Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Kenneth P. Morse, Senior Lecturer and Managing Director MIT Entrepreneurship Center One Amherst Street, Room  E40-196 Camb...
Desired Outcomes of this Meeting <ul><li>Begin a productive, and hopefully stimulating, dialogue about what it takes to cr...
Desired Outcomes of this Meeting <ul><li>Appreciate that increased speed of decision making is a fundamental underpinning ...
Technology Rate of Adoption  (1/2) 100 90 80 70 60 50 40 30 20 10 1 110 Electricity (1873) Telephone (1876) Automobile (18...
Technology Rate of Adoption  (2/2) <ul><li>Leading countries in the world have steadily improved their ability to embrace ...
Late-Comer Startups <ul><li>When an industry’s growth slows, and the shakeout begins furiously, do new startups still have...
Innovation and Entrepreneurship at MIT &quot;The ideas that drive the economy and improve our quality of life are increasi...
Examples of what CAN be taught (1) <ul><li>Teamwork creates value and success:  </li></ul><ul><li>Lone wolves build perpet...
Examples of what CAN be taught (2) <ul><li>Business Basics: CFIMITYM </li></ul><ul><ul><li>Profit vs. cash flow </li></ul>...
The MIT EDP MIT Entrepreneurship Development Program 29 January – 2 February 2007 <ul><li>Participants learn from: </li></...
Traditional vs.  Entrepreneurial Career Paths High School University Big Company Retire High School University Practical E...
Some Critical Success Factors in Entrepreneurship and Intrapreneurship <ul><li>Believe that New Ventures can Succeed: </li...
Building Your New Company <ul><li>Need an “A” Team – “3K” experience </li></ul><ul><li>Serious Technology – sustainable ad...
Selecting Your Financial Partners <ul><li>Seek  True  Value Added – “Blue” Money </li></ul><ul><ul><li>Operating Experienc...
New Ways of Thinking (1/2) <ul><li>To create a positive climate for innovation and change requires sustained top level com...
New Ways of Thinking (2/2) <ul><li>Entrepreneurial, but not anarchy. </li></ul><ul><li>Invite in outsiders (entrepreneurs)...
Walking Before Running <ul><li>Siemens, Eastman, and other large, established firms created highly successful new venture ...
Corporate Venturing Consortium <ul><li>Share Knowledge. </li></ul><ul><li>Identify Best Practices. </li></ul><ul><li>Build...
Members of the Corporate Venturing Consortium include: ARAMCO BASF Biogen Idec Boeing Danfoss Eastman Chemical Hewlett-Pac...
Latest Trends in Corporate Venturing (1/3) <ul><li>Enlightened Firms view CV as a vehicle to drive Innovation and improve ...
Latest Trends in Corporate Venturing (2/3) <ul><li>In some cases, major firms have “outsourced” a significant portion of t...
Latest Trends in Corporate Venturing (3/3) <ul><li>Recruit, Support, and Celebrate “Weird” people who are results-oriented...
Discussion and Next Steps <ul><li>Sustained improvement in national productivity depends on many factors.  </li></ul><ul><...
Upcoming SlideShare
Loading in …5
×

(GCF2007) ICT as a Driver of Innovation and Entrepreneurship

1,348 views

Published on

  • Be the first to comment

(GCF2007) ICT as a Driver of Innovation and Entrepreneurship

  1. 1. Kenneth P. Morse, Senior Lecturer and Managing Director MIT Entrepreneurship Center One Amherst Street, Room E40-196 Cambridge, MA 02142-1352 USA phone: +1-617-253-8653 fax: +1-617-253-8633 e-mail: kenmorse@mit.edu http://entrepreneurship.mit.edu 1st Global Competitiveness Forum ICT as a Driver of Innovation and Entrepreneurship (and vice versa) Outline of a Discussion Riyadh, 08 November 2006
  2. 2. Desired Outcomes of this Meeting <ul><li>Begin a productive, and hopefully stimulating, dialogue about what it takes to create a vibrant, dynamic climate for entrepreneurship in the Kingdom. </li></ul><ul><li>Discuss ICT’s key role as a driver of innovation, entrepreneurship, and high growth tech startups. </li></ul><ul><li>Discuss the key relationships and roles to be played by governments, established businesses, and high tech startups in creating a culture of entrepreneurship and steadily improving productivity. Example – be a lead customer. </li></ul>
  3. 3. Desired Outcomes of this Meeting <ul><li>Appreciate that increased speed of decision making is a fundamental underpinning to acquiring leading edge technologies and improving productivity. </li></ul><ul><li>Provide an opportunity for tough questions, followed by serious networking. Examples: Transparency…? IP protection…? </li></ul><ul><li>Consider how we might cooperate in this important endeavor in the years ahead. </li></ul>
  4. 4. Technology Rate of Adoption (1/2) 100 90 80 70 60 50 40 30 20 10 1 110 Electricity (1873) Telephone (1876) Automobile (1886) Television (1926) Radio (1905) VCR (1952) Microwave (1953) Cell Phone (1983) PC (1975) Source: Rich Kaplan, Microsoft Internet (1975) 90 80 70 60 50 40 30 20 10 0 100 Percentage of Ownership Number of Years Since Invention
  5. 5. Technology Rate of Adoption (2/2) <ul><li>Leading countries in the world have steadily improved their ability to embrace and deploy new technologies. </li></ul><ul><li>As shown in the previous graph, the number of years it took for the following technologies to reach 25% of U.S. households : </li></ul><ul><ul><li>Automobile = 56 years </li></ul></ul><ul><ul><li>Electricity = 45 years </li></ul></ul><ul><ul><li>Telephone = 36 years </li></ul></ul><ul><ul><li>Microwave = 31 years </li></ul></ul><ul><ul><li>Television = 26 years </li></ul></ul>Internet = 23 years Cell phone = 14 years
  6. 6. Late-Comer Startups <ul><li>When an industry’s growth slows, and the shakeout begins furiously, do new startups still have a chance? </li></ul><ul><li>Main Search Engines </li></ul><ul><li>Yahoo </li></ul><ul><li>Altavista </li></ul><ul><li>Excite </li></ul><ul><li>AOL Search </li></ul><ul><li>Ask Jeeves </li></ul><ul><li>Direct Hit </li></ul><ul><li>Lycos </li></ul><ul><li>MSN Search </li></ul><ul><li>Netscape Search </li></ul><ul><li>Google (late comer, but…) </li></ul><ul><li>PC Manufacturers </li></ul><ul><li>Acer </li></ul><ul><li>Apple </li></ul><ul><li>Compaq </li></ul><ul><li>Digital </li></ul><ul><li>Gateway </li></ul><ul><li>IBM </li></ul><ul><li>Packard Bell </li></ul><ul><li>Toshiba </li></ul><ul><li>Dell – late comer, with new business model: </li></ul><ul><ul><li>Build to order; </li></ul></ul><ul><ul><li>Inventory = -1 day. </li></ul></ul>
  7. 7. Innovation and Entrepreneurship at MIT &quot;The ideas that drive the economy and improve our quality of life are increasingly emerging from inventive, interdisciplinary collaborations  - across different fields and with other institutions in the public and private sectors. This spirit of openness, invention and teamwork are hallmarks of MIT and, I believe, are the keys to our future. MIT's intense creativity, passion, intensity and playfulness drive everything here--the entrepreneurial ideas, the innovations, the discoveries.” MIT President Susan Hockfield May 2005 Photo by Donna Coveney/MIT
  8. 8. Examples of what CAN be taught (1) <ul><li>Teamwork creates value and success: </li></ul><ul><li>Lone wolves build perpetually small companies. </li></ul><ul><li>Appreciation and mutual respect for different types of people guarantees better company performance: </li></ul><ul><ul><li>Excellent sales people are essential </li></ul></ul><ul><ul><li>( not lower life forms). </li></ul></ul><ul><li>Customers are the reason for your company’s existence. They need to feel they have a relationship before they will buy from you. </li></ul>
  9. 9. Examples of what CAN be taught (2) <ul><li>Business Basics: CFIMITYM </li></ul><ul><ul><li>Profit vs. cash flow </li></ul></ul><ul><ul><li>Risk is higher when you’re growing fast </li></ul></ul><ul><li>Failure is Acceptable in North America </li></ul><ul><ul><li>No such thing as winners and losers </li></ul></ul><ul><ul><li>More like: winners and learners </li></ul></ul><ul><ul><li>This positive attitude is a U.S. national asset; other societies and cultures may be different. </li></ul></ul>Is it OK to fail in the Kingdom?
  10. 10. The MIT EDP MIT Entrepreneurship Development Program 29 January – 2 February 2007 <ul><li>Participants learn from: </li></ul><ul><ul><li>“ Live case studies” of successful MIT entrepreneurs; </li></ul></ul><ul><ul><li>Our faculty and the MIT entrepreneurial spirit; and </li></ul></ul><ul><ul><li>Route 128 venture capitalists, lawyers, and institutional investors. </li></ul></ul><ul><li>In 1999, 25 participants came from Taiwan, Ireland, Cambridge (UK) , Germany, Thailand, France, & US. </li></ul><ul><li>In 2000, 65+ persons came from 10+ countries. </li></ul><ul><li>In 2001, 95+ persons came from 16+ countries. </li></ul><ul><li>In 2002, 70 persons from 13 countries. </li></ul><ul><li>In 2003, 93 persons from 9 countries. </li></ul><ul><li>In 2004, 140 persons from 16 countries </li></ul><ul><li>In 2005, 109 persons from 19 countries + storm of the decade </li></ul><ul><li>In 2006, 137 persons from 20 countries </li></ul>A one-week program tailored to the needs of future entrepreneurs, economic development professionals, and university entrepreneurship faculty and staff.
  11. 11. Traditional vs. Entrepreneurial Career Paths High School University Big Company Retire High School University Practical Experience Management Training Well Managed, High Growth Firm Startup Venture Another Startup? Venture Capital or Angel Investor Never really retire
  12. 12. Some Critical Success Factors in Entrepreneurship and Intrapreneurship <ul><li>Believe that New Ventures can Succeed: </li></ul><ul><ul><li>Parent(s) who are entrepreneurs. </li></ul></ul><ul><ul><li>Early contact with successful entrepreneurs. </li></ul></ul><ul><ul><li>Exposure to success stories and case studies. </li></ul></ul><ul><li>Gain practical, real world experience before, during and after university studies. </li></ul><ul><li>Be willing to be Unusual/Unconventional. </li></ul><ul><li>Agree to Embrace Risk, and possibly failure. </li></ul><ul><li>Want to leave a large Company. </li></ul><ul><li>Live in a society that sees the above as normal, not a strange exception. </li></ul><ul><li>Focus on speed, execution, and results. Be willing to “break the harmony.” </li></ul>
  13. 13. Building Your New Company <ul><li>Need an “A” Team – “3K” experience </li></ul><ul><li>Serious Technology – sustainable advantage </li></ul><ul><ul><li>Solve an important, valuable problem… </li></ul></ul><ul><ul><li>For clients who have money … </li></ul></ul><ul><ul><li>Who want to pay well… </li></ul></ul><ul><ul><li>With a short sales cycle… </li></ul></ul><ul><ul><li>And will buy more, soon … </li></ul></ul>YOUR VALUE PROPOSITION MUST BE COMPELLING, QUANTIFIABLE, PROVEABLE, REFERENCEABLE, AND EASILY EXPLAINABLE…
  14. 14. Selecting Your Financial Partners <ul><li>Seek True Value Added – “Blue” Money </li></ul><ul><ul><li>Operating Experience </li></ul></ul><ul><ul><li>Rolodex/Network </li></ul></ul><ul><ul><li>Awesome Portfolio (in your space) </li></ul></ul><ul><ul><li>Cool Limiteds (in your space) </li></ul></ul><ul><ul><li>Deep pockets / courage to stay the course </li></ul></ul><ul><li>Keep Realistic Expectations </li></ul><ul><ul><li>Time to Market </li></ul></ul><ul><ul><li>Revenue growth </li></ul></ul><ul><ul><li>Valuations </li></ul></ul>
  15. 15. New Ways of Thinking (1/2) <ul><li>To create a positive climate for innovation and change requires sustained top level commitment, openness about past mistakes, and focus on looking only forward. </li></ul><ul><li>Outside pressure helps: </li></ul><ul><ul><li>De-regulation/WTO </li></ul></ul><ul><ul><li>Benchmarking </li></ul></ul><ul><ul><li>Transparency </li></ul></ul><ul><ul><li>Financial disclosure </li></ul></ul><ul><ul><li>Corporate governance </li></ul></ul><ul><ul><li>Global competition </li></ul></ul><ul><li>New thinking: we’re on a burning platform… </li></ul>
  16. 16. New Ways of Thinking (2/2) <ul><li>Entrepreneurial, but not anarchy. </li></ul><ul><li>Invite in outsiders (entrepreneurs): </li></ul><ul><ul><li>Expose employees to new thinking. </li></ul></ul><ul><ul><li>Accelerate employee learning. </li></ul></ul><ul><ul><li>Benchmark internal projects. </li></ul></ul><ul><li>Advantages of single large investor: </li></ul><ul><ul><li>Patient Money </li></ul></ul><ul><ul><li>Deep Pockets </li></ul></ul><ul><ul><li>Market Knowledge </li></ul></ul><ul><ul><li>Market Presence / Distribution </li></ul></ul><ul><li>Must have commitment of CEO, CTO, CFO. </li></ul>
  17. 17. Walking Before Running <ul><li>Siemens, Eastman, and other large, established firms created highly successful new venture groups. </li></ul><ul><li>Both invested first in 6-20 excellent VC funds as a way to learn the new venture creation business, and to benchmark their own culture and speed of decision making. </li></ul><ul><li>Speed: both firms benefited from “outside pressure” to change their business processes and move faster. </li></ul>
  18. 18. Corporate Venturing Consortium <ul><li>Share Knowledge. </li></ul><ul><li>Identify Best Practices. </li></ul><ul><li>Build Institutional Processes. </li></ul><ul><li>Attract Best People. </li></ul><ul><li>Create Training Courses. </li></ul><ul><li>Communicate Consistent and Coherent Messages to Top Management. </li></ul>
  19. 19. Members of the Corporate Venturing Consortium include: ARAMCO BASF Biogen Idec Boeing Danfoss Eastman Chemical Hewlett-Packard IHI INTEL Motorola Novozymes Qualcomm UPM-Kymmene Time Warner others…
  20. 20. Latest Trends in Corporate Venturing (1/3) <ul><li>Enlightened Firms view CV as a vehicle to drive Innovation and improve Productivity. </li></ul><ul><li>Some firms remain committed to CV for decades; others stop after 3-4 years, and then restart after a few years of hiatus. </li></ul><ul><li>Committed firms are allocating significantly more capital for venture investing: </li></ul><ul><ul><ul><li>spin outs </li></ul></ul></ul><ul><ul><ul><li>spin ins </li></ul></ul></ul><ul><ul><ul><li>other </li></ul></ul></ul><ul><li>There is great potential in the Kingdom to create significant synergies between large existing firms and new frisky startups. </li></ul>
  21. 21. Latest Trends in Corporate Venturing (2/3) <ul><li>In some cases, major firms have “outsourced” a significant portion of their new product development function to local startups and the venture industry: * more leading-edge technology * faster development cycles * more aggressive people, with…. * more intense customer focus. </li></ul><ul><li>New Organizational Models are being adopted: * “Star”: actualize, empower * “Engineering”: loyal to project and team (not necessarily to the company) * “Commitment”: flat, long life, paternalistic * “Bureaucracy”: meritocracy, systems * “Autocracy”: do it my way </li></ul>
  22. 22. Latest Trends in Corporate Venturing (3/3) <ul><li>Recruit, Support, and Celebrate “Weird” people who are results-oriented, relish change, and have very fast clock speeds. </li></ul><ul><li>Throughout the CV process there is renewed passion and focus on delivering significant value to customers, from the CEO on down. </li></ul><ul><li>To deliver significant customer value, the ROI proposition must be quantified, validated, and referenceable. </li></ul><ul><li>To be most effective, and to increase the speed of decision making, excellent elevator pitches are needed. </li></ul>
  23. 23. Discussion and Next Steps <ul><li>Sustained improvement in national productivity depends on many factors. </li></ul><ul><li>Embracing and deploying new technologies is key. </li></ul><ul><li>Startup companies consistently embrace the latest technologies and innovations more rapidly. </li></ul><ul><li>Startups are usually necessary and most effective at driving productivity improvements in their clients’ businesses. </li></ul><ul><li>Through corporate venturing activities, large established firms can work more closely with startups. If they move faster, and begin to behave more like startups they will achieve great leaps in productivity for themselves, and their customers. </li></ul>

×