The Best Time for Innovation?

SRI International, the renowned innovation factory, shares its recipe for technology research and development success.

New technologies aren’t typically built in a day or even weeks, but after years and sometimes decades of research and development. SRI International has fine-tuned a technology development process that serves the research needs of clients such as the U.S. government and Apple. Over the years that process has produced what became the first computer mouse and the digital voice command technology now known as Siri. It may appear to be magic, but according to the man who leads the non-profit research institute, it all boils down to talented people, agreeing on the meaning of innovation and unwavering discipline for turning innovations into viable businesses.

Innovation Guru Curt Carlson CEO and president SRI International

"The problem is finding a viable way to make a business out of it. People have lots of ideas and those ideas morph and go through transformations. Oftentimes the hardest part is coming up with that business model," said Curt Carlson, CEO and president, SRI International.

SRI was established by Stanford University in 1946 as a center of innovation to support economic development in what would become Silicon Valley. It became independent of the university in 1970 and today is one of the largest contract research institutes in the world. SRI holds more than 1,000 patents and has incubated and spun off scores of ventures such as Intuitive Surgical and Nuance Communications.

Curt Carlson, the CEO and president of SRI, and Bill Mark, its vice president of information and computing sciences, recently appeared at the Computer History Museum in Mountain View, Calif. to discuss innovation. John Markoff of the New York Times, fresh off a Pulitzer win, moderated their conversation, which was part of the museum’s “Revolutionaries” series sponsored by Intel.

Carlson and Mark pointed out areas of innovation to watch, including education, biotechnology and ubiquitous computing along with a rapid evolution of user interfaces. After leaving the stage, they sat down for an interview to discuss the importance of a framework for successful innovation, the decades-long process behind Siri and how a shortage of talented people is leaving billion-dollar opportunities on the table.

What is the state of innovation in Silicon Valley today?

Bill Mark: It’s popping. Silicon Valley has been and is right now a hugely innovative space. There’s just all kinds of things going on that you’re going to be hearing about for the next decade.

Not to downplay that enthusiasm, but innovation is a word that’s hard to escape these days. Is the term overused?

Curt Carlson: I don’t think it’s overused. I don’t think it’s used precisely. There should be agreement within the company about what it actually means. Some people say it’s an idea or its something novel or it’s an invention and to us [SRI International] that’s not what it is. Innovation, to us, is the creation and delivery of new customer value in the marketplace with a sustainable business model for those who are producing it. We spell it out. People almost always forget the sustainable business model part of it. If it doesn’t have sustainable value for the company, it’s not innovation. It may be a smart idea, but it doesn’t do the company any good.

Creating sustainable business models is essential for SRI, so how do you know the right time to move research into the product phase?

Mark: The research that led up to Siri had been going on for decades — the research into speech, artificial intelligence, and artificial agent technology. What happened in that case was that a colleague of mine at SRI — Norman Winarsky — and I saw a disruption in the world of mobile telephony. The disruption was that voice revenues were going away and data services had not yet picked up. Everybody knew that. Our premise was that the reason that data services weren’t being used was that it was just too hard to use them. There were great data services out there, but they were just too hard to use. We thought that if you could have a spoken interface not just to do things like searching but to actually do things, to use those services via the mobile phone, things would take off. That’s how we knew the time was right for Siri, but even then it still took more than 2 years to get the value proposition right and get it funded.

Innovation Sage Bill Mark vp of infomarmation and computing science SRI International

"Silicon Valley has been and is right now a hugely innovative space. There's just all kinds of things going on that you're going to be hearing about for the next decade," said Bill Mark, vice president of information and computing sciences at SRI International.

So with a product like Siri that’s decades in the making, how do you decide whether a new technology is ready for prime time?

Carlson: In my definition of innovation I stress a sustainable business model. People have lots of ideas and those ideas morph and go through transformations. Oftentimes the hardest part is coming up with that business model. In the case of Siri, the 3 years we spent incubating it were not for the technology, not for the product so much — we knew how to do that — it was “how do we make money with this company?” That was the hard part. We had to piece lots of things together. We had to wait for the infrastructure to build so that we had a way to create a viable model for it.

At a place like Intel or SRI it’s inevitable that people will be early because they’re always thinking out 5 or 10 years just by the nature of what they do. So it’s having a disciplined process where you can incubate these things and where people know that the goal is not to form a company but to form a viable company. It’s easy to form a company, but forming a good solid company takes diligence. You have to stick to the fundamentals and you have to be convinced that you have a viable business model. That’s the hard part.

Some have criticized Silicon Valley, and particularly app- and advertising-centric businesses, for working on “small” problems instead of tackling “big” problems. Is that a valid critique?

Mark: I think some of Silicon Valley is focused on big things and there’s a difference here because some of the things that some people might think of as small can be very lucrative. So they’re big in the sense of monetization and I don’t blame anybody for focusing on things like that. However, I think that other parts of Silicon Valley, including SRI, are very focused on problems that we think are important to humanity going forward.

How big a barrier to innovation is access to talented people?

Carlson: The need for great people who have the passion and skills to do these things — that’s what’s slowing us down. How many billion-dollar opportunities are there in the world right now? One, 10, 100? It’s got to be thousands. They’re just sitting there and all it requires is a group of people with the right skills to identify them and put together the solutions to make them happen. That’s by far the limiting factor in my mind.

The Best Time for Innovation?

SRI International, the renowned innovation factory, shares its recipe for technology research and development success.

New technologies aren’t typically built in a day or even weeks, but after years and sometimes decades of research and development. SRI International has fine-tuned a technology development process that serves the research needs of clients such as the U.S. government and Apple. Over the years that process has produced what became the first computer mouse and the digital voice command technology now known as Siri. It may appear to be magic, but according to the man who leads the non-profit research institute, it all boils down to talented people, agreeing on the meaning of innovation and unwavering discipline for turning innovations into viable businesses.

Innovation Guru Curt Carlson CEO and president SRI International

"The problem is finding a viable way to make a business out of it. People have lots of ideas and those ideas morph and go through transformations. Oftentimes the hardest part is coming up with that business model," said Curt Carlson, CEO and president, SRI International.

SRI was established by Stanford University in 1946 as a center of innovation to support economic development in what would become Silicon Valley. It became independent of the university in 1970 and today is one of the largest contract research institutes in the world. SRI holds more than 1,000 patents and has incubated and spun off scores of ventures such as Intuitive Surgical and Nuance Communications.

Curt Carlson, the CEO and president of SRI, and Bill Mark, its vice president of information and computing sciences, recently appeared at the Computer History Museum in Mountain View, Calif. to discuss innovation. John Markoff of the New York Times, fresh off a Pulitzer win, moderated their conversation, which was part of the museum’s “Revolutionaries” series sponsored by Intel.

Carlson and Mark pointed out areas of innovation to watch, including education, biotechnology and ubiquitous computing along with a rapid evolution of user interfaces. After leaving the stage, they sat down for an interview to discuss the importance of a framework for successful innovation, the decades-long process behind Siri and how a shortage of talented people is leaving billion-dollar opportunities on the table.

What is the state of innovation in Silicon Valley today?

Bill Mark: It’s popping. Silicon Valley has been and is right now a hugely innovative space. There’s just all kinds of things going on that you’re going to be hearing about for the next decade.

Not to downplay that enthusiasm, but innovation is a word that’s hard to escape these days. Is the term overused?

Curt Carlson: I don’t think it’s overused. I don’t think it’s used precisely. There should be agreement within the company about what it actually means. Some people say it’s an idea or its something novel or it’s an invention and to us [SRI International] that’s not what it is. Innovation, to us, is the creation and delivery of new customer value in the marketplace with a sustainable business model for those who are producing it. We spell it out. People almost always forget the sustainable business model part of it. If it doesn’t have sustainable value for the company, it’s not innovation. It may be a smart idea, but it doesn’t do the company any good.

Creating sustainable business models is essential for SRI, so how do you know the right time to move research into the product phase?

Mark: The research that led up to Siri had been going on for decades — the research into speech, artificial intelligence, and artificial agent technology. What happened in that case was that a colleague of mine at SRI — Norman Winarsky — and I saw a disruption in the world of mobile telephony. The disruption was that voice revenues were going away and data services had not yet picked up. Everybody knew that. Our premise was that the reason that data services weren’t being used was that it was just too hard to use them. There were great data services out there, but they were just too hard to use. We thought that if you could have a spoken interface not just to do things like searching but to actually do things, to use those services via the mobile phone, things would take off. That’s how we knew the time was right for Siri, but even then it still took more than 2 years to get the value proposition right and get it funded.

Innovation Sage Bill Mark vp of infomarmation and computing science SRI International

"Silicon Valley has been and is right now a hugely innovative space. There's just all kinds of things going on that you're going to be hearing about for the next decade," said Bill Mark, vice president of information and computing sciences at SRI International.

So with a product like Siri that’s decades in the making, how do you decide whether a new technology is ready for prime time?

Carlson: In my definition of innovation I stress a sustainable business model. People have lots of ideas and those ideas morph and go through transformations. Oftentimes the hardest part is coming up with that business model. In the case of Siri, the 3 years we spent incubating it were not for the technology, not for the product so much — we knew how to do that — it was “how do we make money with this company?” That was the hard part. We had to piece lots of things together. We had to wait for the infrastructure to build so that we had a way to create a viable model for it.

At a place like Intel or SRI it’s inevitable that people will be early because they’re always thinking out 5 or 10 years just by the nature of what they do. So it’s having a disciplined process where you can incubate these things and where people know that the goal is not to form a company but to form a viable company. It’s easy to form a company, but forming a good solid company takes diligence. You have to stick to the fundamentals and you have to be convinced that you have a viable business model. That’s the hard part.

Some have criticized Silicon Valley, and particularly app- and advertising-centric businesses, for working on “small” problems instead of tackling “big” problems. Is that a valid critique?

Mark: I think some of Silicon Valley is focused on big things and there’s a difference here because some of the things that some people might think of as small can be very lucrative. So they’re big in the sense of monetization and I don’t blame anybody for focusing on things like that. However, I think that other parts of Silicon Valley, including SRI, are very focused on problems that we think are important to humanity going forward.

How big a barrier to innovation is access to talented people?

Carlson: The need for great people who have the passion and skills to do these things — that’s what’s slowing us down. How many billion-dollar opportunities are there in the world right now? One, 10, 100? It’s got to be thousands. They’re just sitting there and all it requires is a group of people with the right skills to identify them and put together the solutions to make them happen. That’s by far the limiting factor in my mind.