Is it really smart to share a bright idea with a competitor?

Entrepreneurs need to move away from trying to safeguard their ideas in favour of open collaboration with others who may eventually end up as their competitors, according to the head of one of the world’s most famous independent research institutes.

Stephen Ciesinski, president of SRI International (formerly Stanford Research Institute), the research and development centre based in Menlo Park in California that is responsible for hundreds of ground-breaking technology inventions including the computer mouse and the Siri voice assistant, also warned about the low number of patents that make it out into the world as marketable products.

He was talking to The Irish Times on the fringes of the EY CEO Retreat to San Francisco, a week-long trip that saw more than 80 Irish entrepreneurs recently descending on Silicon Valley.

One of the attributes of the Valley is that people are not afraid to share ideas with each other

“People need to get over the whole ‘someone might steal our idea’ concern. There is a saying in the Valley that ideas are cheap and that it is all about execution and it really is the case. Obviously ideas are important but if you think about some of the biggest innovations over the years, a lot of them have derived from ideas that originally belonged to others who either didn’t have the courage to go forward with them or the wherewithal to execute them,” said Mr Ciesinski.

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“One of the attributes of the Valley is that people are not afraid to share ideas with each other. You and I could be competing eventually but if we share information then we both walk away smarter. Yes, I’m giving away some critical data but I’m also getting a lot in return. We’ll fight it out in the marketplace down the road but in many cases we’re all trying to build up a marketplace so that, above all else, is critical, “he said.

Leaders

SRI International employs more than 2,100 people, nearly half of whom have advanced educational degrees and many of whom are considered renowned leaders in their fields.

The institute, which performs client-sponsored R&D as well as licensing its own technologies, holds more than 4,000 patents.

SRI has been responsible for major advances in networking and communications, robotics, drug discovery and development, advanced materials, atmospheric research, education, national security and more.

Moreover, Doug Engelbart, an engineer at the institute, led what was subsequently termed "the mother of all demos" when, in 1968, he introduced the first computer mouse, video conferencing, teleconferencing, hypertext, word processing, hypermedia, object addressing, dynamic file linking and a collaborative real-time editor in one 90-minute session.

In 2016, SRI was awarded a $150 million contract to provide development and manufacturing support for promising HIV-prevention products, while last month it landed a $12.5 million contract to address vulnerabilities in biometric security systems.

According to Ciesinski, who in addition to leading SRI’s strategy is also an active angel investor and who previously held executive roles at a number of companies, only a tiny number of patents make it out into the world.

“We’re talking about maybe 1 to 3 per cent of all patents that are filed. It is a very low success rate,” he said.

“At some point as an industry we’ve got to become more efficient. The low success rate doesn’t mean that a lot of know-how doesn’t make it out into the marketplace but it is indicative of how much of a hard business R&D is, and how much of an achievement it is when something makes it out,” he added.

Recruitment struggle

SRI's president, whose son Zack works at Stripe, the fast-growing online payments firm established by Limerick brothers Patrick and John Collison, said the institute struggles to attract talent.

We measure ourselves more on our impact than our financial results, but still the latter can't be ignored

“There are no share options here but we do have a wonderful facility and we don’t put researchers under the same sort of pressure they would be under in a public company. People working here have a higher mission, which is to do good for society, so it its about more than just production,” said Ciesinski.

The institute, which has experienced strong growth in recent years, draws in about $500 million a year in revenue. It is now looking to grow this but Ciesinski is adamant that money is not the be all and end all.

“We measure ourselves more on our impact than our financial results, but still the latter can’t be ignored. If we’re not growing then someone is at our expense so we need to continue to be an organisation that conducts ground-breaking research and which can then partner up with a company to successfully exploit it,” he said.