A week ago, InnoCentive announced the aquisition of OmniCompete, another innovation-contest platform. To my knowledge, it’s the first acquisition of one contest-platform by another (correct me if I’m wrong). In the blog post that announced this strategic move, InnoCentive’s and OmniCompete’s CEOs explain the rationale for this merger, but I think that this type of operation also implies interesting challenges concerning platform- and community-management.

• What is OmniCompete?

As its website says, the idea behind OmniCompete was born in 2005 in London, where its founders completed an MBA. They recognized early that “competitions can solve global problems by drawing out a multitude of innovative solutions to one specific problem“, and their first challenge is also the one that got them most notoriety: the Global Security Challenge. With this challenge, the London-based company allowed the US Government to access the technological creativity of innovative security start-ups and SME’s. An independent case study states that the Global Security Challenge gets around 200 submissions annually, and that the majority of applicants are new to the funding sponsor, the US Department of Defense. The 2011 edition of the challenge was the 6th one, and OmniCompete executed 20+ challenges overall.

So basically, OmniCompete is exactly like InnoCentive: a contest-platform for technological innovation. Their competitions seem to target companies more than individuals, and that might be a reason for this acquisition.

We need to reach more Solvers (Simon Schneider, CEO of OmniCompete)

• Why did Innocentive acquire OmniCompete?

According to Dwayne Spradlin, OmniCompete has been “aggressively expanding their name and presence in Grand Challenges and building their business in the United States and Europe“. Simon Schneider’s answer to the question is a little more insightful 😉 because he clearly says how complementary both companies are: “we’re very good at these front-end services: custom consulting, design, marketing and branding, but we need to reach more Solvers. This is where InnoCentive excels“. It almost sound like the merger is a gift for OmniCompete, but it’s InnoCentive who pulled out the money! Why?

InnoCentive says it plans to adds OmniComplete’s experience in big-ticket competitions to InnoCentive’s so-called Grand Challenges, contests with larger payouts (Press Release)

InnoCentive’s COE says that this acquisition “is the next step in bringing a world class capability into our product portfolio“. InnoCentive’s customers will have access to enhanced services in order to, eventually, run bigger challenges of the platform, thus spending more money! In a maturing industry of innovation intermediaries, aquisitions might be the next step to achieve growth indeed. Spradlin even foresees further acquisitions: “a number of organizations could fill out critical areas in (…) the delivery of open innovation.  We are always looking for opportunities“. Aha!

• How do you merge two communities?

But what is behind merging communities? In the blog post announcing the merger, Spradlin says that InnoCentive members will see no change, just more challenges to participate in. “Solvers can work on them the way they’ve worked on any other InnoCentive Challenge“, he says. It’s more interesting to have a look at OmniCompete’s solver population! How will they react? Will they start using InnoCentive like they used OmniCompete? How different are their expectations?

We keep in close contact with our Solvers, particularly with previous finalists and winners, and will continue to do so (Simon Schneider)

Schneider seems optimist about this transition. Since it’s more about merging corporate competencies than solver populations (remember, Schneider says “we need to reach more Solvers“), he’s probably right. But still, there are uncertainties. Will OmniCompete’s solvers make the transition? Will they be satisfied with the InnoCentive user experience? On the othr side of the platform: will InnoCentive’s clients value the new services? Will they really purchase more Grand Challenges thanks to these enhanced delivery capabilities?

The first steps of the transition have started. InnoCentive’s last blog post announced a new challenge… hosted on OmniCompete: “In the coming months, we’ll be integrating OmniCompete Challenges and processes into the InnoCentive web site.  For now, you’ll need to visit the Challenge landing page and complete a new registration to work on this Challenge“. This challenge is the Morph My City Challenge, sponsored by a Canadian City. One of OmniCompete’s clients.