Culture for InnovationCulture for Innovation
Thomas LynchThomas Lynch
CEO/founder Reasoning TechnologyCEO/founder Reasoning Technology
Presented at NTUPresented at NTU
2013-12-202013-12-20
Thomas.Lynch@reasoningtechnology.comThomas.Lynch@reasoningtechnology.com
www.thomaswlynch.comwww.thomaswlynch.com
background video from: https://goo.gl/Rejg6O
Cosmic voyage - the power of ten

Innovation In AsiaInnovation In Asia
Thomas LynchThomas Lynch
CEO/founder Reasoning TechnologyCEO/founder Reasoning Technology
Presented at NTUPresented at NTU
2013-12-202013-12-20
Thomas.Lynch@reasoningtechnology.comThomas.Lynch@reasoningtechnology.com
www.thomaswlynch.comwww.thomaswlynch.com

About Mr. Lynch
●
Participated in the design of a dozenParticipated in the design of a dozen
microprocessors variously as individualmicroprocessors variously as individual
designer, tools developer, manager, anddesigner, tools developer, manager, and
architect, [ including the Am29000 (test),architect, [ including the Am29000 (test),
29050 (12 instructions, fp support), Sonic29050 (12 instructions, fp support), Sonic
(clock and smart card interface), Am187(clock and smart card interface), Am187
(device library analysis), Am486, K5 (t-func(device library analysis), Am486, K5 (t-func
develop, tech management), K6 (fp testdevelop, tech management), K6 (fp test
platform), K7 (fp and tech management), aplatform), K7 (fp and tech management), a
PIC variation, Neptune, Chromatic FP,PIC variation, Neptune, Chromatic FP,
Quicksilver radio node (entire processorQuicksilver radio node (entire processor
architecture, logic design, and tools) ].architecture, logic design, and tools) ].

About Mr. Lynch
●
I've had a consulting practice since 1996I've had a consulting practice since 1996
where I have worked with the startupswhere I have worked with the startups
Quicksilver Technologies and NetEffect.Quicksilver Technologies and NetEffect.
Developed microcode for ChromaticDeveloped microcode for Chromatic
Computers. Created intellectual property forComputers. Created intellectual property for
startups and for Intellectual Ventures.startups and for Intellectual Ventures.
Created business plans including for EnreagleCreated business plans including for Enreagle
and 21st Century Telephone. I proposedand 21st Century Telephone. I proposed
smart phone technology in the 90s, andsmart phone technology in the 90s, and
social media technology in the early 2000s.social media technology in the early 2000s.

About Mr. Lynch
●
29 issued patents in the U.S. with a29 issued patents in the U.S. with a
number of related international filings,number of related international filings,
and a similar number of activeand a similar number of active
applications. These area of: computerapplications. These area of: computer
security; digital rights management;security; digital rights management;
social media (relationship rings); highsocial media (relationship rings); high
performance computing architecture,performance computing architecture,
logic, circuits, and packaging; userlogic, circuits, and packaging; user
interface, and telecommunications.interface, and telecommunications.

Current Projects
●
Reasoning Technology – a new intuitiveReasoning Technology – a new intuitive
way to apply theorem proving toway to apply theorem proving to
arguments in law.arguments in law.
●
New Memory Architecture -New Memory Architecture -
●
Implications to databases (developingImplications to databases (developing
db)db)
●
Implications to processor architectureImplications to processor architecture
●
Computer SecurityComputer Security
●
A better way to limit viruses and otherA better way to limit viruses and other
OS security threatsOS security threats
●
New Media Compression AlgorithmNew Media Compression Algorithm
●
New Discrete Optimization AlgorithmNew Discrete Optimization Algorithm

What Is Innovation?What Is Innovation?
InventionInvention
IngenuityIngenuity
CreativityCreativity

An innovation is simply something new and not
seen before.
A good innovation is something that improves
people's lives or pleases them.
We are going to talk about profitable innovations,
i.e. those make the innovator money.

Companies which survive in the fashion industry
innovate profitably most every season.
Famous artists of all ilks are often known by
their innovations.
Innovations are rare in religions and the practice
of ancient arts.
In this talk we focus on innovations that affect
the profitability of technology companies.

Tech Sector Innovation
Business Processes (Productivity)
Manufacturing
Product Design
Product Attractiveness
Product Ordering and Distribution

Where Art/Fashion Fits In
Making the product and/or packaging appear
more attractive or pleasing to the buyer.
In simulating the company's vision for the future
(capturing the dream for everyone to see).
In marketing communications, including website
design and advertising material.

The Magnitude of Innovation
Disruptive Innovation – creates new a new market
typically one which displace old ones.
Surprising Innovation – takes competitors by surprise,
captures most of the existing market, may be so
interesting as to expands the existing market.
Sustaining Innovation – makes a company more
competitive while leaving the distribution structure and
market in tact.

Why We InnovateWhy We Innovate
Market ShareMarket Share
ProductivityProductivity
New MarketsNew Markets

Buckminster Fuller:
'Technology enables us to have more with
less.'

Roger's 'Diffusion of Ideas'

0
revenue
First to Market
Everyone Else

Disruptive Innovators are First To Market
make the most money the earliest
define the product under its company name
creates the brands
establishes the intellectual property
(others must license)
Disruptive Innovators Rule!

revenue
Disruptive Innovator
Sustaining Innovator
Price and Margins (commodity) Player
total revenue drops as
price falls through floor
and/or customers find
a new product/version
time

Disruptive Innovation Companies Typically Don't
emphasize on Keeping Costs Minimum, but rather they
emphasize getting a product out.
Sustaining Innovation Companies are Typically Very Good
at Making Improvements At Somewhat Lower Cost
Commodity Companies Have Very Low Costs and
Margins. Features will be Old Hat. If the Revenue curve
levels off then these companies make revenue for a long
time

Continuous Surprising Innovation
time
revenue

Continuous Surprising Innovation Carries
Customers to Better New Models
Requires a Vision with a Technology Road Map that
remains confidential, or that the competition cannot
follow along.
Sustaining Innovator Can turn into a Surprising
Innovator, mitigated by intellectual property.

What We Should Invent
Things that make profit
Things that replace expensive imports (not inexpensive
ones)
Of apples and shirts ..

About Innovators and StartupsAbout Innovators and Startups
RiskRisk
WorkWork
PayoffPayoff

Would You Hire This Person For Your Startup?
As a young boy his teacher said he was:
“too stupid to learn anything.”
As a teenager he burned down the family barn. He was publicly
whipped for it. He would later start a fire on a train. He said both
were accidents.
He was dismissed from his first two jobs for being unproductive.
He often failed and admitted it.
[http://www.cbsnews.com/pictures/celebs-who-went-from-failures-to-success-stories/6/ misc.]

Thomas Edison:
“I haven't failed. I've just found 10,000 ways
that won't work.”

Carl Bass CEO Autodesk:
“Innovation is about taking risks and
breaking the rules.”

Steve Jobs CEO Apple:
“People who are crazy enough to think they
can change the world are the ones who do.”

Fact:
One of our ten startups succeed.

Chad Oliver:
“In any aborigine group there will be a headman. The group will typically
Periodically meet and form a circle to discussion issues. However, there will
invariably Be one guy who sits to the side doing something else. The rules
just don't apply to him.”

Charles Goodyear
Sold the furniture from his house and put his family in boarding so that
he could work on vulcanizing rubber in a laboratory in an attic for five years.
One of his children became sick and died, perhaps as a result.

Traits of Innovators
– Work on things they think are interesting or deem
important while being oblivious to everything else.
● Ignore rules
● Ignore risks
● Go without pay
● Incredibly persistent
– Fail often.
– Well educated if for no other reason then constantly
working and researching.
– Are creative.

The Culture of Innovators is a Frontier Culture
Frontier People accompany strangers to
a place they have never been and work
with others, without pay, to build a legacy
because they care about their families and
friends.

Working Class ValuesWorking Class Values
God JobGod Job
Avoid RisksAvoid Risks
Family FirstFamily First

Educated for Working in the FactoryEducated for Working in the Factory
– School looks like factory with students lined upSchool looks like factory with students lined up
in nice patterns and teacher inserting parts.in nice patterns and teacher inserting parts.
– Emphasis on Following the Rules and ConformingEmphasis on Following the Rules and Conforming
(as all machine parts must)(as all machine parts must)
– Teacher as Authority FigureTeacher as Authority Figure
– Students disciplined for not staying on curriculumStudents disciplined for not staying on curriculum
(not to be confused with Confucian system of(not to be confused with Confucian system of
civil service exams)civil service exams)

When I was in second grade, I invented a new way to
subtract numbers. Instead of subtracting I “added the
difference from 10 and threw away the carry”.
51 51
-27 ==> +73
-------- -------
24
I explained it was better because you only had to know
differences from 10, and didn't have to learn a new
algorithm.
It differed from the curriculum she had taught for
years, and though I consistently got the right answer
she didn't understand how that could be. Confusion
then changed to anger. My teacher became very upset!
I was punished.

●
Think about your family.Think about your family.
●
Get a real job with a big stable firm.Get a real job with a big stable firm.
●
Don't ask too many questions.Don't ask too many questions.
●
If you are not getting paid for yourIf you are not getting paid for your
work you're being robbed.work you're being robbed.
●
Fight to win. (view most group workFight to win. (view most group work
situations as competitive not co-operative).situations as competitive not co-operative).

Working Class Values is a Military Culture
Conformity and following rules is important
for the functioning of the system. By following
well designed orders from those who have
earned positions of respect we all survive.

Culture ClashCulture Clash
God JobGod Job
Avoid RisksAvoid Risks
Family FirstFamily First

Work for a big company Work for a no-name startup
with 9/10 chance to fail
Don't ask questions Brainstorm and Dream
Follow Directions There are no directions,
it hasn't been done before
Don't break the rules Break the rules
Play it safe Take risks
Don't let the boss rob you
by not paying for your work
Work because you love the
topic and hope equity will pay
later (chances are 1/10)
Comfort and safety Roller coaster ride

Ideas Easy to Kill
● Ideas are sand castles any one can shoot one
down.
-example of the UWI sign proposal

Innovators Lose in Turf Battles
● Ideas are easy to shoot down, so the innovator
can show no value.
● Innovation proposals are always further out in
the future.
● Innovation progress is not measurable.

Phases of a Company
mature

Not the ideal, but perhaps too often the case:Not the ideal, but perhaps too often the case:
●
Seed StageSeed Stage – Innovators slave for free, management– Innovators slave for free, management
is nilis nil
●
Growth StageGrowth Stage – Innovators applauded, management– Innovators applauded, management
concentrates on marketing the techconcentrates on marketing the tech
●
IPO stageIPO stage – Innovators may not fit in with new– Innovators may not fit in with new
management as it becomes a 'conventional company'management as it becomes a 'conventional company'
●
Mature stageMature stage – Managers are the top of their class in– Managers are the top of their class in
business school, they know their business and wantbusiness school, they know their business and want
to beat the competitors, disruptive innovatorsto beat the competitors, disruptive innovators
represent risk and a threat to their own jobsrepresent risk and a threat to their own jobs

Current ProgramsCurrent Programs
God JobGod Job
Avoid RisksAvoid Risks
Family FirstFamily First

In TaiwanIn Taiwan
– 163 Colleges and Universities163 Colleges and Universities
– 98 have innovation incubators98 have innovation incubators
– 11 corporate funded incubators11 corporate funded incubators
– Many R&D achievements fed into industryMany R&D achievements fed into industry
– Familiar with building cities were there were none (frontier mentality)Familiar with building cities were there were none (frontier mentality)
– Strong SME presenceStrong SME presence
– Government policy support, Industry Technology Research Institute,Government policy support, Industry Technology Research Institute,
APEC Center for Technology Exchange and Training, Small MediumAPEC Center for Technology Exchange and Training, Small Medium
Enterprise AdministrationEnterprise Administration
*University-Industry Business Incubators, Wang, Hung & Wang, Open Journal of Business and*University-Industry Business Incubators, Wang, Hung & Wang, Open Journal of Business and
ManagementManagement

Incubators US and InternationalIncubators US and International
http://blog.launch.co/blog/
complete-list-of-incubators-and-accelerators-like-y-combinat.html
There are many ..

Inno Grant Program at EPFL Switzerland –Inno Grant Program at EPFL Switzerland –
seeding startupsseeding startups
– Offers professors $150,000 to make theirOffers professors $150,000 to make their
research commercially viableresearch commercially viable
– Feeds these results into incubator building nextFeeds these results into incubator building next
door to the universitydoor to the university
– Incubator matches up Swiss companies withIncubator matches up Swiss companies with
research projectsresearch projects
– Modeled on the MIT Despande Center IncubatorModeled on the MIT Despande Center Incubator
grants for commercialization of researchgrants for commercialization of research

Google 20% ruleGoogle 20% rule
●
Google employees were allowed to workGoogle employees were allowed to work
one day a week on independentone day a week on independent
projects, which resulted in such thingsprojects, which resulted in such things
as gmail.as gmail.
●
The program has now been cut back.The program has now been cut back.

Lower Grade Education ChangesLower Grade Education Changes
if the video doesn't show/play, see this link: http://goo.gl/n2fzU2

Proposed ProgramsProposed Programs
God JobGod Job
Avoid RisksAvoid Risks
Family FirstFamily First

University 'Do' ClassesUniversity 'Do' Classes
●
Students contribute to free softwareStudents contribute to free software
projects for class credit – like the oldprojects for class credit – like the old
Berkeley model.Berkeley model.
– NTU language compilersNTU language compilers
– NTU database codeNTU database code
– NTU linux versionNTU linux version
– NTU ray tracerNTU ray tracer

University Interdisciplinary CoursesUniversity Interdisciplinary Courses
– Business schoolBusiness school
– Law schoolLaw school
– CSCS
together to do projectstogether to do projects

●
Industry Guest Lectures – Industry guyIndustry Guest Lectures – Industry guy
prepares a lecture on a subject he worksprepares a lecture on a subject he works
on and gives it to a classon and gives it to a class
●
Industry Guest teaches class or assistsIndustry Guest teaches class or assists
in lab classin lab class

●
Teach Brainstorming as a class at theTeach Brainstorming as a class at the
University level – counters the 'think tooUniversity level – counters the 'think too
much' effectmuch' effect

●
Professors visit perhaps teach on daysProfessors visit perhaps teach on days
in lower school classes, often enough toin lower school classes, often enough to
know the students and their talents –know the students and their talents –
counters the 'teacher authoritarian' andcounters the 'teacher authoritarian' and
'suppressed talented student' effects.'suppressed talented student' effects.

●
Greater awareness of social bullying –Greater awareness of social bullying –
counters the 'kick the sand castle' effect.counters the 'kick the sand castle' effect.

● Participants in the incubator are working
for the sponsoring industry in name until
the incubated company takes off, or if it
fails, the person goes to work for the
company proper
– Gives the employee credibility with the parents
– Gives the employee a landing pad in case the
incubated company doesn't make it.

● More contract request work for designs,
programs, etc. – a website market place
for placing and buying contracts. Allows
small businesses to thrive.

● Website market place for patents where
the patent license is standardized – that
way buyers can 'pick-and-use'
immediately.

http://www.dailymail.co.uk/travel/article-1334659/Taiwan-Travel-Taipei-Baisha-Beach-Kenting-National-Park.html