Andy Bechtolsheim talks at Stanford about the Process of Innovation

This morning, I got up at 4am for an unusual event, a talk by Andy Bechtolsheim back at Stanford University. And it was great! I took a couple of screenshots and notes. For those who would not know Andy, here is more below. And I should also add that Bechtoslheim is from Germany, I had mentioned him in a past article: Europeans and Silicon Valley. There should be the full video on Stanford Youtube in a few days…

More than 30 years ago as a Stanford graduate student, Andreas “Andy” Bechtolsheim designed a simple but powerful computer workstation that would help define the modern technology era and launch Sun Microsystems. He’s since founded three more startups, including cloud-networking company Arista Networks, where he is now chairman. His investing foresight is legendary. Not only was he the first major backer for Google, but he’s also been an early-stage investor in VMware, Brocade and others. Bechtolsheim will discuss the process of innovation and describe its importance to Silicon Valley.

Bechtolsheim began his talk with some historical background on innovation. If you want to only read about the lessons, jump to the end! (I am aware some of the screenshots are low-res…). Recent (I mean in the last 50 years) innovations have their roots in semiconductors, networking and the Internet and (Open-source) software as well as in an acceleration in technology development (including Moore’s law and a faster adoption cycle of products.) These are two slides about the semiconductor roadmap:

Then he showed how the Internet from Arpanet, to the browser and finally to social networking has accelerated the innovation cycle.

More importantly, he gave some clues about what innovation is about, and why start-ups have an advantage here. Innovation is not about R&D not even about marketing. It is about bringing a needed product to customers:

And he illustrated his arguments with the Apple case:

– Apple does not make a lot of R&D

– Apple does not really study customers

So how does innovation work. Here are some clues:

And very importantly, he finishes with the innovation culture at Apple, Google, Amazon and the lessons learnt:

In conclusion, Andy had great lessons:
– Innovation is not about R&D or customers, it is about products.
– Timing is critical, so focus.
– Big companies are about evolution not revolution.
Be the expert in your field and understand the market, both gives you (self-)confidence (to attract people.)
– Failure is not an issue in SV but fail fast. However outside of SV, you may have to hide for 30 years when you fail. In SV, not trying is the risk, not failing.
– He also discussed patenting, “a sore topic”.
– Following another question, he considered a major threat to innovation is the current weakness of venture capital (there is money, but the returns are not good and a lot of money goes in narrow fields – cleantech a few years ago, web2.0, etc)

Well the title was misleading. Innovation is not a process, it is a culture! If you like this, you have to watch the video…

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