University-Industry Relationships For Innovation (Success and Challenges)

1. University-Industry Relationships For Innovation(Success and Challenges) WIPO-CRUI Training Program on Intellectual Property and Management in Small and Medium-Sized Enterprises, Spin-off and Research Centers Rome, March 2006 Michael Eldredge mje@FuzzArtists.com mje@AllezVentures.com

2. Fuzz Artists New, angel-funded technology and entertainment start-up Founder, Managing Director and CTO Stanford University Networking Research Center University / Industry research and innovation collaboration Chief Executive Director Manugistics, Inc.; Talus Inc. Enterprise software VP, Technology Innovation and Development Decision Focus Management consulting Partner Centric Engineering Solutions Supercomputer-based computational design applications Engineering Software Products First company Personal Background

3. Stanford University and the Networking Research Center

4. Stanford University • Stanford University opened its doors in October 1891 • The 8,000 acre campus is in the heart of the Silicon Valley • There are 6,640 undergraduates • There are 7,540 graduate students • There are 1,700 tenure-line faculty • There are 8,243 staff members • There are 7 schools: • Humanities & Sciences • Engineering • Medicine • Business • Law • Earth Sciences • Education

5. 220 faculty in nine departments Exceptional faculty includes 17 Nobel laureates, 4 Pulitzer Prize winners, 128 members of the National Academy of Sciences and 83 members of the National Academy of Engineering. Highly qualified student body includes 81 Rhodes Scholars, 59 Marshal Award winners and 44 Truman Scholars Stanford is the gateway to Silicon Valley Diverse, open environment The Stanford School of Engineering An interdisciplinary and entrepreneurial approach to research is well established at Stanford

6. SNRC, CIS, SPRC, SNF, CIFE, … Stanford / Industry Relationship Opportunities • Technology Licensing • Contract Research • Research Grants • Affiliates Programs • Research Centers • Stanford Center for Professional Development • Corporate Philanthropy

7. Stanford Networking Research Center Strategic Objectives • Promote strong Stanford / Industry interaction in emerging information technology areas • Accelerate technology development through research, education and partnership • Provide world-class academic leadership in networking and communication technologies • If there is great work, then everyone will benefit. • Support great work… by great students… who go on to be the leaders in teaching, industry research and business.

8. Stanford Networking Research Center • Partnership between Stanford and Industry • Industry funding and guidance • Mission: Research, Education, Transfer • Various programs to promote research, education, interaction, transfer • Major research projects, Industry Mentor Program, Seminars, Researchers-In-Residence, CTO Vision Roundtables, Internships, … • Research projects types: • Major, multi-disciplinary projects • Targeted projects • School of Engineering and Departments • 220 Faculty in 9 Departments with over 25 Faculty, and about 80 PhD Students active • Electrical Engineering, Computer Science, Management Science, Statistics, Mechanical Engineering, …

9. The Partnership Agreement • Partnership Purpose • Support of work going on at Stanford • Definition • Funding is: A Gift; Not Sponsored Project (no financial accountability, no T&C for delivery, …) • Intellectual Property • Inventions, Patents, … • Ownership Simple, straightforward

10. Results and Impact Overview • Approx. 30 engineering Professors and 80 PhD students involved in research projects • 11major multi-disciplinary, multi-year research projects from 2000 – 2005 • 23 Industry mentored student programs funded (45 student-academic years) • Over 250 high-quality research papers published • 26 PhD degrees granted (4 with co-advisors) • 8 inventions filed with the Stanford Technology Licensing Office • $10MM+ endowment contributions that has already funded/is funding 5 Faculty Development chairs, 20 Graduate Fellowships • Support/contribution to recruiting of new faculty • Regular Industry, Special and Student-run Seminars • Leading edge public symposia (co-sponsored VC partner)

11. Staying “Fresh” – A Dynamic Organization Must Adapt

12. SNRC – Evolution # 3 ??? Networking Research Center “# 2” Networking Research Center “# 1” Telcomm Center

13. What Is Next For SNRC? • Great success. So what is the next strategic step? • More of the same? • Or change? • Much has changed • Economy has changed since 1999-2000 • Faculty vs. company initiative • Networking is infused across products and services and is much less “cutting edge” research • Company needs and foci have changed • Some constants • University research and education still has core needs • University leadership role still strong • Technology transfer methods are dynamic

14. Collaboration – Organizations Corporate “Researcher” University “Researcher” Corporate Strategy Students Publications -technology/science advancement Product Innovation Current Products • PhD / Graduates • new employees • new faculty Annual Budget

15. Collaboration – Basic Vision • Funding • Guidance • Equipment • Prototypes Corporate “Researcher” University “Researcher” Corporate Strategy Students Publications -technology/science advancement Product Innovation Current Products • PhD / Graduates • new employees • new faculty • IP • Advanced technologies to productize • PhD Graduates • Technology insight Annual Budget

16. Collaboration – Complexities Equipment, Lab, Prototype, etc. Support Industry Guidance Internal “clients” Business Partners Researcher Exchange (RIR, Interns, …) Industry Funding Corporate “Researcher” University “Researcher” Corporate Strategy Students Publications -technology/science advancement Product Innovation Academic objectives Current Products • PhD / Graduates • new employees • new faculty Internal/ University Funding Technology Direction University Peer Collaboration Standards Groups Government Funding Hiring Research Center Funding Annual Budget

17. Collaboration – Additional Entities Government ? ? ? ? Corporate “Researcher” University “Researcher” ? ? ? ? ? NGOs

18. Challenges • Serendipity vs. Predictability • “Harvesting” the value • Responsibility for harvesting value; Mechanisms; Re-dissemination • Rules of Engagement (implicit, explicit) • Expectations management (time scales, “results” / “deliverables”, …) • Expectations management (control, ownership, …) • Measures of success, tracking effects • Is it possible? Should we even try? • Individual vs. cooperative participation balance • Understanding the other side (large, complex organizations) • Visionary sponsorship • Commitment • Change of senior visionary leaders, sponsors, contacts, etc. … • Change of Strategic direction • …

19. Strategic Business and Research Theme Area Core Partner/Industry Leadership Core Faculty Leadership Research Activities Workshops, Events … Collaboration – Next Generation Efforts Exploratory Research Collaboration Networking Research Center “# 2” Networking Research Center “# 1” Telcomm Center

20. Comments / Principles / Lessons

21. What Are the Secrets of “Silicon Valley” Success? • Rules • 1. “There are none”. There is no magic answer. There is no recipe to follow.

22. Some Principles • Do something important • Challenge, take a risk, try something (take a step) • Failing as a learning experience • Win by providing high value to customers • Be the best / Work with the best people in every aspect • Meritocracy – reward for value delivered • Creativity is great! Creative people are great! • Dynamic, agile, flexible, open • Fun • Never repeat mistakes, learn and do better each time • Chaos is good, break the mold • It’s a small valley / industry / world / … in this together • all in the same ecosystem; you will, at various times, work for / with / against someone or some company • …

23. Risk • Is RISK good or evil? • Try something new and innovative • Be different • Leadership • Smart Risk … • Address risk EARLY • Big issues first, rather than last • “Buy down” the risk

24. A “Silicon Valley” view: . . . Accomplishment / Success • Never Tried Failure • Is FAILURE good or evil? • The stigma of failure • Repeated mistake vs. trying and learning • Calcio / Soccer Striker – takes many shots-on-goal, but best strikers take many shots-on-goal • Succeeded (company, project) • Failed (company, project)

25. Where to Start?How Can We Be Successful? • Principles for success • Established vision and mission • Charted by the executive leadership • Implementation and change plan • Strong leadership; strong management skills • Designed for specific environment (one size does not fit all) • Run as a managed project • Fiscally responsible • Deliver successes early and often (“baby steps, baby steps, …”) • Patience • Barriers to success • Fear (of failure, of success) • Fragmentation (no shared vision/mission) • Territories • Execution • Management and Leadership gaps • Moving too slowly (no momentum); Too fast (trouble keeping up)

26. Structuring for Value and Innovation (or Against?) • We (esp. managers) like: Predictability, repeatability, certainty • Structure / Organization charts – reorganize • Accounting – create new reports • Billable percentage (unbilled time) • Control • Contracts, work statements • Directorates (e.g. R&D group, Office of the CTO) – clear “owner” • A factory is meant to have predictable, repeatable, unchanging processes and outcomes • Important for manufacturing, etc., of course But the point of innovation is to achieve different, new, unique higher-value results – something that is …well, that is Innovative!

27. Be out of the box. What box? Thank you. Michael Eldredgemje@FuzzArtists.com Think out of the box.