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

March-2006 (c) Eldredge 2 Personal Background 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

March-2006 (c) Eldredge 3 Stanford University and the Networking Research Center

March-2006 (c) Eldredge 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

March-2006 (c) Eldredge 5 The Stanford School of Engineering 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 An interdisciplinary and entrepreneurial approach to research is well established at Stanford

March-2006 (c) Eldredge 6 Stanford / Industry Relationship Opportunities Technology Licensing Contract Research Research Grants Affiliates Programs Research Centers Stanford Center for Professional Development Corporate Philanthropy SNRC, CIS, SPRC, SNF, CIFE, …

March-2006 (c) Eldredge 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. 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.

March-2006 (c) Eldredge 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, …

March-2006 (c) Eldredge 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

March-2006 (c) Eldredge 10 Results and Impact Overview Approx. 30 engineering Professors and 80 PhD students involved in research projects 11 major multi-disciplinary, multi-year research projects from 2000 – 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)

March-2006 (c) Eldredge 11 Staying “Fresh” – A Dynamic Organization Must Adapt

March-2006 (c) Eldredge 12 SNRC – Evolution # 3 ??? Telcomm Center Networking Research Center “# 1” Networking Research Center “# 2”

March-2006 (c) Eldredge 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 –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

March-2006 (c) Eldredge 14 Collaboration – Organizations University “Researcher” Students Corporate “Researcher” Annual Budget Corporate Strategy Product Innovation Current Products PhD / Graduates -new employees -new faculty Publications -technology/science advancement

March-2006 (c) Eldredge 15 Collaboration – Basic Vision University “Researcher” Students Corporate “Researcher” Annual Budget Corporate Strategy Product Innovation Current Products PhD / Graduates -new employees -new faculty Publications -technology/science advancement Funding Guidance Equipment Prototypes IP Advanced technologies to productize PhD Graduates Technology insight

March-2006 (c) Eldredge 16 Collaboration – Complexities University “Researcher” Industry Funding Government Funding Internal/ University Funding Research Center Funding Industry Guidance Equipment, Lab, Prototype, etc. Support Researcher Exchange (RIR, Interns, …) Students University Peer Collaboration Corporate “Researcher” Annual Budget Internal “clients” Business Partners Corporate Strategy Hiring Product Innovation Current Products Standards Groups Technology Direction Academic objectives PhD / Graduates -new employees -new faculty Publications -technology/science advancement

March-2006 (c) Eldredge 17 Collaboration – Additional Entities University “Researcher” Corporate “Researcher” NGOs Government ? ? ? ? ? ? ? ? ?

March-2006 (c) Eldredge 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 …

March-2006 (c) Eldredge 19 Collaboration – Next Generation Efforts Telcomm Center Networking Research Center “# 1” Networking Research Center “# 2” Strategic Business and Research Theme Area Core Faculty Leadership Core Partner/Industry Leadership Research Activities Workshops, Events … Exploratory Research Collaboration

March-2006 (c) Eldredge 20 Comments / Principles / Lessons

March-2006 (c) Eldredge 21 What Are the Secrets of “Silicon Valley” Success? “There are none”. Rules 1. There is no magic answer. There is no recipe to follow.

March-2006 (c) Eldredge 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 …

March-2006 (c) Eldredge 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

March-2006 (c) Eldredge 24 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) Never Tried Accomplishment / Success A “Silicon Valley” view:

March-2006 (c) Eldredge 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)

March-2006 (c) Eldredge 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!

March-2006 (c) Eldredge 27 Michael Eldredge Thank you. Think out of the box. Think out of the box. Be out of the box. What box?

March-2006 (c) Eldredge 28