collaborazione , innovazione, ricerca e imprenditorialita

Copyright: Alberto Sangiovanni Vincentelli 2011

Alberto Sangiovanni-VincentelliThe Edgar L. and Harold H. Buttner Chair of EECSUniversity of California at Berkeley

Co-Founder, CTA and Member of the BoardCadence Design Systems

Comitato Esecutivo, Istituto Italiano di Tecnologia

Comitato Scientifico, CNR

Advisory Board (Walden International, Sofinnova, Innogest, Xseed (MDV))

Investment Committee (Fondo Atlante, Fondo Next)

COLLABORAZIONE, INNOVAZIONE, RICERCA E IMPRENDITORIALITA'


OUTLINE

• Collaboration, Research, Innovation and Venture Capital• Technological Opportunities driven by Collaboration and Research:

The New Innovator!


Collaborate to Innovate: the Quest for the Virtual Corporation Manager

• Firms will focus more sharply on what they do best, and they will enlist a growing diversity of suppliers for the rest. Organizations will increasingly look outside their walls not just to reduce costs but for innovation – in processes, product and service differentiation – to free up resources, transform their businesses, and facilitate sustainable competitive advantage. As supply networks become more global and complex, winning will depend on transparency, trustworthiness, and reciprocity. In a word: collaboration. (Alan McCormack et al. (HBS))

• The ideal collaboration model is the Virtual Corporation where the different firms involved in collaboration act as if they were division of the same corporation (or even better!!).


Silicon Valley: The Land of Innovation


Silicon Valley: Role of Universities


Factors in Success

Infrastructure – Legal and financial services– Excellent Universities– The simultaneous presence of large, medium and small companies– The “network”: both inside and outside company boundaries


The role of VCs in the Industrial Innovation Landscape• As a complementary lens on technological and market change

– VCs see the world differently• As a window on global technology development

– Technology is global and driven by local/regional needs• As a supplement to or portfolio hedge against internal R&D programs

– Not even the best and biggest corporate R&D can cover all possibilities• To drive new/expanded market development or other strategic (non-R&D)

objectives (Intel; Microsoft)• Explicitly to develop risky new ideas that will initially flourish better outside the

corporation (Cisco)– A form of outsourcing of innovation

• The best VCs adhere to "simple" fundamentals:– world-class leadership and team; – large, growing market; – defensible big idea; – rigorous application of best innovation practices


Risk Factors in Evaluating Startup Opportunities

• Execution Risk• Market Risk• Technology Risk• Variable Factors (dependent on sector or specific opportunity):

– Future Financing Risk– Regulatory Risk


Liquidity and Returns

• Exit options– IPO vs. M&A (see chart, next slide)– Bankruptcy vs Shut-down

• Typical venture portfolio performance: – Historical data: – Out of every 10 investments

• Half do not return capital• 1 returns >10X• Rest return 1-10X

Source: M. Borrus, Xseed


U.S. Venture Capital Investment1995–2008

28,29829,40626,44922,96822,42219,73021,941

40,609

105,140

54,102

21,10014,894

8,031 11,271

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

$ M

illio

n In

vest

ed

Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report; Data: Thomson Financial


91 92 93 94 95 96 97 98 99 '00

'01

'02

'03

'04

'05

'06

'07

'08

0

100

200

300

400

500

600

M&AIPO

Year

Num

ber o

f Iss

ues

Source: NVCA, Thomson Reuters

Venture Exits—IPOs and M&A by Year, 1991–2008


2008-2010 Exits: Heating up Again (LinkedIn Story)

[ 13 ]

Portfolio Progress

18 Companies funded

1,700+ ideas/researchers canvassed

~950 resulting start-up ideas analyzed in detail

16 Live

2Shut Down

DigitABStemCor

8 companies past seed

stage


What Drives Venture Returns?

• Market growth not absolute size• Efficiency of capital deployment• Irrational exuberance in exit markets• A handful of big winnersAnd most of all• Fundamental Innovation—The (Tech) world isn’t “flat” (next

slide). Great Universities play a role!!!

Source: M. Borrus, Xseed


The (Tech) World Isn’t Flat: Distribution of most referenced patents

Source: ATP and George Mason University

Oregon, Washington(Microsoft, IntelU. Wash, Toronto)

Silicon Valley

LA, S. Diego(Qualcomm, DefenseUCLA, UCSD)

Texas(Houston, TI, FreescaleU. Texas)

Michigan(GM, Ford, Chrysler, U. Michigan)

Illinois(Motorola,U. Illinois)

Boston(Medical, HiTechHarvard, MIT)


Consequence: VC Investment by US Region (2008 vs. 2007) California (Especially Silicon Valley) Rules!

0 3,000 6,000 9,000 12,000 15,000

CaliforniaMassachusettsNew YorkTexasWashingtonColoradoNew JerseyPennsylvaniaMinnesotaVirginia

Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report; 2008

1,5521,624

$14,264 $14,735

# ofDeeds

$ in Millions—All Results Rounded

405446

295199

164175

10097

9092

171159

4757

8194

146172

$2,974 $3,714

$1,203$1,130

$1,299 $1,469

$955 $1,382

$813$610

$708$632

$603 $819

$491$489

$499 $557

0 5,000 10,000 15,000 20,000 30,000

Top 10 Total2,0913,110

$23,069 $25,595

20082007


Human Resources in Highly Innovative Ecosystems:Meritocracy to the Hilt!

• Biggest challenge is to acquire and retain highly-skilled workforce• Play on compensation based on bonuses, restricted stock and options as

well as special claused for acquired talent via acquisitions such as earnouts and no compete agreements

• Hiring and compensation is mostly decided by technical leaders and agreed upon by HR, HR guidelines may be violated if a good case is mounted

• HR mostly focussed on internal issues: administration of the process, say on exec compensation, participate on the compensation plan set up at the Board level


Factors in Success 1

People and Technology:

• Scientific and Technology education• Centers of excellence in research• Talent pools (people form Universities and companies interested in high-

risk high-reward activities)• Ability to attract the “best” to the region (infrastructure for families and

continuous learning) but attention to moving social and financial costs


Pasteur’s Quadrant

NO YESConsiderations of Use?

Quest forFundamental

Understanding?

NO

YESPure BasicResearch(Bohr)

Pure AppliedResearch(Edison)

Use-InspiredBasic Research

(Pasteur)

D. Stokes


University-Industry Relationships

• Professors are promoted on the basis of their contributions in all areas, including professional activities

• Reciprocal respect and attention to respective roles• Unrestricted grants: “speed not patents”• Transfer of technology through visiting professionals and summer

students• Formation of new companies favored• Companies compete fiercely on talents out of University• Educational agenda left in the hands of University


Factors in Success 3:The Valley “Culture”

• Move fast• Leverage all you can • Do not be afraid of making mistakes• Learn from your errors• If you fail, try again• Re-invent yourself and your company constantly• Grow grow grow ……


Israele

Sistema scolastico e

universitario di eccellenza

Cultura orientata

all’innovazione e alla crescita

globale

Imprenditorialità

• Più alto numero di Nobel pro capite (più che tutta l’area euro)

• 4 università nelle top 100 in scienze- N° 3 in pubblicazioni scientifiche pro

capite- N° 1 in laureati pro capite

• Più di 1.700 laureati all’anno in Life Sciences

• Più alto numero di aziende quotate al Nasdaq dopo USA

• Più alta spesa di R&D sul PIL

• PIL 1948-2008: x50 (come Cina, >Giappone, Corea)

• Global view

• Più start-ups dopo USA (più seed investments di USA in valore assoluto)

• Quasi 100 VC, ~10 miliardi di dollari under management

• Governo imprenditore (Yozma, incubatori, Life Science VC)


90 KM: Stesso

Range as in Silicon Valley

Herzliyya

Tel Aviv

Gerusalemme

Haifa

23


Italy Innovation 40-60% below comparable nations

EU 27 “European Innovation Scoreboard”

0,35

0,50 0,55

Source: European Community:“European Innovation Scoreboard 2008”


)

R&D Gap is in the Private Sector

Fonte: Intesa Sanpaolo, Servizio Innovazione della Divisione Corporate su dati OECD 2005 - The Economist - August 2007

R&D as% of GNL

0 1 2 3 4

Italia

UK

Canada

Francia

Germania

Stati Uniti

Giappone

Svezia

Private Companies State and P.A.


Why should we worry about High Tech?

SUNRISE INDUSTRIES?SUNSET INDUSTRIES?

Innovation and high tech can be as high in New economy as in old economy! Process vs Produc!


OUTLINE

• Research, Innovation and Venture Capital• Technological Opportunities driven by Collaboration and Research:

The New Innovator!


The Enabling Technology: The Emerging IT Scene

Infrastructuralcore

Sensory swarm

Mobileaccess


Predictions

• 5 Billion people to be connected by 2015 (Source: NSN)• Web2.0

– The “always connected” community network• 7 trillion wireless devices serving 7 billion people in 2017

(Source: WirelessWorldResearchForum (WWRF)– 1000 wireless devices per person?

[Courtesy: Niko Kiukkonen, Nokia]

EE Times,January 07, 2008


The Birth of Societal IT Systems:

Complex collections of sensors, controllers, compute and storage nodes, and actuators that work

together to improve our daily lives


The Cloud

• A multi-year tectonic and disruptive shift• Proprietary Bottoms up analysis leads to $100bn opportunity• Themes driving the shift:

1. Cloud and Mobile…made for each other2. Cloud interoperability3. Security as a Service4. Mega-bandwidth and Intelligent Networks5. Collaboration & Social Networking6. Platform as a Service7. Private Clouds: Old wine in new bottle


The Cloud!• Going back to centralized computing from distributed computing…like utilities• Delivering personal (e.g., email, word processing, presentations) and business apps

(e.g., sales force automation, customer service, accounting) over the internet via a subscription model.

• Cloud computing has been made possible by the shift to Internet built on Web-based standards and improvements in hard drives, processors, and Internet speed

• Transfer of capital, implementation and maintenance risk


Massive Resources are Virtualized


Challenge of Integrating Intermittent Sources

34

Sun and windaren’t wherethe people – and the current grid – are located!

www.technologyreview.com

T. Boone Pickens Wind Farm


The Big Switch: Clouds + Smart Grids

Computing as a Utility

Computing in the UtilityLarge-scale industrializationof computing

EnergyEfficient

Computing

EmbeddedIntelligence in

CivilianInfrastructures


Energy + Information =Third Industrial Revolution

“The coming together of distributed communication technologies and distributed renewable energies via an open access, intelligent power grid, represents “power to the people”. For a younger generation that’s growing up in a less hierarchical and more networked world, the ability to produce and share their own energy, like they produce and share their own information, in an open access intergrid, will seem both natural and commonplace.”Jeremy Rifkin


Towards Integrated Wireless Implanted Interfaces

[Illustration art: Subbu Venkatraman]Power budget: mWs

to 1 mW

Moving the state-of-the-artin wireless sensing

ADCLNA

electrodes

DSP

memory

Tx

regulator

clock


Engineering Tomorrow’s DesignsSynthetic Biology

The creation of novel biological functions and tools by modifyingor integrating well-characterized biological components intohigher-order systems using mathematical modeling to direct

the construction towards the desired end product.“Building life from the ground up” (Jay Keasling, UCB)

Keynote presentation, World Congress on Industrial Biotechnology and Bioprocessing, March 2007.

Development of foundational technologies:Tools for hiding information and managing complexity

Core components that can be used in combination reliably

38


idi

Microbial Synthesis of Artemisinin

AcCoA

AcAcCoA

HMG-CoA

Mev-P

Mev-PP

IPP

PMK

MPDMK ispA

HMGS

atoB tHMGR

DMAPPMev

FPP

AMO

ADS

CPR

Artemisinin

Off-the-shelf parts?

BioShack

39


A Roadmap for Synthetic Biology

• An educational program (Berkeley (lead), Harvard, MIT and Stanford)– To train the next generation of bioengineers

• A research program– To determine how to set standards– To learn how to develop standard components

• A BioFAB– To construct biological components and offer them open source

• Applications

40


Applications of Synthetic Biology

Energy Crop• Water saving• No fertilizer• Doubled photosynthetic efficiency

Biodiesel and biojet fuel• No compromise• Fully compatible with existing infrastructure

Natural product drugs• Capture all of the chemistry in nature• Construct a microbe that can

produce any natural product

41


Amyris

• Amyris had its technological foundation in 2001 in the Keasling lab at Berkeley, when Jay Keasling and his team of post-docs pioneered a methodology to produce isopentenyl pyrophosphate, at rates with commercial potential, from yeast-fermented sugars.

• Keasling’s magic bug, genetically enhanced from a soup of DNA obtained from bacteria and the plant world, is a five-carbon base chemical and a high-value target in the world of what is now known as the field of renewable chemicals — its a path to isoprenoids, which are themselves a family of some 50,000 molecules that have applications or pathways for pharmaceuticals, fragrances, cosmetics and fuels.

• Keasling filed the patent in 2001, and Amyris itself was eventually formed and funded by 2006 with $14.1 million in Series A investments from Kleiner Perkins and Khosla Ventures among other early backers.


• IPO in 4° Quarter 2010• From 680Mil cap to 1.265Bil today


The SCIENCE-Application Dilemma

Raffaello Sanzio, The Athens School


Teamwork!!!


Educational Challenge

46

collaborazione , innovazione, ricerca e imprenditorialita

Documents

role of universities

collaboration act

innovationthe best vcs

risk factors

market changevcs

silicon valley

role of vcs

newexpanded market development