Category Archives: Innovation

The Innovators by Walter Isaacson – part 2 : Silicon (Valley)

What I am reading now following my recent post The Complexity and Beauty of Innovation according to Walter Isaacson is probably much better known: Innovation in Silicon Valley at the time of Silicon – Fairchild, Intel and the other Fairchildren. I have my own archive, nice posters from those days, one about the start-up / entrepreneur genealogy, with a zoom on Fairchild and one on Intel and one about the investor genealogy

Entrepreneurs…

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SiliconValleyGenealogy-Fairchild

SiliconValleyGenealogy-Intel

“There were internal problems in Palo Alto. Engineers began defecting, thus seeding the valley with what became known as Fairchildren: companies that sprouted from spores emanating from Fairchild.” [Page 184] “The valley’s main artery, a bustling highway named El Camino Real, was once the royal road that connected California’s twenty-one mission churches. By the early 1970s – thanks to Hewlett-Packard, Fred Terman’s Stanford Industrial Park, William Shockley, Fairchild and its Fairchildren – it connected a bustling corridor of tech companies. In 1971, the region got a new moniker. Don Hoefler, a columnist for the weekly trade paper Electronic News, began writing s series of columns entitled “Silicon Valley USA,” and the name stuck.” [Page 198]

… and Investors

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WCVCGenealogy-Beginnning

“In the eleven years since he had assembled the deal for the traitorous eight to form Fairchild Semiconductors, Arthur Rock had helped to build something that was destined to be almost as important to the digital age as the microchip: venture capital.” [Page 185] “When he had sought a home for the traitorous eight in 1957, he pulled out a single piece of legal-pad paper, wrote a numbered list of names, and methodically phoned each one, crossing off the names as he went down the list. Eleven years later, he took another sheet of paper and listed people who would be invited to invest and how many of the 500’000 shares available at $5 apiece he would offer to each. […] It took them less than two days to raise the money. […] All I had to tell people was that it was Noyce and Moore. They didn’t need to know much else.” [Pages 187-88]

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The Intel culture

“There arose at Intel an innovation that had almost as much of an impact on the digital age as any [other]. It was the invention of a corporate culture and management style that was the antithesis of the hierarchical organization of East Coast companies.” [[Page 189] “The Intel culture, which would permeate the culture of Silicon Valley, was a product of all three men. [Noyce, Moore and Grove]. […] It was devoid of the trappings of hierarchy. There were no reserved parking places. Everyone including Noyce and Moore, worked in similar cubicles. […] “There were no privileges anywhere” recalled Ann Bowers, who was the personnel director and later married Noyce, [she would then become Steve Jobs’ first director of human resources] “we started a form of company culture that was completely different than anything that had been before. It was a culture of meritocracy.
It was also a culture of innovation. Noyce had a theory that he developed after bridling the rigid hierarchy at Philco. The more open and unstructured a workplace, he believed, the faster new ideas would be sparked, disseminated, refined and applied.” [Pages 192-193]

The Complexity and Beauty of Innovation according to Walter Isaacson

The Innovators by Walter Isaacson is a great book because of its balanced description of the role of geniuses or disruptive innovators as much as of teamwork in incremental innovation. “The tale of their teamwork is important because we don’t often focus on how central their skill is to innovation. […] But we have far fewer tales of collaborative creativity, which is actually more important in understanding how today’s technology evolution was fashioned.” [Page 1] He also goes deeper: “I also explore the social and cultural forces that provide the atmosphere for innovation. For the birth of the digital age, this included a research ecosystem that was nurtured by the government spending and managed by a military-industrial collaboration. Intersecting with that was a loose alliance of community organizers, communal-minded hippies, do-it yourself hobbyists, and homebrew hackers, most of whom were suspicious of centralized authority.” [Page 2] ”Finally, I was struck by how the truest creativity of the digital age came from those who were able to connect the arts and sciences.” [Page 5]

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The computer

I was a little more cautious with chapter 2 as I have the feeling that the story of Ada Lovelace and Charles Babbage is well known. I may be wrong. But chapter 3 about the early days of the computer was mostly unknown to me. Who invented the computer? Probably many different people in different locations in the US, the UK and Germany, around WWII. “How did they develop this idea at the same time when war kept their two teams isolated? The answer is partly that advances in technology and theory made the moment ripe. Along with many innovators, Zuse and Stibitz were familiar with the use of relays in phone circuits, and it made sense to tie that to binary operations of math and logic. Likewise, Shannon, who was also very familiar with phone circuits, would be able to perform the logical tasks of Boolean algebra. The idea that digital circuits would be the key to computing was quickly becoming clear to researchers almost everywhere, even in isolated places like central Iowa.” [Page 54]

There would be a patent fight I did not know about. Read pages 82-84. You can also read the following on Wikipedia: “On June 26, 1947, J. Presper Eckert and John Mauchly were the first to file for patent on a digital computing device (ENIAC), much to the surprise of Atanasoff. The ABC [Atanasoff–Berry Computer] had been examined by John Mauchly in June 1941, and Isaac Auerbach, a former student of Mauchly’s, alleged that it influenced his later work on ENIAC, although Mauchly denied this. The ENIAC patent did not issue until 1964, and by 1967 Honeywell sued Sperry Rand in an attempt to break the ENIAC patents, arguing the ABC constituted prior art. The United States District Court for the District of Minnesota released its judgement on October 19, 1973, finding in Honeywell v. Sperry Rand that the ENIAC patent was a derivative of John Atanasoff’s invention.” [The trial had begun in June 1971 and the ENIAC patent was therefore made invalid]

I also liked his short comment about complementary skills. “Eckert and Mauchly served as counterbalances for each other, which made them typical of so many digital-age leadership duos. Eckert drove people with a passion for precision; Mauchly tended to calm them and make them feel loved.” [Pages 74-75]

Women in Technology and Science

It is in chapter 4 about Programming that Isaacson addresses the role of women. “[Grace Hopper] education wasn’t as unusual as you might think. She was the eleventh woman to get a math doctorate from Yale, the first being in 1895. It was not at all uncommon for a woman, especially from a successful family, to get a doctorate in math in the 1930s. In fact, it was more common than it would be a generation later. The number of American women who got doctorates in math during the 1930s was 133, which was 15 percent of the total number of American math doctorates. During the decade of the 1950s, only 106 American women got math doctorates, which was a mere 4 percent of the total. (By the first decade of the 2000 things had more than rebounded and there were 1,600 women who got math doctorates, 30 percent of the total.)” [Page 88]

Not surprisingly, in the early days of computer development, men worked more in hardware whereas women would be in software. “All the engineers who built ENIAC’s hardware were men. Less heralded by history was a group of women, six in particular, who turned out to be almost as important in the development of modern computing.” [Page 95] “Shortly before she died in 2011, Jean Jennings Bartik reflected proudly on the fact that all the programmers who created the first general-purpose computer were women. « Despite our coming of age in an era when women’s career opportunities were generally quite confined, we helped initiate the era of the computer. » It happened because a lot of women back then had studied math and their skills were in demand. There was also an irony involved: the boys with their toys thought that assembling the hardware was the most important task, and thus a man’s job. « American science and engineering was even more sexist than it is today, » Jennings said. « If the ENIAC’s administration had known how crucial programming would be to the functioning of the electronic computer and how complex it would prove to be, they might have been more hesitant to give such an important role to women.” [Pages 99-100]

The sources of innovation

“Hopper’s historical sections focused on personalities. In doing so, her book emphasized the role of individuals. In contrast, shortly after Hopper’s book was completed, the executives at IBM commissioned their own history of the Mark I that gave primary credit to the IBM teams in Endicott, New York, who had constructed the machine. “IBM interests were best served by replacing individual history with organizational history,” the historian Kurt Beyer wrote in a study of Hopper. “The locus of technological innovation, according to IBM was the corporation. The myth of the lone radical inventor working in the laboratory or basement was replaced by the reality of teams of faceless organizational engineers contributing incremental advancements.” In the IBM version of history, the Mark I contained a long list of small innovations, such as the ratchet-type counter and the double-checked card feed, that IBM’s book attributed to a bevy of little-known engineers who worked collaboratively in Endicott.
The difference between Hopper’s version of history and IBM’s ran deeper than a dispute over who should get the most credit. It showed fundamentally contrasting outlooks on the history of innovations. Some studies of technology and science emphasize, as Hopper did, the role of creative inventors who make innovative leaps. Other studies emphasize the role of teams and institutions, such as the collaborative work done at Bell Labs and IBM’s Endicott facility. This latter approach tries to show that what may seem like creative leaps – the Eureka moment – are actually the result of an evolutionary process that occurs when ideas, concepts, technologies, and engineering methods ripen together. Neither way of looking at technological advancement is, on its oqn, completely satisfying. Most of the great innovations of the digital age sprang from an interplay of creative individuals (Mauchly, Turing, von Neumann, Aiken) with teams that knew how to implement their ideas.”
[Pages 91-92]

Google about Disruptive and Incremental Innovation

This is very similar to what I read about Google and posted recently in The Importance and Difficulty of Culture in Start-ups: Google again…: “To us, innovation entails both the production and implementation of novel and useful ideas. Since “novel” is often just a fancy synonym for “new”, we should also clarify that for something to be innovative, it needs to offer new functionality, but it also has to be surprising. If your customers are asking for it, you aren’t being innovative when you give them what they want; you are just being responsive. That’s a good thing, but it’s not innovative. Finally “useful” is a rather underwhelming adjective to describe that innovation hottie, so let’s add an adverb and make it radically useful, Voilà: For something to be innovative, it needs to be new, surprising, and radically useful.” […] “But Google also releases over five hundred improvements to its search every year. Is that innovative? Or incremental? They are new and surprising, for sure, but while each one of them, by itself is useful, it may be a stretch to call it radically useful. Put them all together, though, and they are. […] This more inclusive definition – innovation isn’t just about the really new, really big things – matters because it affords everyone the opportunity to innovate, rather than keeping it to the exclusive realm of these few people in that off-campus building [Google[x]] whose job is to innovate.” [How Google Works – Page 206]

Maybe more about The Innovators soon…

How can we foster student entrepreneurship?

I was in Eindhoven today for the great EVP program (20 young entrepreneurs from 4 European technical universities spent two weeks on four campuses developing their projects). I had two inspiring moments: 1st the mayor of Eindhoven had a great speech about the importance of innovation and entrepreneurship. 2nd we had a meeting of 20+ people debating about how to foster entrepreneurship in universities.

Eindhoven’s efforts for entrepreneurship and innovation

The mayor of Eindhoven, Rob van Gijzel, explained that Philips had been nearly everything for Eindhoven for decades (jobs of course, schools, hospitals, PSV…) but a lot of the jobs have been delocalized, and Philips has struggled. He mentioned that the life expectancy of Fortune 1000 companies has gone from 70 years to 12 years (these are notes so I may be wrong with my recollection of facts, but the spirit was it) and the life expectancy of a product is 2 years.

So as a mayor, it is his mission to think about the future, not the present only. Eindhoven still strives because it has NXP and ASML (Spin-off from Philips), because they have the largest Samsung R&D center outside of Korea, and an antenna of the Singularity University. Rob van Gijzel unusually knows a lot about technology for a politician! Maybe it’s because it is Eindhoven… and Eindhoven is putting a lot of energy and money in universities, accelerators, start-ups and the unique high-tech campus Eindhoven (www.hightechcampus.com) which hopefully will create a lot of high value jobs. Big established companies, SMES, start-ups and universities seem to work together in the same direction. I am sure it is not perfect, but the effort is impressive!

Eurotech about Entrepreneurship

My second moment of inspiration was during a meeting of Eurotech about entrepreneurship. For once, it was not about the usual start-ups vs. SMEs, fast growth vs. controlled growth, but we had a great discussion about how to really help students interested in start-ups, about what is important, exposure to or teaching of entrepreneurship,

Just a few notes:

“early on you find inspiration, you are interested and you go where the crazy people are” … “it was the thing to do” …“I was an entrepreneur because my mother pushed me to be responsible and independent, then I tried, and failed twice, and then succeeded once”.

It is a long term effort, you teach, you expose, you inspire, and “you infect them with the virus” with possibly a long incubation. But should we do it early or late, compulsory or elective, filter the good entrepreneurs or expose/teach everyone…

“You need to teach entrepreneurship outside of the class…”

So you need a friendly ecosystem, where the university has its role (unclear which exactly, but it has one!) “Young entrepreneurs should know they do not need to pay for lawyers, they need to find friends who are lawyers, or who have a legal expertise.” You need to break the barriers, help people meet and find the people they need, also break the regional barriers because regional support focuses on local development, which is not necessarily the best friend of an entrepreneur who needs to think globally. Ecosystems have to be open, people need to travel, where the talent and money are

So we agreed there was not a general agreement on the strategic way of fostering entrepreneurship…though it is very important…

Can the next google come from Europe? An answer by Fathi Derder

Fathi Derder, a young Swiss politician and former journalist, gave his views in the book Le prochain Google sera Suisse (à 10 conditions). [The Next Google will be Swiss (provided 10 conditions)].

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I recognized some of my concerns in the foreword of the author, in his frustrations and his hopes. “Our start-ups do not grow in Switzerland. No trace of a Swiss Google. The last major Swiss success was Logitech, thirty years ago. Our start-ups are certainly good. But when it comes to grow rapidly and on a large scale, they leave Switzerland”[Page 9]. And his answer? “[…] If Switzerland wants to remain prosperous, if it wants to be able to anticipate and invent the world of tomorrow, we need two basic ingredients: memory and craziness” [Page 11].

Switzerland is not world champion of innovation

Derder is concerned about the lack of interest of the media and politicians because everything would be fine in the best of Swiss worlds…but: “The rankings are misleading and based on an abuse of language: we are certainly world champions in education, research, science and patents (from the multinational corporattions). But not in innovation. These are two different things. But in terms [of innovation] (the transformation of ideas into products and services that create value), there is much room for improvement” [Page 18-19].

To have the next Google in Switzerland, you need to have to the three “C”, Capital, Cerveaux (brains) and a Culture of failure and risk [page 35].

This certainly reminds me the “How to be Silicon Valley” by Paul Graham: “Within the US, towns have become startup hubs if and only if they have both rich people and nerds. Few startups happen in Miami, for example, because although it’s full of rich people, it has few nerds. It’s not the kind of place nerds like. Whereas Pittsburgh has the opposite problem: plenty of nerds, but no rich people.”

In this book of almost 180 pages are listed the ten conditions:
• Attracting the best talents
• Boosting venture capital (and encourage investment in SMEs)
• Simplifying the lives of entrepreneurs (and of investors)
• Providing resources for basic research
• Bringing universities and businesses together
• Developing thematic centers of excellence
• Establishing a national digital strategy
• Committing the state (and the army) to the ecosystem
• Enhancing data protection (and encouraging citizens to protect them anonymously)
• Valuing the Swiss success stories (and make them popular)

Derder is a super supporter of start-ups and his book is a great addition to understanding why start-ups are unique and essential. I believe however that the challenges are mostly cultural as I wrote recently in Why doesn’t Europe create any Google or Apple? You will not be surprised therefore if I prefer to stop with his 3 “C”s. In a presentation I recently prepared, I gave my ten conditions for innovation, all linked to a culture of innovation:
• Collaborate, even with Competitors
• Be Trustful
• Have a healthy disrespect for authority
• Do not lie (to yourself)
• Believe in your Instinct …
• … and have Courage
• In Innovation, the example comes from above
• Bet on Talent (and Youth)
• Do not fear Failure
• Be passionate

Up to you to choose…

3 things all first time entrepreneurs should know from the founder of Housetrip

An amazing article I had totally missed and read yesterday thank to a colleague from IFJ/venturelab, thanks! Arnaud Bertrand does not give the usual lessons about money, product, market, blablabla. It is much more profound and painful…:

1- Succeeding at building a good business is first and foremost succeeding in the art of hiring and managing people
2- Having a differentiated product or service is far from being enough to capture your market
3- Founding a company and seeing it to success is winning a whole lot of fights against yourself

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You must read it all: https://www.hottopics.ht/stories/how-to/3-things-all-first-time-entrepreneurs-should-know/

How do you measure your entrepreneurial ecosystem?

The title of this post is the first sentence of the report published by the Kauffman foundation entitled Measuring an Entrepreneurial Ecosystem. And it is a critical question. For years, universities, cities, regions, countries try to assess if they are innovative and entrepreneurial enough. And unfortunately, this is often measured through inputs and not outputs. Sometimes for good reasons, because stakeholders can offer favorable conditions but in the end entrepreneurs perform and stakeholders help but do not act…

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The Kauffman foundation is proposing a set of metrics to help in assessing your ecosystem. It is an ambitious proposal as these are not easy to obtain, but they look very interesting and I thought it would be worth describing them here. They are classified in 4 topics:

DENSITY

1- Number of new and young companies per 1,000 people,
where “young” can mean less than five or ten years old. This will tell you, in the most basic way, how the level of entrepreneurship changes over time relative to population.

2- Share of employment accounted for by new and young companies.
Entrepreneurial vibrancy should not just be measured by the number of companies — it also should include all the people involved in those companies. This will capture founders and employees.

3- Density of new and young companies in terms of specific sectors.
Some places already may have a particular economic sector that has been identified as the centerpiece of an ecosystem, such as “creative” industries or manufacturing. Again using population as a denominator.

FLUIDITY

4- Population flux, or individuals moving between cities or regions.
Entrepreneurial vibrancy means people both coming and going. From an ecosystem perspective, this means that the entrepreneurial environment must be fluid to enable entrepreneurs to engage. The obverse, of course, is that limits on fluidity will suppress entrepreneurial vibrancy.

5- Population flux within a given region.
Individuals also need to be able to find the right match with different jobs within a region. The pace at which they are able to move from job to job and between organizations should be an important indicator of vibrancy.

6- The number (and density) of high-growth firms,
which are responsible for a disproportionate share of job creation and innovation. A concentration of high-growth firms will indicate whether or not entrepreneurs are able to allocate resources to more productive uses. Importantly, high growth is not necessarily synonymous with high tech.

CONNECTIVITY

7- Connectivity with respect to programs, or resources, for entrepreneurs.
A vibrant entrepreneurial ecosystem is not simply a collection of isolated elements — the connections between the elements matter just as much as the elements themselves. The diversity of your entrepreneurial population is likely to be high, and a one-stop shop for serving entrepreneurs is unlikely to do much good in serving all of them. Entrepreneurs move through an ecosystem, piecing together knowledge and assistance from different sources, and the connectivity of supporting organizations should help underpin the development of a strong entrepreneurial network.

8- Spinoff rate.
The entrepreneurial “genealogy” of a given region, as measured by links between entrepreneurs and existing companies, is an important indicator of sustained vibrancy.

9- “Dealmaker” network
Individuals with valuable social capital, who have deep fiduciary ties within regional economies and act in the role of mediating relationships, making connections and facilitating new firm formation play a critical role in a vibrant entrepreneurial ecosystem.

DIVERSITY

10-Economic diversification,
an important concept because no city or region should be overly reliant on one particular industry. At a country level, research has shown that economic complexity is correlated with growth and innovation.

11- Attraction and assimilation of immigrants.
Historically, immigrants have a very high entrepreneurial propensity.

12- Economic mobility,
i.e. the probability of moving up or down the economic ladder between different income quintiles. The purpose is to improve the quality of life for your citizens, to expand opportunity, and to create a virtuous circle of opportunity, growth, and prosperity.

Jacques Lewiner about Innovation

I had the chance to meet this afternoon Jacques Lewiner, the renowned French professor and entrepreneur, who has contributed a lot in making ESPCI a completely atypical engineering school in the French landscape. This is probably the school that “innovates” the most, especially through its spin-offs.

Lewiner-at-ESPCI

No need to tell you much about the meeting because all his messages can be found in an excellent interview he gave to the newspaper Le Monde last November entitled “In France, there is a huge potential for innovation.” The article is online (and for a fee – it seems) but there is also a pdf document available, both in French. Allow me then to provide my translation below. His philosophy is simple: encourage and encourage again, with a lot of flexibility; in particular, we must strongly encourage entrepreneurship with Silicon Valley, Boston and Israel as models.

An anecdote before I let you read the interview: he enjoyed reminded me several times that his vision did not make him only friends, as he thought the proximity to the industry and flexibility are essential. But he told me he was the successor of a famous lineage with a similar philosophy: Paul Langevin was a renowned scientist, inventor and author of patents on sonar and… a communist. ESPCI was founded by engineers concerned about the weakness of France and its universities in chemistry after the loss of Alsace and Lorraine in 1870. The Protestant culture of its founders facilitated perhaps closer links between academia and industry. (See History of the Graduate School of Industrial Physics and Chemistry of the City of Paris in French again.)

“In France, there is a huge innovation potential”

For the researcher and entrepreneur Jacques Lewiner, we must fight the idea that research does not support the creation of wealth. Jacques Lewiner is Honorary Scientific Director of ESPCI ParisTech engineering school. This former researcher with “a thousand patents” (taking into account the many countries where patents have been filed) is also the head of the Georges Charpak ESPCI endowment intended to help researchers to put their ideas into practice. He is also the Dean of the valorization at Paris Sciences and Letters (PSL), a new entity bringing together several academic institutions. In addition to his research career, he created or co-founded many companies, including Inventel (Internet box manufacturer) Finsecur (fire safety) Cytoo (cell analysis) and Fluigent (fluid management).

What do you mean by innovation? This is what transforms the knowledge acquired – through study, imagination, research … – into a product, a process, a new service. Among this knowledge, those from the research have a very strong leverage. But innovation does not necessarily give a Nobel Prize. And conversely, intellectually beautiful ideas can be of no industrial interest! For example, I was convinced of the value of the piezoelectric plastic materials for which a voltage appears when distorted. I have filed patents and thought that these devices would be used everywhere. It was more than twenty years ago and it is still not the case. Only a few car seats have been able to detect thanks to them the presence of a passenger … In fact, often, the ingredients of an innovation are already around, but it lacks someone to put them together. When we designed the first Internet box with Eric Carreel, creating Inventel, there was no rocket science. We just had the idea of putting in one device a modem, a router, a firewall, a radio interface… It was also very difficult to convince operators of the interest of such a device but, fortunately for us, Free arrived and opened the market.

You did not always meet with success, as shown in the adventure of the first e-book, available from Cytale who filed for bankruptcy in 2002. What lessons did you learn from these failures? By definition, innovation means taking risks. Nothing is taken for granted. In case of failure, we must analyze the reasons and win an experience that others do not. It is enriching. I also remember very well my first failure. I was convinced to have found new properties of “electrets”, the electricity equivalent of what the magnets are in magnetism. I finally realized that they were already known for over a century. However, they could enable the design of new sensors, especially microphones. I tried to convince large corporations by contacting their research center, and not their business units. It was a mistake. These laboratories had obviously no interest in defending an invention that they had not made! I then had the chance to meet a remarkable entrepreneur, Paul Bouyer, with whom I could create my own business. The future was opened to us, but I did in record time all possible errors. I wanted to do everything myself, without understanding the importance of team work. The adventure lasted a year …

Where is France in terms of innovation? It has a huge potential. People are well trained and research is of quality. The basic culture is in place. But there are too many barriers between scientific discovery and the application that will appeal to the market. Our system blocks initiatives. We must simplify French law and do away with some nonsense.

Which ones? Before the 1999 Allegre law, a researcher could not even get into a board! That changed but nonsense persists. Today, it is very difficult for a researcher to become a consultant, the authorization may be received at the end of a very long time, sometimes a year, and, in addition, it has to be out of its filed of competence! Fortunately, some resourceful people manage to get by, but it is an obstacle for most. A ESPCI ParisTech, to help our researchers, we have created an endowment fund. We make strong efforts to answer within two weeks to a researcher who claims an invention. In some institutions, this response may take from six months to eighteen months! Such a delay is likely to delay the scientific publication of the researcher. One could imagine a rule that states that beyond two months no response means agreement.

Are patents necessary? Yes, they are useful in two ways. On the one hand, they avoid if successful innovation is copied and, secondly, they secure investors at a fundraiser. But patents can sometimes be like mirages. CNRS has long received many patent royalties from Pierre Potier’s antitumor drugs Taxotere and Vinorelbine. But when the public domain, these patents do not bring any revenue. [In 2008, they accounted for 90% of CNRS royalties]. To create wealth from research, we must also encourage the creation of innovative companies. At ESPCI ParisTech, we help in patenting but also in the creation of start-ups, by granting them very favorable terms in exchange for 5% of their capital. It is a model of operation similar to that of Stanford University [in California], which portfolio of ownership in start-ups (like Google) represents more income than from patents. Some universities charge a 10% to 25% ownership in start-ups, and further require the repayment of loans. It is far too greedy and discouraging for researchers. A few years ago, the Ecole Centrale estimated that its start-ups had generated a ten-year cumulative revenue of € 96 million. For ESPCI ParisTech, over the same period, it was 1.4 billion. And for the Technion Institute in Israel, it was 13 billion in 2013. Do not tell me you cannot do the same in France!

Maybe is it a question of culture. Can we change it? One should not oppose research and creation of economic activity. But it is true that in France sometimes persists the idea that researchers should not benefit financially from their work. However, it is not shocking that good research also creates economic wealth. We must create a favorable ground leaving the most possible freedom for researchers. We can also improve the training of researchers and engineers. Stanford University and the Technion are also models here. The former, with its Biodesign Center, promotes the mixing of cultures between physicists, chemists, medical doctors, biologists, computer scientists… As part of their curriculum, students are required to file a patent, or even start a business! At PSL, we have created with this in mind a new curriculum, the Institute of Technology and Innovation, in which research and innovation are mixed.

Many economists are pinning their hopes on the digital world to boost growth. What about you? Of course, the digital world will have its place in the future as it will be used in all activities. Sometimes we assimilate the digital technologies and the Internet start-ups. The latter sometimes have phenomenal success, sometimes ephemeral. Many fail. The area that can benefit directly from the research is the industrial sector, creating jobs and activities. Have we reached the peak of development and innovations? Certainly not. On the contrary, a new world is opening for the next generations at the confluence of chemistry, physics, biology, electronics and information technology. All this will continue to result in improved quality of life. Let’s not put artificial obstacles on this path and therefore be optimistic about the results that will follow.

Interview by David Larousserie
Le Monde, November 23, 2014.

Invention is the Mother of Necessity!

I am reading the remarkable Guns, Germs, and Steel: The Fates of Human Societies by Jared Diamond.

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I did not think initially that I would have anything to extract from it related to entrepreneurship and innovation. And I was wrong. I just read a section about human inventions and innovations, which I liked very much. Here it is.

THF STARTING POINT for our discussion is the common view expressed in the saying “Necessity is the mother of invention.” That is, inventions supposedly arise when a society has an unfulfilled need: some technology is widely recognized to be unsatisfactory or limiting. Would-be inventors, motivated by the prospect of money or fame, perceive the need and try to meet it. Some inventor finally comes up with a solution superior to the existing, unsatisfactory technology. Society adopts the solution if it is compatible with the society’s values and other technologies.
Quite a few inventions do conform to this commonsense view of necessity as invention’s mother. In 1942, in the middle of World War II, the U.S. government set up the Manhattan Project with the explicit goal of inventing the technology required to build an atomic bomb before Nazi Germany could do so. That project succeeded in three years, at a cost of $2 billion (equivalent to over $20 billion today). Other instances are Eli Whitney’s 1794 invention of his cotton gin to replace laborious hand cleaning of cotton grown in the U.S. South, and James Watt’s 1769 invention of his steam engine to solve the problem of pumping water out of British coal mines.
These familiar examples deceive us into assuming that other major inventions were also responses to perceived needs. In fact, many or most inventions were developed by people driven by curiosity or by a love of tinkering, in the absence of any initial demand for the product they had in mind. Once a device had been invented, the inventor then had to find an application for it. Only after it had been in use for a considerable time did consumers come to feel that they “needed” it. Still other devices, invented to serve one purpose, eventually found most of their use for other, unanticipated purposes. It may come as a surprise to learn that these inventions in search of a use include most of the major technological breakthroughs of modern times, ranging from the airplane and automobile, through the internal combustion engine and electric light bulb, to the phonograph and transistor. Thus, invention is often the mother of necessity, rather than vice versa.
A good example is the history of Thomas Edison’s phonograph, the most original invention of the greatest inventor of modern times. When Edison built his first phonograph in 1877, he published an article proposing ten uses to which his invention might be put. They included preserving the last words of dying people, recording books for blind people to hear, announcing clock time, and teaching spelling. Reproduction of music was not high on Edison’s list of priorities. A few years later Edison told his assistant that his invention had no commercial value. Within another few years he changed his mind and did enter business to sell phonographs but for use as office dictating machines. When other entrepreneurs created jukeboxes by arranging for a phonograph to play popular music at the drop of a coin, Edison objected to this debasement, which apparently detracted from serious office use of his invention. Only after about 20 years did Edison reluctantly concede that the main use of his phonograph was to record and play music.
The motor vehicle is another invention whose uses seem obvious today. However, it was not invented in response to any demand. When Nikolaus Otto built his first gas engine, in 1866, horses had been supplying people’s land transportation needs for nearly 6,000 years, supplemented increasingly by steam-powered railroads for several decades. There was no crisis in the availability of horses, no dissatisfaction with railroads.
Because Otto’s engine was weak, heavy, and seven feet tall, it did not recommend itself over horses. Not until 1885 did engines improve to the point that Gottfried Daimler got around to installing one on a bicycle to create the first motorcycle; he waited until 1896 to build the first truck.
In 1905, motor vehicles were still expensive, unreliable toys for the rich. Public contentment with horses and railroads remained high until World War I, when the military concluded that it really did need trucks. Intensive postwar lobbying by truck manufacturers and armies finally convinced the public of its own needs and enabled trucks to begin to supplant horse-drawn wagons in industrialized countries. Even in the largest American cities, the changeover took 50 years.
Inventors often have to persist at their tinkering for a long time in the absence of public demand, because early models perform too poorly to be useful. The first cameras, typewriters, and television sets were as awful as Otto’s seven-foot-tall gas engine. That makes it difficult for an inventor to foresee whether his or her awful prototype might eventually find a use and thus warrant more time and expense to develop it. Each year, the United States issues about 70,000 patents, only a few of which ultimately reach the stage of commercial production. For each great invention that ultimately found a use, there are countless others that did not. Even inventions that meet the need for which they were initially designed may later prove more valuable at meeting unforeseen needs. While James Watt designed his steam engine to pump water from mines, it soon was supplying power to cotton mills, then (with much greater profit) propelling locomotives and boats.

THUS, THE COMMONSENSE view of invention that served as our starting point reverses the usual roles of invention and need. It also overstates the importance of rare geniuses, such as Watt and Edison. That “heroic theory of invention,” as it is termed, is encouraged by patent law, because an applicant for a patent must prove the novelty of the invention submitted. Inventors thereby have a financial incentive to denigrate or ignore previous work. From a patent lawyer’s perspective, the ideal invention is one that arises without any precursors, Like Athene springing fully formed from the forehead of Zeus.
ln reality, even for the most famous and apparently decisive modern inventions, neglected precursors lurked behind the bald claim “X invented Y.” For instance, we are regularly told, “James Watt invented the steam engine in 1769,” supposedly inspired by watching steam rise from a teakettle’s spout. Unfortunately for this splendid fiction, Watt actually got the idea for his particular steam engine while repairing a model of Thomas Newcomen’s steam engine, which Newcomen had invented 57 years earlier and of which over a hundred had been manufactured in England by the time of Watt’s repair work. Newcomen’s engine, in turn, followed the steam engine that the Englishman Thomas Savery patented in 1698, which followed the steam engine that the Frenchman Denis Papin designed (but did not build) around 1680, which in turn had precursors in the ideas of the Dutch scientist Christiaan Huygens and others. All this is not to deny that Watt greatly improved Newcomen’s engine (by incorporating a separate steam condenser and a double-acting cylinder), just as Newcomen had greatly improved Savery’s.
Similar histories can be related for all modern inventions that are adequately documented. The hero customarily credited with the invention followed previous inventors who had had similar aims and had already produced designs, working models, or (as in the case of the Newcomen steam engine) commercially successful models. Edison’s famous “invention” of the incandescent light bulb on the night of October 21, 1879, improved on many other incandescent light bulbs patented by other inventors between 1841 and 1878. Similarly, the Wright brothers’ manned powered airplane was preceded by the manned unpowered gliders of Otto Lilienthal and the unmanned powered airplane of Samuel Langley; Samuel Morse’s telegraph was preceded by those of Joseph Henry, William Cooke, and Charles Wheatstone; and Eli Whitney’s gin for cleaning short-staple (inland) cotton extended gins that had been cleaning long-staple (Sea Island) cotton for thousands of years.
All this is not to deny that Watt, Edison, the Wright brothers, Morse, and Whitney made big improvements and thereby increased or inaugurated commercial success. The form of the invention eventually adopted might have been somewhat different without the recognized inventor’s contribution. But the question for our purposes is whether the broad pattern of world history would have been altered significantly if some genius inventor had not been born at a particular place and time. The answer is clear: there has never been any such person. All recognized famous inventors had capable predecessors and successors and made their improvements at a time when society was capable of using their product. As we shall see, the tragedy of the hero who perfected the stamps used for the Phaistos disk was that he or she devised something that the society of the time could not exploit on a large scale.
[Pages 242-245]

How the Web was Born

How the Web was Born is a book I bought recently while visiting CERN in Geneva. It was written by James Gillies and Robert Cailliau and published in 2000. If you like history, you will appreciate this detailed account of more than forty years of technology developments. I am not yet finished, but there were a couple of things I wanted to mention here.

howthewebwasborn

– Public funding, mostly through (D)ARPA has been critical for the emergence of the Internet.
– Xerox PARC with its freedom to explore in the 70s has also been instrumental even if it did not directly benefit from its innovations. I did not know key people were coming from ARPA (again).
– When in 1987, CERN needed equipment that could guarantee and secure data transfer, it used he a small 3-year old company… Cisco.
– They were similar experiments to ARPANET in the UK and France, but with different dynamics… [In France] “this apparent success is tempered by the fact that CII had been selling its products at a loss, despite billions of francs of state investment, and the resulting company, again called Bull, is but a small player on the world stage. American success stories like DEC and Apple were launched for the equivalent of less than a single day’s funding of the French Plan Calcul and that from private funds. The lesson to be learnt is that state investment alone isn’t the answer. France’s Délégation à l’Informatique included not a single computer scientist, and was motivated by national pride rather than economic viability, noted a 1997 French government report. Partly because of this, ‘the failure of CII was written in its genes’, one former director of Bull was moved to say. The American approach, on the other hand, most strongly expressed through ARPA, had been to support good ideas coming from the ground up rather than trying to impose something from the top down.” [Page 58]

Indeed the TCP/IP protocol won because it worked but not because it was planned… The Internet is an amazing innovation which does not belong to anyone but is the result of collective endeavors. Again, the role of the state is shown as a friendly enabler more than a direct actor. Interesting lessons (or at least useful reminders)…

Something rotten in the Google republic?

I should have added a point of disagreement or discomfort in the analysis made by the authors of How Google Works. On page 125, there is a short section called Disproportionate rewards:

“Once you get your smart creatives on board, you need to pay them. Exceptional people deserve exceptional pay. Here again you can look to the sports for guidance: Outstanding athletes get paid outstanding amounts. […] Yes they are worth it (when they perform up to expectations) because they possess rare skills that are tremendously leverageable. When they do well, they have disproporationate impact. […]

You can attract smart creatives with factors beyond money: the great things they can do, the people they’ll work with, the responsability and the opportunities they’ll be given, the inspiring company culture and values, and yes, maybe even free food and happy dogs sitting desk-side. […] But when those smart creatives become employees and start performing, pay them appropriately. The bigger the impact, the bigger the comp. Pay outrageously good people outrageously well, regardless of their title or tenure. What counts is their impact.”

HowGoogleWorks-cover

I am in fact coming back to Capitalism in Silicon Valley following my contribution on France Culture. My French culture naturally favors the collective rather than the individual, while America has a reverse culture. However, the excellent exchange between Xavier Niel and Edgar Morin (l’école de la vie) shows that the borders or at least the analysis are moving. “What can a young French do if he wants to get rich, which is not to be despised? Not much. So he/she leaves. If a young suburban, if excluded from the school system, he/she only has small jobs or illegal dealing. And it is tragic. […] The problem is that the state has no money. No money, no reform. There is no more vision and courage to face corporatism.” And there’s the problem of Republican elite which is out of breath. “The social elevator is not working anymroe. We have the worst grade among the OECD countries in this area. The elites are very little renewed. What hope can have a growing number of young people who will find it difficult to benefit from a system monopolized by a few self-proclaimed castes and other great public servants of the state, which management has also been poor?”

In California, Google also stirs controversy. The exclusivity and exception create exclusion. How to correct it? Picketty and others respond with tax. But Google and others do not pay (enough) taxes … And Eric Schmidt does not addresses the issue of the collective and Google uses the law to optimize taxation. The “exceptional” and “outrageously” can become outrageous…

My discomfort is amplified by the notion of merit. In the field of science, one “grows up on the shoulder of other giants” and many have been forgotten. Albert Einstein. Didn’t he owe anything to Mileva? These exceptional individuals. Don’t they owe nothing to the surrounding environment, which may have helped? I’m much more sensitive to the other argument the authors use: “fight for the Divas” (page 48). I believe that in science, we have not listened enough to the exceptional behaviors such as Perelman and Grothendieck, two mathematicians who have withdrawn from the world.

I do not have answers and just intuitions. Between the elite, the exceptions, the rare individuals, and the collective, society, people, there must be a better balance. Between the negative taxes that the multinational corporations pay and the higher-than-the-annual-income taxes of some wealthy entrepreneurs, there must be a wise mid-point, which should help solve some issues of Silicon Valley on one side and Europe on the other side…