Don't Spend Billions on a Metaphor

It is not best that we should all think alike; it is a difference of opinion that makes horse races. Mark Twain


Horse racing has been on my mind. Not because I particularly like horse racing, or know much about it, but because I listened to a Lockheed Martin executive describe their new product development system as a horse race.

Only, this exec claims, that instead of paying for all of the horse at the beginning of the race, they pay by the yard. As soon as you felt the horse wasn't going to win, you'd stop paying for it.

The exec meant that Lockheed Martin had implemented stage-gate, a process made famous by Cooper in his 1986 book "Winning at New Products". Apparently it took Lockheed Martin 25 years to discover what most large research intensive companies had already implemented........ and abandon.

On the surface, it sounds reasonable. Try to kill a new research project as soon as possible by finding its fatal flaw early, before it costs lots and lots of money. If it survives all attempts to kill it then it must be a good idea.

So let's revisit the horse race to test this stage-gate, kill the bad ideas fast concept. If a horse is in last place midway through the race, should we give up on him? What about the horse that is in first place a hundred yards out of the start, is he the winner? A frequent and exciting moment in a horse race is one coming from far back in the home stretch and winning by a nose.

Much like a horse race, it's hard to be certain that a new product idea is fatally flawed until almost the end of the race! Much as Twain's quote, the opinion on which horse (product) will win differs by the person, but a majority opinion doesn't make a winner.

But let's extend the horse race metaphor further. The costs really aren't in the race, but the events leading up to the race. And the prize isn't really the purse at the end of the race (although it can be a nice chunk of change), but the way in which the horse is genetically marketed after.

Perhaps breeding is the first step in creating a winning horse, like basic research. Then picking the youngsters which appear physically fit and training them is applied research. Racing them could be considered the product launch. Putting the winner out to breed is the mature product being mass marketed.

So, Mr. Lockheed Martin executive, why don't you buy your horses after they have won?

It could BE different if you did.

It took ten years, and that was just to get started

Adopt the pace of nature: her secret is patience. Ralph Waldo Emerson

It seems like a great idea, bring together a few biomedical research universities with entrepreneurs and investors, provide them with laboratories and offices, maybe a little government backed risk capital, position a person who can speak all of their languages to create a fuzzy interface....and poof, you have a biotech industry!

As simple as that, it's a proven formula from Boston to Qatar. Just don't expect it to happen in a few years or even a decade.

Yesterday I had the pleasure of touring the yet to be opened New Orleans Bioinnovation Center. Located just a short walk from that more famous institution, Bourbon Street, the Bioinnovation Center has about 60,000 square feet of laboratories, offices and conference facilities.

As Aaron Miscenich, president of the center, walks me through the building he describes its purpose. It is the physical structure which ties together entrepreneurs, angel investors, venture capitalists, university researchers and their ever vigilant tech transfer offices, non-profit assistance ranging from finance to business planning. Doing so will result in more start-up biotech companies and growth of a high paying industry sector for New Orleans.

It's all text book. Travel to Boston, Pittsburgh, Philadelphia, San Diego or dozens of other cities around the world and you will find the same thing. You will also find that it has worked.

So it's a proven model, but it took 10 years (maybe more) from the initial planning phase to the point where the building is almost open for operation.

Why so long? no, it is not because New Orleans is living up to any sort of undeserved reputation. You'll find that it takes just as long no matter where it's done.

It isn't that $50 million plus or minus $10 million to build the facility is a lot of money. Sure, it's a lot of money if it is in my bank account, but for a city the size of New Orleans? A new football stadium costs 10x that!

I didn't ask Aaron for all the details but I'm guessing his story is not dissimilar to my experience. First, there's the feasibility study...or actually, the raising the $100k+ from the Economic Development Administration (EDA) to pay for the study and convincing someone local to pay the matching funds. Then there's the bid process for the feasibility study; doing the study; reporting on the study; obtaining public comment on the study. Lots of studying just to say, sure the idea could work.

Once you have a study you can go back to the EDA and ask for planning money. And find someone local to match that money (with non federal funds!). After a few years of studying and planning you'd be ready to raise some money to actually design the facility and hopefully even build it.

But it's been a few years now and the people who originally had the idea are off doing something else. The new people involved decide the project should occur in a different place or with a different purpose. So you make due with what you have, spend a lot of time modifying it to meet the new leadership interests and another year slips away.

Now, you can finally raise $50 million! But from where. If you follow the government financing path you will find that there is no established program (federal or state). So you are headed down the earmark process. Put down two years at least before you see that cash and can actually pay an architect.

Of course, you could do more traditional financing, but banks aren't so wild about your business plan to lease space to companies with no financial history and that are likely losing money. Even if you could pull it off, the cost of capital will be high compared to government funding where the capital is, well, free.

Add in a few years to actually build the facility....it could BE different sure - if you can wait a few decades!

Who invented the light bulb?

Opportunity is missed by most people because it is dressed in overalls and looks like work. Thomas Edison

In the 70 years before Edison, there were at least two dozen inventors of the light bulb. As did each of his predecessors, Edison greatly increased the life of the bulb and decreased the cost. But others dramatically improved upon Edison's design and the incandescent bulb we recognize today was invented by William Coolidge.

Edison had a much greater contribution to the light bulb then its design. He invented an entire system for electrical distribution. Or, more properly, he took dozens of other people's inventions and integrated them into a power plant, transformers, light bulbs....

When he started all of this, it was obvious that it would work. All of the pieces had been demonstrated. That said, it was a tremendous undertaking to integrate and modify them in a cost effective manner.

There were also constant improvements to be made. For example, Edison held dozens of patents for electroplating because he needed improved processes to join the bulb's filament with electric wires.

He also had to displace the gas torches and pipelines that already ran through cities. Political deals, business deals and questionable deals were all a part of 'inventing' the light bulb for Edison. There are many anecdotal stories of sabotaging gas lines, bribing public officials and creating gas torch fires that while perhaps untrue, certainly add flavor to the story.

For Edison, it could BE different, required 99% perspiration.

Creating change

"An invention has to make sense in the world it finishes in, not in the world it started. " Tim O'Reilly


Follow the links to read more about how Tim O'Reilly changed the world of computing by starting as a technical manual publisher to being a driving force in Open Source Software and Web 2.0, not necessarily by being the guy with the big idea, but rather being the guy that enabled it to happen.

Tim O'Reilly

O'Reilly Media

While hundreds of techies had proven that 'open source' would work, that 'web 2.0' would work, it wasn't really 'happening'. O'Reilly, seeing this, pulled them all together and forced the change by adding structure.

As silly as it may sound, much of that structure was just giving it the name Open Source and Web 2.0, creating a conference, then letting the technical folks at the conference figure out what that really meant.

O'Reilly is a classic example of a way to drive change. It's being in a position to see that it could BE different and then putting it into a framework that brings others to embrace the change.

Why

I'm a tech entrepreneur, so it naturally follows that I....

bought an iPhone two years after they came out
print out documents to read
haven't bought a green anything
bought a plasma TV many years late
have yet to experience blue-ray
discovered facebook only because my students made me
and may one day understand why people like iPads

Yet, everyday of my professional career, I've gone to the office and tried to force change. Usually by beating my head against something and not often to my own benefit.

But the changes I've forced are a lot like the technologies that I finally adopted - they were well proven and I had little doubt that they would work. They had worked in a different industry or under different circumstances, but the risk to adopting them for my specific needs was small.

So I've never had to lay claim to an original idea to drive change. Rather, I've looked around the world, noticed what was happening, what was changing and said with confidence

"it could BE different"