Peter Diamandis believes that ideas need to do two things: be crazy, and know one another – you know, in a Biblical sense. Matt Ridley perhaps said it most provocatively in his book The Rational Optimist when he wrote that it’s vital for ideas to have sex. This is the sweet spot that true innovation calls home: someone has an idea or a problem, they share it with somebody else, and it gets built upon and made stronger with every new perspective that touches it.

Diamandis is the subject of Julian Guthrie’s brand-new book How to Make a Spaceship, and the chairman and CEO of the X PRIZE Foundation, a non-profit organization that creates public incentivized competitions that aim to accelerate technological breakthroughs for the benefit of humanity (the best known of which so far has been the Ansari X Prize for private space flight). So he knows a thing or two about driving innovation.

His thesis in the video above is a line that American aerospace engineer Burt Rutan once told him: the day before something is truly a breakthrough it’s a crazy idea. A company or a creative individual can find success in stability, but to really make an impact, leaps of innovation and rapid experimentation are required. And to get there, your craziest ideas need to see the light of day – even if they fail. Shoot for the moon, he says.

Diamandis outlines three tools to promote this kind of radical innovation. The first is to engage a sense of competition. When faced with a barrier that needs breaking, X PRIZE doesn’t offer a large sum of money and unlimited time to one team of geniuses to solve it. X PRIZE opens the floor to hundreds or even thousands of teams to compete for the solution, then it awards just one winner. Most of us know the phrase ‘think outside the box,’ but in Diamandis’ view it’s really more about shrinking the box down by applying constraints on time and resources, thereby forcing creative thinking.

The second is to create a very clear goal, then break the chain of command by crowdsourcing for ideas. What’s better than one senior company member’s big idea? One hundred of them, from all walks of life. Toy manufacturer LEGO has an open ideas platform where users can contribute new product and design ideas and gather votes to see them become a reality. Mashable has a round up of three case studies to look at here. Websites like GenuisRocket and Innocentive are worth a look.

The third tool involves turning your own internal cogs: Diamandis recommends reading as a fire-starter for innovative, far-out ideas. The Spirit of St. Louis, is what gave Diamandis the idea for the XPRIZE Foundation. Robert Heinlein’s The Man Who Sold the Moon gave him the idea for planetary resources and Google Lunar XPRIZE. It’s really another incarnation of ideas moving up against other ideas to create a spark. What is one flint-stone on its own? Nothing. But a flint-stone and a piece of steel? Now you’ve got fire.

Peter Diamandis is the subject of How to Make a Spaceship: A Band Of Renegades, An Epic Race, And The Birth Of Private Spaceflight.