Culture for InnovationCulture for Innovation

Thomas LynchThomas LynchCEO/founder Reasoning TechnologyCEO/founder Reasoning TechnologyPresented at NTUPresented at NTU2013-12-202013-12-20Thomas.Lynch@reasoningtechnology.comThomas.Lynch@reasoningtechnology.comwww.thomaswlynch.comwww.thomaswlynch.com

background video from: https://goo.gl/Rejg6OCosmic voyage - the power of ten

Innovation In AsiaInnovation In Asia

Thomas LynchThomas LynchCEO/founder Reasoning TechnologyCEO/founder Reasoning TechnologyPresented at NTUPresented at NTU2013-12-202013-12-20Thomas.Lynch@reasoningtechnology.comThomas.Lynch@reasoningtechnology.comwww.thomaswlynch.comwww.thomaswlynch.com

About Mr. Lynch● Participated in the design of a dozen Participated in the design of a dozen

microprocessors variously as individual microprocessors variously as individual designer, tools developer, manager, and designer, tools developer, manager, and architect, [ including the Am29000 (test), architect, [ including the Am29000 (test), 29050 (12 instructions, fp support), Sonic 29050 (12 instructions, fp support), Sonic (clock and smart card interface), Am187 (clock and smart card interface), Am187 (device library analysis), Am486, K5 (t-func (device library analysis), Am486, K5 (t-func develop, tech management), K6 (fp test develop, tech management), K6 (fp test platform), K7 (fp and tech management), a platform), K7 (fp and tech management), a PIC variation, Neptune, Chromatic FP, PIC variation, Neptune, Chromatic FP, Quicksilver radio node (entire processor Quicksilver radio node (entire processor architecture, logic design, and tools) ]. architecture, logic design, and tools) ].

About Mr. Lynch● I've had a consulting practice since 1996 I've had a consulting practice since 1996

where I have worked with the startups where I have worked with the startups Quicksilver Technologies and NetEffect. Quicksilver Technologies and NetEffect. Developed microcode for Chromatic Developed microcode for Chromatic Computers. Created intellectual property for Computers. Created intellectual property for startups and for Intellectual Ventures. startups and for Intellectual Ventures. Created business plans including for Enreagle Created business plans including for Enreagle and 21st Century Telephone. I proposed and 21st Century Telephone. I proposed smart phone technology in the 90s, and smart phone technology in the 90s, and social media technology in the early 2000s.social media technology in the early 2000s.

About Mr. Lynch● 29 issued patents in the U.S. with a 29 issued patents in the U.S. with a

number of related international filings, number of related international filings, and a similar number of active and a similar number of active applications. These area of: computer applications. These area of: computer security; digital rights management; security; digital rights management; social media (relationship rings); high social media (relationship rings); high performance computing architecture, performance computing architecture, logic, circuits, and packaging; user logic, circuits, and packaging; user interface, and telecommunications.interface, and telecommunications.

Current Projects● Reasoning Technology – a new intuitive Reasoning Technology – a new intuitive

way to apply theorem proving to way to apply theorem proving to arguments in law.arguments in law.

● New Memory Architecture -New Memory Architecture -● Implications to databases (developing Implications to databases (developing

db)db)● Implications to processor architectureImplications to processor architecture

● Computer SecurityComputer Security● A better way to limit viruses and other A better way to limit viruses and other

OS security threatsOS security threats

● New Media Compression AlgorithmNew Media Compression Algorithm

● New Discrete Optimization AlgorithmNew Discrete Optimization Algorithm

What Is Innovation?What Is Innovation?

InventionInvention

IngenuityIngenuity

CreativityCreativity

An innovation is simply something new and not seen before.

A good innovation is something that improves people's lives or pleases them.

We are going to talk about profitable innovations, i.e. those make the innovator money.

Companies which survive in the fashion industry innovate profitably most every season.

Famous artists of all ilks are often known by their innovations.

Innovations are rare in religions and the practice of ancient arts.

In this talk we focus on innovations that affect the profitability of technology companies.

Tech Sector InnovationBusiness Processes (Productivity)

Manufacturing

Product Design

Product Attractiveness

Product Ordering and Distribution

Where Art/Fashion Fits In

Making the product and/or packaging appear more attractive or pleasing to the buyer.

In simulating the company's vision for the future (capturing the dream for everyone to see).

In marketing communications, including website design and advertising material.

The Magnitude of InnovationDisruptive Innovation – creates new a new market typically one which displace old ones.

Surprising Innovation – takes competitors by surprise, captures most of the existing market, may be so interesting as to expands the existing market.

Sustaining Innovation – makes a company more competitive while leaving the distribution structure and market in tact.

Why We InnovateWhy We Innovate

Market ShareMarket Share

ProductivityProductivity

New MarketsNew Markets

Buckminster Fuller:

'Technology enables us to have more with less.'

Roger's 'Diffusion of Ideas'

0

revenue

First to MarketEveryone Else

Disruptive Innovators are First To Marketmake the most money the earliestdefine the product under its company namecreates the brandsestablishes the intellectual property

(others must license)

Disruptive Innovators Rule!

revenue

Disruptive InnovatorSustaining Innovator

Price and Margins (commodity) Player

total revenue drops asprice falls through floorand/or customers finda new product/version

time

Disruptive Innovation Companies Typically Don't emphasize on Keeping Costs Minimum, but rather they emphasize getting a product out.

Sustaining Innovation Companies are Typically Very Good at Making Improvements At Somewhat Lower Cost

Commodity Companies Have Very Low Costs and Margins. Features will be Old Hat. If the Revenue curve levels off then these companies make revenue for a long time

Continuous Surprising Innovation

time

revenue

Continuous Surprising Innovation Carries Customers to Better New Models

Requires a Vision with a Technology Road Map that remains confidential, or that the competition cannot follow along.

Sustaining Innovator Can turn into a Surprising Innovator, mitigated by intellectual property.

What We Should Invent

Things that make profit

Things that replace expensive imports (not inexpensive ones)

Of apples and shirts ..

About Innovators and StartupsAbout Innovators and Startups

RiskRisk

WorkWork

PayoffPayoff

Would You Hire This Person For Your Startup?As a young boy his teacher said he was:

“too stupid to learn anything.”

As a teenager he burned down the family barn. He was publicly whipped for it. He would later start a fire on a train. He said both were accidents.

He was dismissed from his first two jobs for being unproductive.

He often failed and admitted it. [http://www.cbsnews.com/pictures/celebs-who-went-from-failures-to-success-stories/6/ misc.]

Thomas Edison:

“I haven't failed. I've just found 10,000 ways that won't work.”

Carl Bass CEO Autodesk:

“Innovation is about taking risks and breaking the rules.”

Steve Jobs CEO Apple:

“People who are crazy enough to think they can change the world are the ones who do.”

Fact:

One of our ten startups succeed.

Chad Oliver:

“In any aborigine group there will be a headman. The group will typicallyPeriodically meet and form a circle to discussion issues. However, there will invariably Be one guy who sits to the side doing something else. The rules just don't apply to him.”

Charles Goodyear

Sold the furniture from his house and put his family in boarding so that he could work on vulcanizing rubber in a laboratory in an attic for five years. One of his children became sick and died, perhaps as a result.

Traits of Innovators– Work on things they think are interesting or deem

important while being oblivious to everything else.● Ignore rules● Ignore risks● Go without pay● Incredibly persistent

– Fail often.

– Well educated if for no other reason then constantly working and researching.

– Are creative.

The Culture of Innovators is a Frontier Culture

Frontier People accompany strangers toa place they have never been and workwith others, without pay, to build a legacybecause they care about their families andfriends.

Working Class ValuesWorking Class Values

God JobGod Job

Avoid RisksAvoid Risks

Family FirstFamily First

Educated for Working in the FactoryEducated for Working in the Factory– School looks like factory with students lined upSchool looks like factory with students lined up

in nice patterns and teacher inserting parts.in nice patterns and teacher inserting parts.

– Emphasis on Following the Rules and ConformingEmphasis on Following the Rules and Conforming(as all machine parts must)(as all machine parts must)

– Teacher as Authority FigureTeacher as Authority Figure

– Students disciplined for not staying on curriculumStudents disciplined for not staying on curriculum

(not to be confused with Confucian system of(not to be confused with Confucian system ofcivil service exams)civil service exams)

When I was in second grade, I invented a new way tosubtract numbers. Instead of subtracting I “added thedifference from 10 and threw away the carry”.

51 51 -27 ==> +73-------- ------- 24

I explained it was better because you only had to knowdifferences from 10, and didn't have to learn a newalgorithm.

It differed from the curriculum she had taught for years, and though I consistently got the right answershe didn't understand how that could be. Confusionthen changed to anger. My teacher became very upset!

I was punished.

● Think about your family.Think about your family.● Get a real job with a big stable firm.Get a real job with a big stable firm.● Don't ask too many questions.Don't ask too many questions.● If you are not getting paid for yourIf you are not getting paid for your

work you're being robbed.work you're being robbed.● Fight to win. (view most group work Fight to win. (view most group work

situations as competitive not co-operative). situations as competitive not co-operative).

Working Class Values is a Military Culture

Conformity and following rules is importantfor the functioning of the system. By followingwell designed orders from those who haveearned positions of respect we all survive.

Culture ClashCulture Clash

God JobGod Job

Avoid RisksAvoid Risks

Family FirstFamily First

Work for a big company Work for a no-name startupwith 9/10 chance to fail

Don't ask questions Brainstorm and Dream

Follow Directions There are no directions,it hasn't been done before

Don't break the rules Break the rules

Play it safe Take risks

Don't let the boss rob youby not paying for your work

Work because you love thetopic and hope equity will paylater (chances are 1/10)

Comfort and safety Roller coaster ride

Ideas Easy to Kill● Ideas are sand castles any one can shoot one

down.

-example of the UWI sign proposal

Innovators Lose in Turf Battles● Ideas are easy to shoot down, so the innovator

can show no value.● Innovation proposals are always further out in

the future.● Innovation progress is not measurable.

Phases of a Company

mature

Not the ideal, but perhaps too often the case:Not the ideal, but perhaps too often the case:● Seed StageSeed Stage – Innovators slave for free, management – Innovators slave for free, management

is nilis nil● Growth StageGrowth Stage – Innovators applauded, management – Innovators applauded, management

concentrates on marketing the techconcentrates on marketing the tech● IPO stageIPO stage – Innovators may not fit in with new – Innovators may not fit in with new

management as it becomes a 'conventional company'management as it becomes a 'conventional company'● Mature stageMature stage – Managers are the top of their class in – Managers are the top of their class in

business school, they know their business and want business school, they know their business and want to beat the competitors, disruptive innovators to beat the competitors, disruptive innovators represent risk and a threat to their own jobs represent risk and a threat to their own jobs

Current ProgramsCurrent Programs

God JobGod Job

Avoid RisksAvoid Risks

Family FirstFamily First

In TaiwanIn Taiwan– 163 Colleges and Universities163 Colleges and Universities

– 98 have innovation incubators98 have innovation incubators

– 11 corporate funded incubators11 corporate funded incubators

– Many R&D achievements fed into industryMany R&D achievements fed into industry

– Familiar with building cities were there were none (frontier mentality)Familiar with building cities were there were none (frontier mentality)

– Strong SME presenceStrong SME presence

– Government policy support, Industry Technology Research Institute, Government policy support, Industry Technology Research Institute, APEC Center for Technology Exchange and Training, Small Medium APEC Center for Technology Exchange and Training, Small Medium Enterprise AdministrationEnterprise Administration*University-Industry Business Incubators, Wang, Hung & Wang, Open Journal of Business and *University-Industry Business Incubators, Wang, Hung & Wang, Open Journal of Business and ManagementManagement

Incubators US and InternationalIncubators US and International

http://blog.launch.co/blog/complete-list-of-incubators-and-accelerators-like-y-combinat.html

There are many ..

Inno Grant Program at EPFL Switzerland – Inno Grant Program at EPFL Switzerland – seeding startupsseeding startups– Offers professors $150,000 to make their Offers professors $150,000 to make their

research commercially viableresearch commercially viable

– Feeds these results into incubator building next Feeds these results into incubator building next door to the universitydoor to the university

– Incubator matches up Swiss companies with Incubator matches up Swiss companies with research projectsresearch projects

– Modeled on the MIT Despande Center Incubator Modeled on the MIT Despande Center Incubator grants for commercialization of researchgrants for commercialization of research

Google 20% ruleGoogle 20% rule● Google employees were allowed to work Google employees were allowed to work

one day a week on independent one day a week on independent projects, which resulted in such things projects, which resulted in such things as gmail.as gmail.

● The program has now been cut back.The program has now been cut back.

Lower Grade Education ChangesLower Grade Education Changes

if the video doesn't show/play, see this link: http://goo.gl/n2fzU2

Proposed ProgramsProposed Programs

God JobGod Job

Avoid RisksAvoid Risks

Family FirstFamily First

University 'Do' ClassesUniversity 'Do' Classes● Students contribute to free software Students contribute to free software

projects for class credit – like the old projects for class credit – like the old Berkeley model.Berkeley model.– NTU language compilersNTU language compilers

– NTU database codeNTU database code

– NTU linux versionNTU linux version

– NTU ray tracerNTU ray tracer

University Interdisciplinary CoursesUniversity Interdisciplinary Courses– Business schoolBusiness school

– Law schoolLaw school

– CSCS

together to do projectstogether to do projects

● Industry Guest Lectures – Industry guy Industry Guest Lectures – Industry guy prepares a lecture on a subject he works prepares a lecture on a subject he works on and gives it to a classon and gives it to a class

● Industry Guest teaches class or assists Industry Guest teaches class or assists in lab classin lab class

● Teach Brainstorming as a class at the Teach Brainstorming as a class at the University level – counters the 'think too University level – counters the 'think too much' effectmuch' effect

● Professors visit perhaps teach on days Professors visit perhaps teach on days in lower school classes, often enough to in lower school classes, often enough to know the students and their talents – know the students and their talents – counters the 'teacher authoritarian' and counters the 'teacher authoritarian' and 'suppressed talented student' effects.'suppressed talented student' effects.

● Greater awareness of social bullying – Greater awareness of social bullying – counters the 'kick the sand castle' effect.counters the 'kick the sand castle' effect.

● Participants in the incubator are working for the sponsoring industry in name until the incubated company takes off, or if it fails, the person goes to work for the company proper– Gives the employee credibility with the parents

– Gives the employee a landing pad in case the incubated company doesn't make it.

● More contract request work for designs, programs, etc. – a website market place for placing and buying contracts. Allows small businesses to thrive.

● Website market place for patents where the patent license is standardized – that way buyers can 'pick-and-use' immediately.

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