Category Archives: Innovation

The complexity of innovation policies – the example of Malaysia

I was lucky to meet last week two economists from the International Monetary Fund who are the authors of the working paper The Leap of the Tiger: How Malaysia Can Escape the Middle-Income Trap. It is not directly linked to high-tech innovation and I am not an economist; my expertise is limied to the nano-economics of start-ups. This being said, I was very impressed by the analysis of Reda Cherif and Fuad Hasanov.

In general, I read more about developed countries and high-tech entrepreneurship, Silicon Valley, obviously, but also the example of Israel, Finland, France, Chile… Lerner, Saxenian and Mazzucato have been important authors for me. Hasanov and Cherif explain how Malaysia tried to develop its economy and relatively failed compared to Taiwan and Korea. The reasons are complex and the interested person should read their paper.

They really show the complexity of things and again the recipe needs so much fine tuning, with no guarantee of success. The addition of Chile, Thailand and Norway in their analysis, makes it really rich. I understood that a combination of strong state support (incentives, funding, sometimes protection) and competition in the private sector (so many Korean automotive firms were initially created) with an emphasis on its ability to export is very striking. Why did Nokia succeeded for some time and not Alcatel maybe explained with their arguments. They also put a lot of emphasis in the ability to innovate, a must to enable exportations.

So Mazzucato is right, the state has an entrepreneurial role, but individual initiatives seem to be also important, something I had not necessarily understood in the cased of Taiwan and Korea. The diaspora of engineers who studied and work abroad (in the USA mostly) was instrumental to the economic development and innovation once they came back (sometimes many years later) in their home country…

Politics vs. Economics: A country is not a Start-up

I publish more and more posts about politics, society and start-ups. I recently had one about sexism in Silicon Valley and the motivation for this one is a French blogger who critized French president, Emmanuel Macron, for his saying that France should become a startup nation. The author, Mehdi Medjaoui, reacted by writing Non, la France ne doit pas devenir une start-up (No, France must not become a start-up).

This is a very interesting article in French, so I put most of the content in Google Translate and though I did my best to correct this (decently good) tool, I am not sure what follows is easily readable. But the main messages should be possible to follow. It is worth the read. the author knows very well start-ups and Silicon Valley and he does not have (I think) really much against them, btu I agree with him, their unique model and dynaics cannot and should be copied by states, and indeed only by a tiny number of people or groups.

France is not a start-up, it already has its model

No, France is not a start-up, that is to say a temporary organization in search of a model of growth and income, as defined by Steve Blank, one of the pioneers to theorize the mentality start- Up in Silicon Valley. France is a multi-century nation, whose model of “freedom equality fraternity” is universal, universalist and resonant for eternity. She is no longer looking for a model. She has been in the execution of this model for 220 years.

No, France is not a start-up, owned by a small number of shareholders and unelected investment funds, authorized to make unilateral choices without counter-measures that are necessary for the whole group. France is a democratic, sovereign nation whose representatives are of the people, elected by the people, for the people and seeking the separation and balance of power in the interests of all these citizens.

France should not think like a start-up, it must put innovation at the service of progress

No, France should not think “make something people want”, as would say Paul Graham, the founder of the best-known start-up accelerator that is YCombinator. France is a Republic (res-publica, the public thing) which thinks the general interest over particular interests. We would still have the death penalty if we were content to accomplish only the things people wanted. France must think “make what the people want”. The people as a whole. Not a part of the people.

No France should not adopt the strategy of blitzscaling thought by Reid Hoffman – founder of LinkedIn and investor – that is to say to invest resources with very great loss, on a very risky profile, betting on the debt to take Dominant market positions. France must manage its public finances in good faith because it is fundamentally the money of the citizens, and it must invest in infrastructure for the future, less risky and less profitable in the short term. It is not for the French State to take risks, it is for entrepreneurs, who will be rewarded for this. Because yes, thinking like a start-up is thinking of extreme growth, at any price, in a leak forward that leads to failure in 90% of cases. But unlike a startup, if you miss, you cannot start France again.

No, France must not succumb to the dictatorship of innovation that prevails in Silicon Valley, which is beginning to innovate to innovate as long as there are people to invest in a bubble economy … As Peter Thiel would say in “Where is the Future”. “We wanted flying cars, we had networks of 140 characters instead.” France should not think and control itself like a game where one bursts of candy, or a social network of photos or micro-messaging.

“France, the 5th world power and nuclear power does not drive like CandyCrush, Tinder or Snapchat”

On the other hand, France must think Progress. With values from the Enlightenment, it must enlighten the world again by thinking about the future, and by putting innovation and start-ups at the service of this future, because “Innovation without conscience is only ruin of the soul”.

For example, France as a nation must think the future by its ethical scientific and industrial intellectuals, define qualitative and quantitative objectives for the future of humanity, encourage innovation in this direction, go out of the «spray and pray» which is to believe that we must water and support all innovations and pray to see those that will evolve in progress.

It can do this by piloting its public research towards these objectives, the steering of its policy of financing innovation through the Public Investment Bank and the Caisse des Depots et Consignations and an open policy of valorization by its Socities for the Accelerated Transfer of Technology (SATT). The state can also do so with the legal context of intellectual property to allow all entrepreneurs in the territory to have a free license on unused patents owned by the state.

It is perhaps even negotiating at the global level to renounce the patenting of living organisms or medicines for poorer countries, or clean energy, in a logic of progress for humanity against the logic of capital. Somewhat like Elon Musk did when he put Tesla’s patents in the public domain, or the YCombinator accelerator I mentioned earlier, which guarantees with its YCResearch research center that all the results from their Works will be in the public domain.

At the same time, France, unlike the start-up philosophy, has to direct the world to think about the crazy guards that innovation tries to circumvent pushed by its logic of short-term profit. For example, Silicon Valley entrepreneurs and researchers in the OpenAI movement want to finance the balance of knowledge in the field of artificial intelligence to ensure that it does not drift and becomes our last invention. It is the role of an enlightened nation like France to think these things on a global level. Not to think like a start-up to accept any innovation whatever its impact on the world, on the sole pretext that it is innovation, without knowing in which direction to go. For as the Chinese proverb says, “There is good wind only to him who knows where he is going”.

No France should not yield like start-ups to the galactic datacracy which thinks that one can control everything with metrics of acquisition, activation, retention, income and recommendations, statistics and the Big data. Or even succumb to what Eric Ries, the author of Lean Startup, calls the Vanity Metrics, these indicators of success that are not. That we can all automate, in a virtuous martingale this creation of value and unlimited. No, the data is only a representation of reality because it always suffers from statistical and collection bias. As Jacky Fayolle, administrator of INSEE, puts it: “When indicators are used in a fetish fashion, disconnected from the information system from which they come, they deplete public action rather than enrich it, while Offering an easy but illusory assessment of the performance of these actions.”
Cathy O’Neil in her book Weapons of Maths Destruction: How Big Data Increases Inequality and Threatens Democracy takes on the example of the subprime crisis Where she explains that “a formula can be perfectly innocuous in theory. But when it is used on a large scale and becomes a national or global standard, it creates its own distorted and dystopic economy.” Behind, these are not application features that no longer work, they are people expropriated and put On the street, the financial bankruptcies of people who had invested their retirement in the markets and who have nothing more … and public money by hundreds of billions of all the citizens who come to bail out the banks.

On the scale of a start-up looking for its model, it is easy to go back in the real to understand what is not working and to publish a new version of the software two days later. When one speaks of basing the whole society behind the data, one takes the risk of diluting its meaning, which creates a systemic risk of discrepancy between reality and its statistical or algorithmic representation on a scale where one does not Can stop the machine.

No France should not act as a start-up, it must guarantee the long term

No, France should not “Move fast and break things”, that is to say to innovate at the risk of breaking the existing, as Mark Zuckerberg said in the first ten years of Facebook. France must guarantee national cohesion, guaranteeing progress for all, in the long term and without breaking the gains of social progress, its culture and its living together which are a legacy of the common French. Moreover once a critical size reached for Facebook, Mark Zuckerberg changed this principle to “Move fast with stable infrastructure”. This is closer to a sound strategy of rapid development by respecting the stability of what has already been built before, and which endorses the fact that Facebook was no longer a start-up. As France, too, must not think as such, it must also maintain the stability of its infrastructures, as quickly as it moves.

No, France does not have to “Fuck it, ship it”, an ideology that promotes the release of products not yet finished, to confront them with reality and learn from their impact on customers and the market. As Reid Hoffman (again) says, “If you’re not ashamed of your product when you take it out, it’s because you took too long to get it out and you’d have to get it out a lot sooner”.
France must think about reforms and laws in a spirit of respect for institutions, debate and consultation in the constitutional requirement and not produce laws or any other reform or infrastructure, without thinking about equality of rights. When you manage 67 million people in such an advanced way in your life, you cannot produce laws, utilities, infrastructure without thinking for all in the long run. You cannot do it without planning them on qualitative and quantitative goals of progress, egalitarian and ecological, just to get them out and see what it gives and then iterate. In other words: motorways or nuclear power plants are not built in “Fuck it ship it” mode.

No, France should not “Ask for forgiveness, not for permission”. The acts of the French state bind him before history. This can be seen, for example, in Germany, which still has no right to hold nuclear weapons or Japan which cannot devote more than 1% of its GDP to its army in retaliation for their actions during the second world War. It can also be seen with the consequences of colonization which remain open wounds in a large part of the population and a French dishonor in the History of the world. A start-up can make moral mistakes, play with the limits of the law like Uber and Airbnb to move the lines, but a state has many other responsibilities of another kind before international law and the course of the story. No France ought not to engage the nation for the future without thinking of the consequences.

France does not have to fail fast, fail often, but France is a nation state whose model has no right to break, in a country with 9 million poor people, 4 million poorly housed. Moreover, France cannot economically go bankrupt. The economic defeat, it ends in the end by “hyperinflation or war” as Karl Marx would say. Hyperinflation if we try to pay off the debts that have become un-repayable, the war with its creditors if we do not want to pay them back and they come to force it back.
And then we cannot start France again with another team and other investors. There is but one people of France, and one territory of France.

No France should not like a start-up segment its offers according to the citizens in a cleaving relationship, for citizens who can afford to subscribe and others not. On the contrary, it must treat the whole territory and all its citizens in an inclusive, “equal with equals, unequal with unequal” way, to compensate for differences of fact or nature, not to accentuate them.

No France should not invest everything solely on technological solutionism, which advocates that everything can be solved with an application, as Evgeny Morozov explains in his book “To save everything click here” or Jaron Lanier in his book “Who owns The Future.” Things are more complex than that when you run a nation. France must think, like Barack Obama in front of Silicon Valley entrepreneurs, that “Democracy is by definition disordered and that if all I had to do was produce a widget (web or mobile application) without worrying about Whether the poorest can access it or worry about possible collateral damage, then the recommendations of the Silicon Valley bosses would be great.”

No, France should not create temporal monopolies, as Peter Thiel would say in his book Zero to One, in order to create more margin than its competitors (especially Europeans) in order to continue investing to maintain this monopoly. France needs to think of economic collaboration with its European partners, to rebuild a political Europe that goes beyond the doctrine of free and undistorted competition that puts countries in tax and social competition. France must establish itself in Europe in a logic of cooperation, as we have seen with the industrial successes of Airbus and Ariane Espace. There remain the economics of the sea, the digital and so many other areas on which to cooperate at the European level with our partners, not our competitors.

France must be an infrastructure, think and act as an infrastructure

Instead of being a start-up and thinking like a start-up, France must become an entrepreneurial state. In this context, its role is a regulator, an insurer of last resort and an arbitrator who ensures the freedom to undertake, reduces the opportunity cost and the cost of access to the market to its minimum for entrepreneurs , Helps finance innovation, supports basic research, while protecting its strategic industries. Its role is to ensure neutrality, equity, transparency and stability in the marketplace to create a climate of sound confidence and enable entrepreneurs to innovate. In this respect, it is concretely to create an infrastructure favorable to the creation of value, with maximum positive externalities to allow the emergence of a fertile ecosystem to the taking of risk. But it is not France that must take risks! Entrepreneurs will be more agile to identify market needs and build experiences that customers expect. The State is involved in investing in infrastructure over the long term and pooling them for all, with access costs tending to zero with the number, allowing the opportunity cost to the entrepreneurial Real equality of opportunity.
So it is not to think like a start-up but to think like an infrastructure that allows the emergence of startups, guaranteeing as a state the counterpart of the legislative framework in the direction of Progress over the long term for the society.

A State is the opposite of “move fast and break things”, but rather “move forward and do not break”

“We can not stop progress” or the dictatorship of innovation

“In the speech of Emmanuel Macron at Vivatech, the word innovation is pronounced 25 times, the word progress does not appear.”

As Etienne Klein has often said in his lectures, “50 years ago, for every innovation that brought society forward, it was said, We do not stop progress”. There was a benevolent vision of innovation where it was said that technology came to free men and women from their condition. In a society where innovation is king, this expression takes a whole different turn. “One does not stop progress” is today the expression of a dictatorship of innovation. Technology is seen as a bulimic monster that will come to threaten our future, take jobs, consume more resources, with no safeguards. It is the theories of the Singularity University in Mountain View, where it is believed that technology will replace the man in a “forced march” and make it obsolete.

Is this really our plan for the future?

“The idea of progress was a doubly consoling idea. In the first place, because by sustaining the hope of a future improvement of our living conditions, by making a more desirable world a long way off, it made history humanly bearable. Second, because it gave meaning to the sacrifices it imposed. In the name of a certain idea of the future, mankind was called upon to work for a progress which the individual would not necessarily Experience, but whose descendants could benefit. ”
In short, to believe in progress was to accept the sacrifice of the personal present in the name of a certain credible and desirable idea of the collective future. But for such a sacrifice to have any meaning, a symbolic attachment to the world and its future was required. Is it because such a connection is lacking today that the word progress is disappearing or curling up behind the single concept of innovation, now on the agenda of all research policies? ”

The idea of progress is the opposite of the start-up philosophy that runs in the short term, in a forward flight dictated by the dogma of innovation at all costs in the name of the market, without putting it in context Desire for the future. Not every innovation that meets a market is progress. Some examples? Allowing to share photos that fade on a social network is not a progress for humanity. Paying to choose the genetic characteristics of one’s children, is not a progress for humanity. Transplanting the blood of young adults to try to get younger rich businessmen to rejuvenate is not a progress. Allowing to meet men and women on a simple thumb on her phone is not a progress for humanity. It’s up to you to judge for yourself.

For all these reasons, France should not become a start-up, nor should it think and act as a start-up. France is a nation, a state, a people, a history, a culture that has to extricate itself from the permanent pivot, for it is capable of thinking the future in the name of a desirable idea for which its people are ready to sacrifice. These reversals of strategy startups who do not know where they go and what their model are the opposite. The French model is established “Liberty, Equality, Fraternity” and it has an eternal vocation, for France is not and will never be an enterprise, it is a Republic.

Inequality is putting the American Dream in peril

As I am a big fan of both Piketty and Harari in addition to being a start-up fan, I was attracted by this article from the Stanford Magazine: This is Not Your Parents’ Economy – Inequality is putting the American Dream in peril. Here is the most striking message:

According to the “Fading American Dream” paper, 92 percent of people born in 1940 earned more in income at age 30 than their parents did at age 30. Only 50 percent of those born in 1984 did.
[…]
In trying to explain why mobility has fallen so precipitously, Chetty, Grusky and their team considered two “counterfactual” scenarios for those born in the 1980s. The first assumes higher GDP growth, equivalent to that experienced by those born in 1940 but distributed as it has been recently. The second uses the real GDP growth for the 1980s cohort but assumes a “more broadly shared” distribution. As the paper explains, “the first scenario expands the size of the economic pie, dividing it in the proportions by which it is divided today. The second keeps the size of the pie fixed, but divides it more evenly as in the past.”
[…]
The higher GDP growth scenario did increase mobility — to 62 percent from 50 percent. But the more broadly shared growth scenario did even better, increasing mobility to 80 percent. To achieve that higher level of mobility using GDP alone would require growth of 6.4 percent per year. (Recent years have seen growth under 3 percent in the United States.)
[…]
“We were able to say, if you care about upward mobility, aggregate growth wouldn’t be enough to restore it; instead, growth needs to be more equitably distributed.”

Les défis de l’innovation

Sorry – this should have been on the French version of my blog. I keep it there and copy it also on the FR side…

C’est en recevant ce matin un lien d’un article du journal de libération en date du 29 juin 2007 (vous lisez bien, 2007, pas 2017) que j’ai décidé de ce post. L’article s’intitule L’iPhone, sans mobile apparent. Il montre de manière presque hilarante la difficulté de prédire. Alors j’en ai profité aussi pour mettre sur Slideshare une présentation que j’ai faite il y a quelques jours intitulée les défis de l’innovation. Désolé car il n’y a pas l’audio, mais il y a quelques données révélatrices… enfin je crois…

Voici donc quelques extraits de l’article. Sur le marché du mobile tout d’abord: “Apple est modeste. Il ne vise que 1 % du marché du mobile, et ne pense écouler que 10 millions d’iPhones d’ici à la fin de 2008. Le marché du mobile, lui, tourne autour du milliard d’unités écoulées en 2006. […] Un créneau que Nokia a l’intention de solidement occuper. Sur les 350 millions de mobiles Nokia écoulés dans le monde en 2006, 77 millions sont des téléphones baladeurs capables comme l’iPhone de diffuser de la musique. Le finlandais a une bonne longueur d’avance…” Sur les chances d’Apple: “De l’avis des analystes, l’iPhone ne va pas bousculer le jeu.” […] «Apple, en lançant son iPhone, est sur le mode défensif. Il n’avait pas vraiment le choix.» 🙂

Voici donc mes slides. Je vous conseille les slides 6 et 10 de la partie 1, la partie 2 est un recyclage de présentations passées, que j’aime aussi tout particulièrement…

The Tesla Index, the new Innovation metric

There is no doubt about it, and as the summer begins smoothly, I allow myself an article somewhat less serious than usual, which confirms the thesis of my previous article, The University-based Startup Porsche Principle. Or is it the Tesla Principle?

Innovation is a complex topic but this does not prevent the desire to measure it. The Global Innovation Index with its 83 parameters is the best illustration of this. But cann’t we make it simpler? I propose the simpler Tesla Index which measures the number of Tesla linked to the institution which innovation is to be measured. It shows a certain financial success combined with a curiosity for novelty. We can always bring it back to the size of the entity if necessary …

At EPFL, the Tesla index according to my measures is 4 as of June 26, 2017 …


A Tesla, being charged on the EPFL campus on June 26, 2017…


on June 15, 2017


on June 13, 2017


on May 10, 2017


then the index goes up to 5, on July 4, 2017


then the index goes up to 7, on July 14, 2017 (I am not sure the red one is not the one I found first above). Thanks, Aurélien!

When the Inventor of the Microprocessor and Founder of Synaptics Talks

I had never mentioned here Federico Faggin, another European who became a serial entrepreneur in Silicon Valley. He was at EPFL today where he delivered an amazing speech about creativity and courage, the two elements inventors, innovators and entrepreneurs critically need. If you do not know him, just rush to his wikipedia page: “an Italian physicist, inventor and entrepreneur, widely known for designing the first commercial microprocessor. […] He was co-founder, with Ralph Ungermann, and CEO of Zilog, the first company solely dedicated to microprocessors. He was also co-founder and CEO of Cygnet Technologies and of Synaptics.”

I hope his talk will be put online, in which case I will give the reference later. In the mean time, here are just 3 pictures (taken by a colleague, thanks!) about his lessons learned.

– If you see a ‘little’ technical problem you don’t understand, don’t dismiss it: Face it and find its root cause
– Likewise, when you perceive that something is not working with an employee, act promptly: do not let performance or attitude issues fester
– Be open to receive solutions from anywhere: colleagues, literature, intuitions, dreams
– Strike the right balance between freedom and control
– ‘Throw an idea up in the air and leave’
– The power is in in the team: Foster a team spirit with passion for innovation and for quality products


– Always identify the critical issues and pay attention primarily to them
– Business problems are not technical problems
– Logical reasoning is good but watch out for the assumptions
– Intuition is your friend
– Risk cannot be avoided – you need courage
– Never underestimate the competition
– ‘Sensing’ the right product and the right time to market is the most important decision


– Articulate and explain the values, vision, mission, strategy and objectives of the company to all employees
– People watch and copy what you do, not what you say: The company culture is shaped by the actions and not the talk of the CEO
– Teach people how to make decisions based on principles and values
– Push decision making to the lowest possible level in the organization
– Know when it’s time to move on and make a change for yourself

As a conclusion to this post, here is my usual cap. table when I have data about founders. Here is Synaptics.

The Rainforest by Hwang and Horowitt (Part III) – the Recipe

After my initial notes (part I) and the importance of culture (part II) in the Rainforest by Hwang and Horowitt, here are my new notes about their recipe to build efficient ecosystems for entrepreneurial innovation. I will finish with a part IV about venture capital.

Again the authors remind us that “innovation is chaotic, serendipitous and uncontrollable, so processes that are linear and controlled are rarely self-sustaining. In contrast, what we strive for in a Rainforest is a system that yields immense impact, is low-cost, and generates internal sustainability. The only possible way to achieve these goals is to build a community of innovators where transaction costs have been reduced through the creation of trust, social norms, connectivity and diversity.” [Page 183]

So their recipe is not so much a recipe as a cure. In fact they say “rather than thinking like macroeconomists, to change behavior, we must think like psychiatrists […] We build rainforests by shaping the outward behavior of innovators. Over time, those behaviors can create changes in attitude, and eventually, the changes in attitude can lead to change in beliefs”. [Page 200-1]

In the recipe [pages 194-200], there is Hardware made of 4 “P”s: People, Professional, (i.e. institutions), Physical (i.e. infrastructure) and Policy. Hardware is necessary but not sufficient. There is also Software, with 5 pillars, Diversity, Extra-Rational Motivations, Social Trust, Rules (see my previous post) and Interpretation of the Rules. The Keystones will make all this possible.

The Rainforest canvas may be a helpful tool to assess the situation of an ecosystem in its physical and cultural components:

About Role Models, they have the interesting Porsche principle. “This principle holds that one of the greatest motivators for professors or graduate students on campus to start new companies is when one of their colleagues drives up in a new Porsche after selling their startup”. [Page 210] To be honest, today, at EPFL and probably elsewhere, I would call it the Tesla principle… (see my previous post…The University-based Startup Porsche Principle. Or is it the Tesla Principle?)

In their epilogue, the authors explain that “Perhaps, instead of fighting the chaos, we need to become more comfortable with it. Perhaps we just need a better map. The Rules of the Rainforest provide a useful map – one that shows the way to balance the freedom of chaos with the beauty of collaboration. […] It requires a ‘joyful participation’ in the ups and downs, the mistakes and the failures that are inevitable. Thus, love is like a solution to chaos. ” [page 280] They use a magnificent quotation from Richard Feynman to whom a student asked to write a message to his mother so that she would be interested in science. Here it is: “Tell your son to stop trying to fill your head with science – for to fill your hear with love is enough. Richard Feynman (the man you watched on BBC ‘Horizon'”.

Here is a slideshare presentation by the authors, which beautifully summarizes their vision.

The Rainforest by Hwang and Horowitt. Part 2: the Importance of Culture

After my introductory post about The Rainforest – The Secret to Building the Next Silicon Valley by Victor W. Hwang and Greg Horowitt, which focused on the importance of trust, here is a second piece about culture. The final part will describe how the authors claim they know the recipe to build rainforests. What is remarkable with the Rainforest is the ambition to explain that innovation is mostly cultural so that at the micro-level it cannot really be engineered, but at the macro-level rainforests can be built. I am not sure the authors are right, but the effort is really to be recognized.

One lesson of the Rainforest is that outcomes cannot be engineered. […] Serendipity itself cannot be engineered but an environment that is conducive to serendipity can be. [Page 65]

In their chapter 3 about People, they begin with Keystones, not Entrepreneurs. “What defines a Keystone? Over the years, we have observed certain individuals practicing a unique manner of human interaction that is critical to the growth of entrepreneurial innovation. […] These people are usually missing, or at least too scarce, in almost all regions that have failed at generating significant amounts of entrepreneurial innovation.” [Page 71]

These people are integrative, influential and impactful, they are brokers of social trust (by contrast to entrepreneurs who are people who absorb information, learn from practice and seek opportunities). “The San Francisco Bay Area has a vastly higher percentage of people who are involved in multiple firms. 4.5% of the actors counted in the Bay Area were involved in three or more startups, compared to 2.9% in Boston, 2% in San Diego, […] 1.2% in Austin […] 0.7% in Portland. […] The bay Area has a significantly higher share of individuals who are extremely connected and contribute to the growth of multiple startup ventures”. [Page 74]

The authors also show the diversity of psychologies, the diversity of backgrounds in people which are still connected and work together. “We see these unconscious behaviors at work with innovators everywhere in the world. Scientists versus entrepreneurs. Startups versus large corporations. Investors versus investees. These tribal conflicts can be obstacles to the development of Rainforests.” [Page 109] All the more that: “Similarly the process of building a startup company is one in which people must often rely on gut-level decision-making. Entrepreneurial innovation, by its nature, is virtually a never-ending series of educated guesses. Almost every decision is based substantially incomplete information.” [Page 106]

America is the building of a society not burdened by historical tribes. […] They are less chained to the past. Instead Americans tend to be identified by self-reliance. […] People still run to California today. It is commonly regarded as the land of pioneers, nonconformists, artists, and rebels. [Page 116] Culture is critical to the way economic systems function because it provides the rules of engagement between people that hopefully can maximize their collective well-being. [Page 118] The authors are not naïve but claim that all these people need to find the right balance. A venture capitalist is caught between trying to own as much of a company as possible and trying to leave enough equity in the hands of the entrepreneurial team to keep them fully incentivized. […] A VC wants to preserve a reputation. [Page 119] Innovative behavior is not driven by rational maximization. There are in fact other forces, which can be called extra-rational: competition, altruism, adventure, discovery, creativity, meaning, concern.

Here I cannot avoid mentioning the great (counter-)example of Orson Welles about the Scorpio and the Turtle… Hopefully nature is not everything, culture matters.

One mistake of policy makers is to underestimate these extra-rational motivations. “Governments and corporations often try to incentivize innovation by focusing on financial mechanisms, such as tax breaks, subsidies, grants and loans. But overall, this strategy has been poor. They cannot be only the ends in themselves.” [Page 127]

Traditional incentives, benefits and costs: [Page 124]
Benefits:
Some possibility of making more money
Costs
Sacrifice a stable income and career perhaps forever
Risk social disapproval from family, friends, potential spouses
Difficulty and fear of working with strangers outside conventional circles of trust, culture, ethnicity, language
Difficulty and extra effort in communicating effectively
Huge investment of time, effort, stress
Possibility of losing everything (depending on laws, regarding bankruptcy, partnerships, etc.)

Rainforest incentives, benefits and costs: [Page 126]
Benefits:
Perceived and possibly real opportunity of making more money (following role models that have validated the path already)
Joy of discovery, novelty, adventure, creativity, passion
Social approval (as a peer member of a community of innovators)
Joy of friendship, sharing, love working on a team, building new trust, common values and goals
Fulfillment from the possibility of making a difference in society, leaving a legacy for future generations
Thrill of competition
Freedom and independence
Costs
Little social punishment, often encouragement, from family and friends for taking a worthwhile risk
Some anxiety from meeting new people, but offset by the joy of making new friendships
Huge investment of time, effort, and stress, but viewed in a neutral or even positive light because pursuing a personal passion
Little risk of losing everything because new opportunities emerge in the process of experimentation
Much lower probability of failure from a broad community of fellow innovators.

And the authors claim what are needed are 7 rules [Page 156]:
– Break the rules and dream
– Open doors and listen
– Trust and be trusted
– Experiment and iterate together
– Seek fairness, not advantage.
– Err, fail and persist.
– Pay it forward.

People usually think of Silicon Valley as an anomaly in the otherwise “normal” history of the world, but what if we reversed that proposition? What if we envisioned Silicon Valley as the natural endpoint of a 50,000-year story? Perhaps it could be the latest stage in the evolution of human society, from a culture based on tribes to a culture based on pragmatic individuals. [page 152]

Look at Harari again if you have not not already…

Research Exploitation according to Jacques Lewiner

The excellent Paris Innovation Review (formerly known as the ParisTech review) just published an interview of Jacques Lewiner (for the ones not knowing him, you may want to have a look at Jacques Lewiner about Innovation. This new article is entitled Research exploitation: catching up at a quick pace!

It begins with:“Academic research is not only a driver of scientific progress. It is a means to change the world. Many discoveries, including in areas related to basic research, can lead to new processes, products or services.”

Lewiner then explains the complexity of a successful exploitation and biases related to it. “The first [bias] is that, when we think about exploitation, we stick to patents. […] But sticking to patents means ignoring the essential, i.e. the entrepreneurial aspect of exploitation. […] Hence the importance of the entrepreneurial aspect: encouraging researchers to found startups and develop by themselves the economic potential of their discovery. The second bias comes [with …] a strong reluctance to admit that a researcher can make money, or even a fortune. […] A researcher’s brain is government property!”

Then Lewiner adresses the topic of licensing – More about it in How much Equity Universities take in Start-ups from IP Licensing? So here is what he says: “Nothing prevents the institution from taking shares in the company. 5% of shares, for example, is a reasonable figure, close to what most dynamic ecosystems offer. […] Holding golden shares would be equally counterproductive. […] In short, we need a whole new culture of investment.”

Lewiner indeed insists on an adequate culture: “Speed is a real challenge and on this sense, a well-equipped institution with some experience and good contacts […] can offer a real added value. Role models can also play an incentive role for researchers. […] All these ingredients of the “startup culture” require transmission.”

In the end, I only disagree with his final comment: “I dream of the day when French doctoral students will answer to the question of what they will do after their thesis with the same mindset as their counterparts in Stanford or Harvard: ‘I’m still trying to figure out in which of my thesis supervisor’s startups I want to work with.’ ” I think Lewiner is wrong. Ideally, they should do their own start-ups, just like they do at Stanford

PS: thanks a lot to the colleague who mentioned this interview to me 🙂

The Industries of the Future by Alec Ross

The Industries of the Future is not a very good book. Probably because it tries to talk about the future and nobody knows about it. But it has some merits that I will describe in the end…

Even worse, I think it is not as precise an analysis as is The Innovation Illusion by Fredrik Erixon and Bjorn Weigel. Why do I claim such a thing? Let me just mention one example. To show the potential of robots in the future, Ross reminds us Foxconn claim in 2011 that it would have installed one million robots in by 2015. (See for example Foxconn Will Replace Workers With 1 Million Robots in 3 Years). Ross even adds that Foxconn had already installed 300’000 robots. Erixon and Weigel have different views and explain that Foxconn had not even installed 50’000 robots in 2015. So who is right? I did some search and all media mentions 40’000 robots only in 2016… (see Foxconn reaches 40,000 robots of original 1 million robot automation goal). When you want to talk about the future, you need to be precise about the present…

Now his chapter The Geography of Future Markets provides interesting food for thought. Silicon Valley has been the center of high-tech innovation for nearly 50 years. Many regions have tried to copy it, without much success. But many regions have domain expertise such as Boston for biotech, Israel for security, Japan/SouthKorea/Germany for robotics, etc. If these regions leverage the future innovations, they will continue to be leaders. If not, “twentysomething” nerds without any domain expertise but with a lot entrepreneurial drive and technical know-how will take the lead. Ross provides examples but it is sufficient to look at what Elon Musk did to the payment industry (PayPal), automotive industry (Tesla) and aerospace industry (SpaceX). Silicon Valley has extensive experience in “scale-ups” and is not losing any of it…