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Hawaii’s Hi-TechSummit 2001

Workshop on Promoting Business Development in Technology

Ken Dozier

NASA Far West RTTC

9/12/01

Presentation

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“When the Rate of Change Outside is Greater Than the Rate of Change Inside, The End Is In Sight”

Jack Welch, Chairmen General Electric

The Future

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“ According to Silicon Valley CEO’s, 60 % of the high-tech items they manufacture today did not exist 10 months ago”

Lon Hatamiya, Secretary - California Trade and Commerce Agency

Velocity

“Startups are now expected to go public within 6-18 months after venture investment”

Donna Jensen, Founder and CEO of startups.com

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1st Perspective

• Knowledge is a New Kind of Asset– The foundation of industrialized economy is shifting from natural

resources to intellectual assets (Hansen 99) (Davis 98)

– Knowledge assets are viewed as factors of production that may be more important than traditional resources of capital, labor and land. (Davis 98)

– Converging technologies and rapid innovations can transform markets Overnight . Administrative systems no longer provide the underpinnings of value creation. (Teece 98)

– Reward goes to those who are good a sensing and seizing opportunities. Dynamic capabilities are most likely to be resident in firms that are highly entrepreneurial. (Teece 98)

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Global Competition

Source: The world Competitiveness Yearbook IMD International

• 3 Finland

• 4 Luxembourg

•5 Netherlands

•6 Hong Kong

•7 Ireland

•8 Sweden

•9 Canada

•10 Switzerland

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What is Knowledge ?

Truth Knowledge Belief

Universal

No Debate

Effect

Social

Converge on debate

Cause

Personal

Diverge on debate

Cause

10 Philosophical Mistakes (Adler 85)

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“where ... The ENIAC is equipped with 18,000 vacuum tubes and weighs 30 tons,computer in the the future may have only 1,000 vacuum tubes and weigh only 1.5 tons”

- Popular Mechanics, 1949

“I predict the internet... Will go spectacularly supernova and in 1996 catastrophically collapse ”

- Bob Metcalfe, 3COM founder and inventor, 1995

“This ‘Telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us”

- Western Union, Internal memo, 1876

“The problem with television is that the peoplemust sit and keep their eyes glued on a screen; The average American family hasn’t time for it”

- New York Times, 1949

“There is no reason anyone would want a computer in their home”

- Ken Olson, president andfounder, Digital Equipment Corp., 1977

“Man will never reach the moon, regardless of all future scientific advances”Lee De Forest, Radio Pioneer, 1957

The Future

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Business Taxonomy

• Knowledge Taxonomies (Teece 98)– Tacit (Social) / Codified (Explicit)

– Observable[product] / Not Observable[process]

– Positive (Failures)/ Negative (Successes)

– Autonomous (Stand Alone)/ Systematic (Part of a System)

– Protected (Patent, TM, CW) /Not Protected (Trade Secret)

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Industry Clusters (ERI/McGraw Hill,”America’s Clusters”,1995)

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1940

-196

5

1965

-199

0

1990

-201

5Motion Pictures

AviationElectronics

Defense Aviation

AutomobileManufacturing

FoodProcessing

Agriculture

Theme Parks

Motion Pictures

Television

ComputerPeripherals

Defense Instruments

Commercial Aviation

MetalProducts

GeneralManufacturing

InformationProcessing

DefenseAerospace

Theme Parks/Tourism

Visual Media Production

Professional Services

Multimedia Technology

Engineering Services

Technology-Based

Manufacturing

General Manufacturing

Information Processing

Business Services

The Evolution of Industry (ERI/McGraw Hill,”America’s Clusters”,1995)

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2nd Perspective• Entrepreneurship Super Normal Wealth Creator

– Business Environments Have Become Hypercompetitive because of the High Magnitude and Velocity of Interfirm Rivalries (D’Aveni, 94)

– Innovations in Products, Services, Business Processes, and Organizational Designs are Creating Dramatic Discontinuities in Product- Market Spaces and Disrupting the Traditional Approaches to Competitive Strategies and Business Conduct (Christensen, 97)

– In the Short Run, Entrepreneurial Firms Reaps Supernormal Returns (Create Wealth) as Established Incumbents and Rivals Seek to Understand the Competitive Disruptions in their Market Space.(Christensen 97)

– Thus Competition Occurs in the Form of a Series of Market Disruption Moves by New Entrants or Entrepreneurial Firms and Efforts by Incumbents and Rivals to Shape Their Response Actions (Young et al 96)

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Make & Sell vs Sense & Respond

Incubators and Science Parks created to bridge gap between development and commercialization

Chart Source: Corporate Information Systems, Applegate

Venture: Niche markets,

public trading (pull)

Federal Agencies, SBIR: Mission Based, Linear (push) Universities: Curiosity Based, emerging, (push)

Chabol (large companies) hierarchy, products based, (push)

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Traditional Entrepreneurship

Typical Waterfall modelSix Stages

basic research, development research, product and process ideas, prototype, production, diffusion

Sung

CriticismsToo much focus on the solution “push” basic research not the only initiator stagerelationship between research and commercialization is too complex to be linearUsers are the key “pull” to the problems and markets

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New Non-Linear Model

2001 study of startup companies across: Software telecom (35%), Bio-med (19%), Computers (16%), and Semi-conductors (10.8%) Most innovation at application stage (55%), development ( 22%), research (12%) production (9%)Age: Linear older ( 35-45), non linear (25-35)Education: Linear more (28%P,42%M,30%B), Non Linear (7.5%P, 22%M,67%B)Experience: Linear narrower (59% research, 35% commerce), Nonlinear (37% research, 29% commerce, 17% education)Both groups agreed on success factors: business plan, leadership, technical skills, management skills, and location

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DevelopersDrivers

Gates “Microsoft” XeroxJobs “Apple” XeroxClark “SGI” E&S, StanfordClark “Netscape” University of

Illinois

The Non-Linear

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Market Redefinition:Radical Change

Seven Organizational Change Propositions, Venkatraman 1994

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RTTC Focus:Discovery

Zmud 2001

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3rd Perspective

• Entrepreneurial Firms Represent a New Online Community• Network computing, supported by advanced communications infrastructure, can

facilitate collaborative entrepreneuralism (Teece 98)• Successful business models set themselves apart in their communication design

leading to a deconstruction of traditional value chains and the emergence of value Webs. (Lechner 01)

• The most critical factor for a venture business success is how to implement and commercialize lab-based technology/knowledge/ideas into actual products and/or services (Sung 01)

• Entrepreneurial firms use knowledge to reshape clusters of assets in distinctive and unique combinations to serve ever changing customer needs. (Teece 98)

• The key sources of wealth creation at the dawn of the new millennium will lie with new enterprise formation. (Teece 98)

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Online Community

Subscribers

Netiquette

Self Organized

Non-Commercial Culture

Community = Set of Agents + MediumAgents = user groupsMedium = Internet

Communities - Business Models and System Architectures:The Blueprint of MP3.com, Napster and Gnutella Revisited, Lechner

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Components of a Medium

Knowledge

Intention

Communities - Business Models and System Architectures:The Blueprint of MP3.com, Napster and Gnutella Revisited, Lechner

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Evidence from Practice

• Secondary Market Research as practiced by expert communities may be not be producing market knowledge fast enough or broad enough for modern high velocity markets– Market analysis of existing markets was not encouraging

• A KMS that uses IT to gather primary market information rapidly, facilitates the complex transformation between basic research (IP) and commercialization (Wealth)– Online research for potential markets has changed the lens– MOB/WOB community is rich with profitable SMEs

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PROBLEM ADDRESSED separation of auditory inputs by simulation of different source locations

TECHNICAL APPROACH

(1) use of synthetic auditory head related transfer function (HRTF) to simulate different virtual spatial source locations for up to five auditory signals;

(2) analog-to-digital conversion for noise-free processing with HRTF, and subsequent digital-to-analog conversion for presentation of modified signals to right and left ears

POTENTIAL APPLICATIONS teleconferencing, aeronautical communications, virtual reality video games, command and control

BENEFITS (1) binaural hearing advantages: substantial improvement (6-8 dB)in signal to noise; faster reaction times, less listening fatigue, increased perception and immersion; (2) less expensive than general purpose 3D audio displays; (3) customizable; (4) user-friendly, not requiring computer interface

MULTI-CHANNEL SPATIALIZATION SYSTEM FOR AUDIO SIGNALSU.S. patent 5,438,623 (August 1, 1995)

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Secondary Market Research: MAP

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The Radar

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CAP Tools (Explicit)

In the CAP, say you need to build a Technology StatusReport.

Clicking on the link, brings up more information about what is a Technology Status Report (TSR), including an example.

Clicking on the details button reveals more information about the TSR.

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Market Research Repository

You can sort or filter you selection

Each technology list the available primary

marker research we have done.

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Market Wanted Innovations

• Real time

• General Solution (360 sphere)

• Low Cost

• Head Orientation Sensitive

• Set Top Box

• Sound Card Add in

• Listener Location Independence

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INC. Magazine May 1999

• Michael Porter - Harvard University just formed ICIC (Institute for a Competitive Inner City) Recently completed a 5 year study of 100 inner city growth companies:

– 46% compound annual growth rate – Generated on average 50 jobs/year per

company for five years – Annual hourly wage $13/hour

high wage jobs at $26/hr

• Ride the Information Technology and Telecommunications wave

• Location, Location, Location

Images courtesy of INC. magazine

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MOB/WOB Firm

• Breakaway

– On going profitable south central MOB IT Service Business

– Strong Private and Public Network

– No Products

– Access to Capital Financing

• Far West

– Assisted with Business Plan

– We located Physicist

– Located Chip Designers

– Located Short Run Factory for prototype chips

– Located an Incubator

– Assisting with SBIR and STTR to ensure dual use

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Leveraging Existing Network

Breakaway will take lead on SBIR Phase I and Phase II (hopefully) Far West RTTC will support

USC School of Engineering will support STTR work.

Large Chip manufacturer is monitoring process

Large Set Top Box manufacturer is monitoring process

VC is monitoring process

Investment Bank is monitoring process

DoD is monitoring process

Time to Market 24 to 36 months