-led team financed by Microsoft co-founder Paul Allen won the $10 million Ansari X PRIZE for suborbital spaceflight. Since then, the foundation has created the $10 million Archon X PRIZE for Genomics, the $10 million Progressive Insurance Automotive X PRIZE, and the $30 million Google Lunar X PRIZE. The foundation and its partner, BT Global Services, are now in the process of developing prizes in Space and Ocean Exploration, Life Sciences, Education and Global Development, and, of course, Energy & Environment.

Which is what the Crazy Green Idea Contest is all about. The contestant whose video garners the most votes before the end of this month stands to take home the $25,000 top prize. And, according to today’s announcement, their Crazy Green Idea will be “explored as the next X PRIZE in Energy and the Environment.”

In addition to Dreher’s proposal, the other two finalists (out of 133 submissions—does that sound low to anyone?) were:

—Alan Silva, from Roy, UT. His idea, The Energy Independence X PRIZE, is described as: “A prize to develop energy-independent homes that exist completely off the grid.”

—Kyle Good, of Irvine, CA: His concept, The Capacitor Challenge, centers on development of “a new storage medium, an ‘ultra-capacitor’.”

We’ve embedded all three proposals below. You can find all the finalists and vote for your choice, here.

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Jim Benson, an impatient visionary and aerospace entrepreneur, died today of a brain tumor, according to a statement issued by SpaceDev, the San Diego-based company he founded.

SpaceDev developed the hybrid rocket engine used to power SpaceShipOne, the Burt Rutan-designed spacecraft, in its historic 2004 suborbital flight, which won the $10 million Ansari X-Prize. Benson, who was 63, resigned from an operational role at SpaceDev two years ago, but retained a seat on the board.

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A prize for a prize. That’s essentially the reason a trio of heavyweights—Ray Kurzweil, Xconomist George Church, and Saul Griffith—will be on hand at MIT this afternoon, as they help announce a $25,000 prize for whomever comes up with the best idea for a $10 million energy and environment prize to be awarded by the X Prize Foundation.

More specifically, the $25K will be offered for the best YouTube video proposal for the big kahuna energy prize. The contest itself will be formally announced at a forum called “Seeking Radical Breakthroughs in Alternative Energy—What I Would Advise the Next President,” which will be held at 4:30 this afternoon in MIT Building 34, room 101 (you can find a few more details here).

The competition for the $25K prize should be tough. In addition to tapping various experts and its public YouTube call, the foundation is hosting the X PRIZE Lab @ MIT, a class this fall that focuses on the energy and environment sector. According to a press release, “The semester-long X PRIZE Lab class is asking students to conceive potential X PRIZEs that could help solve aspects of global warming and resource depletion. Last semester, the X PRIZE Lab @ MIT focused on healthcare. Students in the class proposed a Tuberculosis (TB) Diagnostics X PRIZE that would have the potential to save more than 1.6 million lives per year. The TB Diagnostics prize proposal was awarded a grant and is now being developed into an official X PRIZE.”

Here are the guidelines for your YouTube video submissions.

The winning video must answer the following three questions:

1. What is the specific prize idea?

2. What is the Grand Challenge or world-wide problem that you are trying to solve?

3. How will this prize benefit humanity?

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Government Considers X Prizes for Nanotech

Big prizes for technological innovation are becoming all the rage in Washington. Ars Technica tells us that Republican Senator Olympia Snowe of Maine and Democratic Senator Ron Wyden of Oregon have introduced a bill to fund prizes for advancements in nanotechnology. They’re hoping the fund will attract money from private investors as well.

U.S., EU Promote Open Internet Worldwide

Policymakers in both the United States and the European Union are pushing for laws to promote free expression and privacy on the Internet in countries like China. On its Policy Beta blog, the Center for Democracy and Technology, which supports the idea, says Jules Maaten of the EU Parliament and Republican Congressman Chris Smith of New Jersey have gotten together to discuss how they could push their Global Online Freedom Acts.

In Shaky Economy, Net Bartering Grows

With credit markets tight and consumers having less cash to spend, a number of companies are turning to the Internet for a different way to do business-bartering goods and services. The New York Times reports that about 450,000 companies are involved in barter networks, and companies are popping up to handle the transactions. One barter company executive tells the paper that bartering is a good way to conserve cash.

Obama Pushes Cyber Security

The Bush administration hasn’t done enough to combat cyber-espionage and other online crime, Democratic presidential candidate Barack Obama says. In a speech at Purdue University, Obama said he’ll make network security a top priority, and appoint a National Cyber Advisor, according to Wired.

Scientific Society Publication Proposes Debate on Human Role in Global Warming

The editors of Physics and Society, the newsletter of a division of the American Physical Society, want to have a public debate on whether human activities are contributing to global warming, or whether it’s a natural phenomenon—and they are kicking off the debate with the publication of both a pro and a con article in the online publication. One of the editors, Jeffrey Marque, writes that “there is a considerable presence within the scientific community of people who do not agree” with the conclusion that human activity is the most likely cause of warming. [Editor's note: A previous version of this item failed to say that the views of the Physics and Society editors do not necessarily represent those of the American Physical Society, and erroneously implied that the APS itself wanted to foster the debate.]

Economy Darkens Outlook for Home Solar Power

The lack of easily available credit for homeowners could stifle the market for residential solar power systems, an industry expert warns. Earth2Tech reports that David Arfin of solar power company SolarCity (Foster City, CA), says lenders are toughening requirements for loans to install the systems. Without the credit crunch, he says, more systems would likely be installed.

DOE, Dow Collaborate on Ethanol Production Process

Dow Chemical and the National Renewable Energy Laboratory, part of the Department of Energy, are jointly developing a thermochemical process that will convert biomass to ethanol and other chemical products. Green Car Congress says the process will heat biomass to produce gases, which a process from Dow will then convert into various alcohols, including ethanol. The project intends to show whether this can be done on a commercial scale.

Elder Statesmen Warn of “Energy Tsunami”

A long-term energy crisis threatens the security of future generations if some action isn’t taken soon, a bipartisan group of 27 elder statesmen are warning. The Associated Press reports that the group sent an open letter to both presidential candidates and every member of Congress. The letter came from Henry Kissinger, Colin Powell, six other former secretaries of state or defense, as well as former senators and cabinet officers from both parties.

Daily TIPs (technology, innovation, policy) is produced in collaboration with

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A gang of outsiders just arrived in town. Yesterday, at a conference in San Diego, ZS Genetics announced that it is the seventh team to be accepted into the race for the $10 million Archon X Prize for Genomics.

“We have been thinking about this for a while and started talking to the X Prize people maybe three weeks ago,” said ZS Genetics founder and CEO William Glover, when Xconomy interviewed him just before the announcement.

Glover worked as a business consultant and designed radiation safety systems for nuclear power plants before founding ZS Genetics in 2003. The other members of the company’s management team are also outsiders to the biotech industry, with careers in semiconductor manufacturing, telecommunications, and other industries. The North Reading, MA, company’s technology is also strikingly different from the methods used by other entrants.

“We read the sequence by simply taking a picture,” says Glover. The camera in this case is an old workhorse of biological research, a transmission electron microscope. Even though today’s versions of these instruments are capable of capturing very fine details, the components of normal DNA are not directly visible with electron microscopy, due to low contrast and shadowing.

To make the individual letters of the genetic code stand out, ZS Genetics first makes a copy of the DNA, using elements like iodine and boron as labels. The DNA is then stretched out flat on a glass plate, to get rid of shadowing.

The technology is capable of reading sequences of 8000 to 10000 letters of genetic code at a time—far more than competing so called “next generation sequencing” technologies that instead read an enormous number of very short sequences in parallel, and then piece them together afterwards with the help of a massive amount of computing. (One example of such an approach is the technology developed by Helicos BioSciences.)

This difference is what will give ZS Genetics the upper hand in the genomics X Prize competition, Glover says. To win the prize, teams must sequence a hundred human genomes within ten days or at a cost less than $10,000 per genome “We can do this at an extremely low cost. We get very long read lengths, that simplifies the assembly of the DNA sequences enormously, so we can get rid of most of the bioinformatics cost.” Two other New England entrants to the competition, however, are betting on technologies that employ much shorter read lengths: Branford, CT’s 454 Life Sciences, a subsidiary of Roche, and the Personal Genome X-Team (PGx), led by Harvard Medical School’s George Church.

Whether it wins the X Prize or not, ZS Genetics’ team is hoping its approach to faster sequencing will quickly translate into revenue for the startup. “The technology isn’t mature enough today, but we are confident that it will be. We’ll have a showroom and do demos in the third quarter of this year and, plan start commercial sales in early 2009.”

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In the future, your doctor might map your whole genome as a routine diagnostic test. Helicos BioSciences, a five-year-old biotech company in Cambridge, MA, has set out to make that happen in the not-too-distant future—by developing an extremely powerful gene-sequencing technology.

The instrument is the size of a refrigerator. A 3,000-pound refrigerator, built on a steel and granite frame, filled with precision mechanic and optics and advanced electronics, with a list price of $1.35 million. Stan Lapidus, the companhy’s founder and CEO, points to different parts of the machinery—the optical system with its solid-state laser, the plastic tubing that handles the chemicals used in the analysis, the glass flow cell for the samples. With these innards, he says, Helicos’ brand-new DNA sequencing machine is capable of doing what used to take months in just a few days or even hours, and at a fraction of the cost. And all it needs to do the analysis is one single molecule of DNA.

“We hope that this instrument will change the paradigm in life science measurement, which has always been based on measuring many molecules,” says Lapidus. That’s a bold statement, coming from a company that only shipped its first commercial instrument to a customer in March. In a press release about that milestone, Helicos also said that it was a significant step toward the “$1000 genome,” that is, the ability to map one person’s total DNA for a just a thousand bucks. (Spurring the development of such sequencing abilities is also is the aim of the $10 million Archon X Prize for Genomics, which is led by Xconomist Marc Hodosh.) Compare that to the billions of dollars spent when the publicly funded Human Genome Project raced against Craig Venter’s Celera to be first in mapping just one human genome.

At that time, in the late nineties, both teams mainly relied on a technology called Sanger sequencing after its inventor, two-time Nobel laureate Fredrick Sanger. Even today the Sanger method is regarded as the “gold standard” in DNA mapping, against which every other technology is matched. It also shares one attribute with gold—it’s expensive. Sanger sequencing takes a lot of sample preparation involving with methods like molecular cloning and polymerase chain reaction, PCR, and the throughput is relatively slow. So, if you are in a hurry, you will need to spend a lot on instrumentation, chemistry, and people. (In its efforts to beat the Human Genome Project, Celera had 300 automatic gene sequencers and a staff of 500 at its center in Rockville, MD, working for about one year to read three billion letters of genetic code as a first draft of the human genome.)

In contrast, one single Helicos instrument reads 25 to 90 million letters per hour by first chopping up the DNA molecule in very small pieces, and then sequencing many millions of the pieces simultaneously—skipping the DNA-copying steps that earlier techniques required. Afterwards, the information is pieced together by a massive amount of computing.

To demonstrate that its technology really works, Helicos has sequenced the whole genome of a virus from a single DNA molecule. The results were published in Science a couple of weeks ago. But the big expected market is not mapping the genomes of virus, bacteria, plants, or animals. It is in mapping your DNA and mine. Whole genome sequencing might become a major diagnostic method, used to pinpoint significant risks for a number of diseases.

“We now know that many diseases are caused mainly by changes in genetics. Diabetes, stroke, cancer are all diseases of the DNA,” says Lapidus. “It might be that you sequence the whole genome of a person just once and then just look at changes in certain regions. Or maybe you will do the whole genome several times in a person life, we will see.”

Lapidus has a background in diagnosis. He is the founder of two very successful bioscience companies, Cytyc and Exact Sciences. The former was sold to Hologic of Bedford, MA, for more than $6 billion.

Helicos is not alone in trying to develop radically faster and less expensive sequencing methods. The phrase “next generation sequencing” has been coined to describe a number of methods that all, Helicos’s included, use a massively parallel approach. Three competitors, Roche, Illumina, and Applied Biosystems have already sold next-generation sequencing instruments.

Roche got its technology in early 2007, when it bought 454 Systems, which in turn had licensed major parts of its technology from Swedish Biotage. Just a few months earlier, Illumina had acquired Solexa and its technology. Applied Biosystems, ABI, is the market leader when it comes to the classic Sanger sequencing method, but has also developed a next-generation sequencing technology of its own called Solid. At the moment it is unclear if one of these companies will dominate the market or if their technologies will coexist in different niches.

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A local group has finally thrown its hat into the ring for the $10 million Archon X Prize for Genomics, and it’s a biggie: the newly minted Personal Genome X-Team (PGx), led by genomics pioneer George Church.

Church, a Harvard Medical School professor of genetics and co-founder of companies including Cambridge, MA’s Codon Devices and Silicon Valley’s LS9, was one of the main instigators of the Human Genome Project. That project produced one sequence of the DNA of an anonymous person. But Church has been an important advocate for the idea that we all should have access to our individual genomes, and that personal, non-anonymous genome sequencing should be a quick, affordable part of research, healthcare, and our lives. For the last few years, he and his team have been pursuing that vision through what he calls the Personal Genome Project (PGP) , an effort to develop new sequencing technologies, new IT tools for interpreting genomic data, and a solid framework for considering the ethical, legal, and social issues surrounding genomics.

In a sense, the creation of the Personal Genome X-Team marks an intersection of what have been up until now parallel efforts to spur the development of personal genomics—the PGP and the Archon X Prize. The X Prize Foundation launched the its genomics competition in October, 2006, offering $10 million to the first team to sequence 100 human genomes within 10 days for less than $10,000 per genome. By way of context, the last sequencing milestone was Branford, CT-based 454’s decoding of double-helix co-discoverer James Watson’s DNA this summer. It took a few months and a million dollars.

454 is one of the half-dozen entrants in the X Prize competition, and until now it was the closest thing the Boston area had to having a local pony in the race. I asked Xconomist Marc Hodosh, who took the reins of the competition in March, whether it was surprising that more of the area’s many genomics players hadn’t signed up. “All I can say is we’re talking to a number of people and it’s very likely you’ll see more teams in the future,” he said. “George is obviously a significant figure in our industry, and it’s an extreme pleasure to have him competing for the prize.”

For his part, Church (also an Xconomist) says via e-mail that “We are motivated to help the X Prize get some people engaged and educated earlier than otherwise would have happened. Also some corporate sponsors are more interested in the PGx than PGP and vice-versa.” Church explains that while the Personal Genome X-Team and the Personal Genome Project have an overlapping teams and a shared technical infrastructure, the two efforts have slightly different goals. PGP will aim to sequence about one percent of the DNA of each of 100,000 people (starting with 10 prominent volunteers who include Church himself and legendary venture capitalist Esther Dyson). To win the X Prize, PGx will have to sequence 98 percent of each of 100 genomes provided by the X Prize Foundation. Church says that the team will probably start with a practice run on 100 of its own volunteers. The team that takes the prize (hopefully PGx, Church says) will also have the opportunity to sequence the genomes of 100 celebrities–the likes of Richard Branson, Larry Page, and Paul Allen–who Hodosh hopes will become Lance Armstrong-like advocates for personalized medicine.

Entrants in the X Prize competition will have two window for competing each year, Hodosh says—once in January and once in July. “No attempt is likely for at least a year and a half,” he says.

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The Segway Personal Transporter was perched just inside the Starbucks door at the Kendall Square Marriott. Truth be told, I didn’t notice it going in, but I pretty much had to going out, because the person I’d just spent the last hour with unlocked the transporter, wheeled it outside, then tooled down the street beside me (I was on foot) before we said our adieus.

That person was Marc Hodosh, one of the more intriguing young innovators in the Boston environs. People who tote dirty clothes to the laundry a little more easily, enjoy a colder drink at the beach, or feel a bit more confident about the fight against terror, might owe Hodosh a small word of thanks. More on his unorthodox path to success—he dropped out of med school to pursue life as a serial entrepreneur—in a bit. In March, though, Hodosh was named senior director of the Archon X Prize for Genomics. This is the genomics equivalent of the original Ansari X Prize for private spaceflight, won by Microsoft co-founder Paul Allen and aerospace designer Burt Rutan. Basically, Hodosh’s job is to help give away $10 million to the first team that can sequence the genomes of 100 people in 10 days for less than $10,000 per genome. “This will undoubtedly revolutionize medicine if we’re successful in this challenge,” Hodosh predicts.

Hodosh is all of 34. He came to Boston in 1995 to attend medical school at Boston University. But somewhere between anatomy and the ER he got sidetracked by students carting around big laundry bags. He got the idea for a laundry backpack called Hoosh, for Hands Free One and Only Super Huge backpack, that even sported a detergent compartment. He successfully worked a deal to offer them through Bed Bath & Beyond, before eventually deciding to let the business fade away.

But his entrepreneurial fire was ignited. After just one year of med school, “I said ‘Forget medicine,’” Hodosh recalls. Next up: soft-sided coolers outfitted with Hodosh’s patented, insulated, collapsible beverage holders. Hodosh formed a company called Glacier Extreme to make his coolers, which he sold through Toys R Us and other retailers. Things went well enough that in 1999 he sold out to California Innovations, a major cooler maker.

Hodosh is telling me all this while working on a frappuccino, followed by a white hot chocolate. He almost sheepishly points out that his early business success was in low-tech. But, the young entrepreneur says, he’s always been fascinated by high technology. He next joined Viisage, a Massachusetts face recognition company (now part of Stamford, CT-based L-1 Identity Solutions) aimed in large part at preventing terrorism, as head of business development. Then he and a colleague formed their own face recognition startup, ID One, patenting an algorithm that improved recognition by correcting for shading and facial angle variances. In the fall of 2005, they sold ID One to a still-unnamed company for a still-undisclosed amount. “Nothing that I’m retiring off of,” says Hodosh.

But it was enough to take some time off, and, I’m guessing, indulge his Segway habit. Hodosh met Dean Kamen, inventor of the Segway. while he was still at ID One, taking the lead in forming the Boston chapter of the FIRST Robotics Competition, Kamen’s now-global robotics contest for high school students. (If you’ve never seen a FIRST event, imagine World Wrestling Federation meets “Freaks and Geeks“—with heart-thumping rock music, a flamboyant emcee, screaming crowds, and robots competing in a variety of tasks.)

Robots, it turns out, were Hodosh’s pathway to genomics. He met an X Prize exec at the FIRST championships in Atlanta in 2006, while he was still working with Kamen as a consultant. But this March, after about a year with Kamen, he signed on to lead the genomics prize. He had no experience with genomics, he admits, but that wasn’t necessary. “They hired me as an entrepreneur,” he says. “What they needed was an entrepreneur who could take something that’s uncharted in a sense and make it happen. And those are the types of things I’m attracted to, things that haven’t been done before.”

Kamen, by the way, says the X Prize people made a great choice. “He’s a great guy,” the Segway inventor says. “He’s a man with a really good nose for technology…Half the time people are solving the wrong problem. So even if they solve it, so what? I think he’s worried about, ‘Are they solving the right problems?’”

The X Prize Foundation is headquartered in Santa Monica, CA. The foundation folks tried to get him to move out west, Hodosh says, but he declined. “The truth is Boston is an excellent place to be running the genomics prize. We’re the biotech hub of the country.” Still, he spends one week a month at the headquarters, where he has a small staff, and another week each month on the road. When he’s in town, Hodosh works out of an office in his Brookline condo, Segwaying to and from meetings when possible (he swears by the transporter’s efficacy, even in winter).

The genomics X Prize was named on behalf of its benefactor, mining multimillionaire Stewart Blusson, president of Archon Minerals of Canada. Hodosh’s job is to promote the prize, recruit and inspire teams to enter the competition, and evangelize about the promise of personalized medicine.

He’s pretty good at that already. The first sequencing of a human genome cost many millions and took years to accomplish, Hodash notes. Despite a lot of progress since then, it still costs at least $1 million and takes many months per person—not even close to what’s needed. “This has to be affordable enough and rapid enough so that individuals will be able to get their genomes sequenced, so that we can bring in this era of personalized medicine, so that we’re more proactive instead of reactive,” Hodosh says.

Accomplishing such a feat will benefit both individuals and whole populations of patients, he asserts. Say, for instance, that it becomes possible to cost-effectively sequence the genomes of 1,000 Parkinson’s patients or Alzheimer’s patients—enough to enable comparisons of the populations. This could yield tremendous insights into the causes of the diseases and their possible treatments. Perhaps even more important, genetic sequencing could bring vast improvements in preventative care, by helping people to understand what they’re at risk for, then craft strategies to minimize that risk.

So far, four teams have registered for the prize. Hodosh expects to draw more entries from around the world, but he doesn’t expect an onslaught of applicants. “It’s not a huge field. You’re not going to see hundreds of teams,” he says.

As an added bonus, the winner will get to sequence the genomes of 100 X Prize posterchildren—people like Stephen Hawking (Lou Gehrig’s disease), Larry King (heart disease), Michael Milken (prostate cancer), and Larry Page of Google fame (too much money?)—who want to help advance medical understanding. Sometime next year, the foundation will launch a major public awareness campaign to promote the prize and raise awareness of the promise of genomics.

Hodosh doesn’t expect to wait too long for the prize to be claimed. “I think it will be three to five years,” he says. If it happens sooner, that’s great too. “I like not knowing what I’m doing a few years from now.”

Chances are, though, he knows how he’ll get there: his Segway.

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