The archive · Business Models · Strategic decision · 2000
Goldcorp 2000: a struggling miner puts its drill data online — the crowd finds the gold
Rob McEwen shares his mine's geological data with the world, offering $575,000 in prizes — outsiders find 110+ sites, 80% hit ore, and Goldcorp stops struggling
Goldcorp Inc.
What it had to solve
By 2000 Goldcorp's Red Lake mine in northwest Ontario was a struggling operation: its own geologists were not finding enough ore to keep the company among profitable producers. The mining industry's instinct was to guard drill data as its most valuable secret — the more proprietary, the better.
How it works
In 2000 gold exploration was secrecy business: drilling data was a company's crown jewel, held close because the first firm to read the rocks correctly got the deposit. Goldcorp, a Vancouver-based miner, was the exception for the worst reason — its Red Lake mine in northwest Ontario was struggling, and the in-house geologists were not finding enough new ore to keep the company among the profitable.
Founder Rob McEwen decided to invert the industry's logic. In 2000 he launched the Goldcorp Challenge: the company's geological data would be shared with the public, and $575,000 in prizes offered to anyone who could help locate the next six million ounces of gold at Red Lake. MIT Sloan Management Review later described how Goldcorp went further, giving outsiders both the data and the software to develop new approaches to finding gold in its northwest Ontario mines.
The results read like a gift to open-innovation theory: more than 110 sites were identified, and more than 80 percent of them yielded significant gold reserves. For a company that had been unable to find its own next deposit, the crowd performed at a level that redefined what the asset was worth — and the challenge helped turn Goldcorp from a struggling enterprise into one of the most profitable companies in the industry.
Why it lands
- Risk shifted to the crowd: prize money was paid only on results, so every miss cost nothing, while a single hit could repay the entire pot many times over.
- Secrecy was the industry default, so sharing was itself the moat: competitors could not copy the move without surrendering their own proprietary drill data first.
- It multiplied perspectives without multiplying payroll — thousands of researchers with no mining-industry assumptions read the same rocks in ways the in-house team would never have tried.
- The goal was concrete and measurable — the next six million ounces — so submissions were aimed at a target rather than scattered across vague territory.
What it did
The crowd identified more than 110 sites, and more than 80 percent of them yielded significant gold reserves — an exceptional hit rate for exploration. Wikipedia's account credits the challenge with turning the company from a struggling enterprise into one of the most profitable in its industry.
What you can take
When your own experts are blind, publish the data the problem lives in; a prize paid on results makes the misses free, and a crowd with no industry habits outperforms the industry's habits.
Since then
The 80-percent hit rate is the number the case is remembered by. Goldcorp moved from struggling to among the industry's most profitable producers, and the challenge entered management literature as a canonical example of opening up the idea-generation process — MIT Sloan cited it alongside GE's Ecomagination Challenge among the new open-innovation playbook. The company later became the target of the sector's biggest consolidation: on 14 January 2019 it agreed to be acquired by Newmont, forming the world's largest gold producer, renamed Newmont in 2020.
Sources
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