Confronted with an increasing diversity of social and global challenges, innovation competitions become an increasingly important tool to spur innovation amongst entrepreneurs.

Based on a case study on three finalists of the Wendy Schmidt Oil Clean-Up XChallenge, this thesis aims to investigate what factors motivate entrepreneurs to take part in an innovation competition. Due to the fact that four years after the closure of the challenge nine out of ten finalists were still actively in the oil clean-up business, the authors further investigate on what the main motivational factors for continuing business after participation in an innovation competition are.

Data was collected via in-depth interviews and analysed by applying the model of entrepreneurial motivation by Naffiziger, Hornsby and Kuratko (1994) as well as Gimeno, Folta, Cooper and Woo’s (1997) threshold model. Further, the authors conducted a case study on the finalists of the Wendy Schmidt Oil Clean-Up XChallenge, which was an innovation competition, initiated by the XPrize Foundation in 2010. The competition was a reaction to the BP oil spill disaster in the Gulf of Mexico in April 2010 and aimed for finding better and more efficient oil clean-up solutions. Ten finalists were selected to test their inventions at one of the world’s largest testing facilities for oil spill clean-up technology.

The findings suggest that the motivators for participation in an innovation competition include a desire for increased publicity and reputation, as well as the opportunity to test the technology. It was also found that factors such as the goal of the organisation and the perception of one’s product and business idea play key roles in the decision to participate in an innovation competition. Furthermore, the research shows that the business environment and a need for achievement influence the decision to partake.

With regards to the motivational factors that encourage sustained entrepreneurship after participating in an innovation competition, it was found that the correlation between expectations, both regarding the outcome and the implementation process, upon entering the competition and the actual outcome, does not have a large impact upon whether operations are continued after the innovation competition has ended. Instead, it was found that the main motives for continuing operations are a strong psychic attachment to the business, as well as high costs of switching to another area of commerce.