Monday, June 25, 2012

Purpose and Mission

In our single-minded drive toward profits, one of the first casualties is sometimes purpose. I long ago observed that passionate people who start out fighting for what they believe in sometimes find themselves believing in whatever they are fighting for. If we're not careful to assess and reassess our mission and how our actions move toward or away from that purpose, we may inevitably drift leeward at the mercy of the winds.

Why are we in this game in the first place, and what do we wish to accomplish? Some would reply: profit, of course, it's only business. Hm. I really wonder, how many people go to their graves lamenting that they hadn't focused enough on making more money, that they hadn't succeeded in increasing their company's profit margins during the last quarter? It seems there must be more to life than that.

Cresswell Walker recently posted a letter from Lagos, Portugal to The Economist, published in the June 16, 2012 print edition. Due to its elegance and concision, I quote it in full:
Would it be too cynical to pose the same challenges for companies that you posed for robots? I thought Isaac Asimov's three laws seemed particularly germane to both: protect humans, obey orders and preserve themselves, in that order. It seems corporations have them in reverse: preserve themselves, obey orders (follow the law) and protect humans.

Failing as we do to elicit moral behaviour from organisations, which are made of people, how can we hope ever to succeed with machines?
It is true that a company cannot accomplish its mission if it falters as a company, just as a politician who fails to get elected forfeits their influence over legislation. Is a politician able to recover from a campaign that compromises principle? Can a company accomplish a worthy mission by sacrificing the humanity of its leaders and employees?

The task is to hold onto principle and purpose, while achieving success. Anything less is unworthy of the effort.

Saturday, June 16, 2012

Acquiring Entrepreneurship

I've notice a lot of advice lately for job seekers to ascertain what skills are being sought by companies, then set to work acquiring those skills. There's a good deal of chatter in the political economics domain about schools being reorganized to address the skills gaps companies identify.

What a different way to look at things. It's interesting to me the implication that those job-seekers who hesitate to learn new skills in this way are too lazy to get a job. Underlying this is the presumption that somewhere out there, outside ourselves--in the hands of HR professionals and hiring managers--is the description and definition of an ideal career, and all we need to do is remake ourselves to match that ideal. It reminds me of "The Stepford Wives". Not my ideal!

One aspect of this that may easily be overlooked is that the skills pre-identified by companies, HR departments and hiring managers are likely those required to maintain the status quo. They may be known and proven, but they are unlikely the skills needed to make breakthroughs and foster innovation.

As an entrepreneur, I've worked to understand my talents, and passions, my skills and interests. The aim has not been to acquire skills that others have identified, but rather those that serve my purpose. Where my talents are weakest, the choice has been between learning new skills myself or relying on others to supplement those areas, always driven with my own goals in mind.

I have joked that my weakness as a job candidate, my inability to convince others to hire me, led to my entrepreneurship. If noone else will give me the job I want, then I'll just have to create it myself. I begin to understand that the worldview that underlies that attitude is what has prevented me from becoming a good employee and has driven me to be the entrepreneur that I am.

Monday, June 11, 2012

SBIR Eligibility at Time of Proposal

In the SBA's current proposed Policy Directive for SBIR, they propose a change in the time of eligibility determination. During the recent Navy Opportunity Forum, David Metzger addressed his concerns about this change. I confess this is the first time I've heard him speak on matters of SBIR when I differed with his view.

The proposed change (Section 121.704--When SBA Determines Size and Eligibility) states that the current regulations determine eligibility only at the time of award, whereas other SBA government contracting programs determine eligibility at the time of proposal. Their intention is to bring these separate determinations in line, and to provide a date certain to small businesses to ensure they are eligible at the time of proposal.

Metzger's contention is that this would reduce the number of SBIR eligible firms that are created. Here's why: Let's say you're a professor at a university, or a mid-career engineer or scientist in industry. You've got an idea that responds to a need or requirement for an SBIR. You prepare the proposal, while retaining the comfort and security of your "day job", with the intention of jumping ship or spinning off should your proposal be selected. By that view, determination at the time of award allows someone in a comfortable position to risk less because non-selection would mean merely that they keep their jobs.

While I'm sympathetic to the idea that lowering the barriers to business creation is in general a good thing, what David fails to acknowledge is that many research entrepreneurs don't have the luxury of a secure professorship or corporate paycheck. SBIR is strongest in providing seed-capital and direction to support great ideas that might otherwise languish, regardless of their source. Truth is, those of us most committed to building a long-term sustainable business based on innovative R&D are not cowed by the risks involved in striking out on our own. It is those hungry entrepreneurs who will remain most committed to seeing their ideas through, while many of those coming from industry or university settings may simply fold and return to their pre-SBIR status at the earliest sign of trouble, e.g. "the valley of death," possibly conducting the research, but failing to commercialize the results.

Even if they do succeed at commercialization, here's a scenario that I am not sure SBIR was intended to foster: Let's say you're that mid-career corporatier; you propose to an SBIR agency, and get selected. You take a leave from your post, spend six months or a year on Phase I, get selected for Phase II, and spend another couple years developing your technology. Towards the end of your Phase II, you make some phone calls to your old employers, pitch the new technology to them. They like that the government has paid your salary for a few years and has taken all the risk of the early-stage out of the picture. You've identified a transition customer, so your old company agrees to acquire your company, and hire you back.

The risk has been reduced for the inventor, who moves from the comfort of a secure job, to the temporary certainty of a government contract or grant. After a few years, the ostensible small business is simply reabsorbed into the large corporate structure. How is that different from the government simply contracting directly with a small division or team at a large prime? I've nothing against such an arrangement, and don't argue that innovations can't arise this way.

I simply don't believe that that is the greatest strength of the SBIR program. When I started my firm, I was three years out of my PhD, had spent most of that time applying for faculty posts (~150 in all), and finally gave up the hunt for an academic job in exchange for working full-time to make my R&D vision a reality. I'm far better at research than applying for jobs. Without SBIR, my company never would have survived, and I might be pumping coffee at Starbucks.

The issue is how best can the federal government spend its precious resources to support and stimulate transformative innovations that otherwise would never see the light of day. The safe and comfortable professor or corporatier if they're committed to them will likely pursue their interests regardless (as they already have access to more than 95% of federal R&D investments). Let's leave SBIR to drive innovations where they might otherwise never have a chance.

Saturday, June 9, 2012

Seeking a Model

I've written before about Pixar. It's an inspiring tale about a handful of dedicated dreamers, seeking a means to transform computer generated imagery, with the aim to produce a feature-length animated film entirely of computer-generated graphics. After more than two decades, they accomplished that vision, and today the technology is ubiquitous. They began life in 1974 as a team of researchers at the New York Institute of Technology under Ed Catmull, absorbed by George Lucas' Computer Division at Lucas Films around 1979, purchased at a fire sale by Steve Jobs in 1986, then eventually acquired by Disney.

E Ink is another firm that started with a bold vision to transform a field. E Ink Corporation started in 1997 as a spin-off from the MIT Media Lab. In 2006 Sony adopted E Ink's ePaper display, followed in 2007 with Amazon's launch of the Kindle also with E Ink's electronic paper.

The difficulty with these models is that the first was driven by the profligate investment by a series of billionaires caught up in the vision (or oblivious to it, depending on your point of view): Alexander Shure; George Lucas; Steve Jobs. Alvy Ray Smith (one of the original team of researchers, and an eventual founder of Pixar) has called these three "accidental visionaries". The second was a spin-off from a prominent lab at a storied university that attracted large sums of venture capital early on ($15.8m when it was a year old, and another $37m two years later).

What then is a bootstrap entrepreneur to do, whose innovations don't result from a hefty investment by an institution of higher learning, that doesn't immediately attract the interest and funding from deep pockets? That is the dilemma. I've come to realize that many models exist to follow for an entrepreneur whose ideas are quick to the market and straightforward, where a clearly defined product is the first order of business.

But what of innovations like computer graphics or electronic paper? These are platform technologies, visionary, transformative. They involve the creation of something entirely novel, not merely the repackaging of existing technologies. Their potential is far greater, and wide-reaching, but the case for investment is more convoluted. The models for a Research Entrepreneur in such a field is rather difficult to find. Finding or establishing the path is the journey and task I have embraced.