Ecosystem approach to start and grow innovative technology companies

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Ecosystem approach to start and grow innovative
technology companies

• Tony Bailetti, Ph.D.
• Carleton University
• Bailetti_at_sce.carleton.ca
• Vitesse OTI
• August 6, 2008

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Motivation
Serial technical entrepreneurs are regional
treasures, how to best enable them and benefit
Ottawa?

• More serial technical entrepreneurs
• Innovation is key to making money
• Innovation is distributed globally
• Harnessing innovation distributed globally
  requires cash, talent, partnerships and
  approaches/tools that scale
• Barriers to entry are lower
• ICT has made world flat
• Successful companies use ecosystem approach to
  grow

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Couple serial entrepreneurs with ecosystems and
establish keystones in Ottawa
Benefit
Opportunity
act to make market
act to align with existing market
Clarity
Time
Acting earlier results in more value created
globally and appropriated locally
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Next steps

• TFN to organize meeting with serial entrepreneurs
  and ecosystem builders
• Set economic goals
• Establish keystone of keystones in Ottawa
• Establish as many keystone organizations in
  Ottawa as it makes sense
• Ensure tight coupling between serial
  entrepreneurs and global ecosystems

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Approaches to value creation and appropriation
Model Tech transfer Cluster Ecosystem
Method Focus on research Invest to move research to line of business Pick a winning domain Invest to grow domain Align investments in distributed innovation, find mutually supportive roles, and move towards shared vision Invest in ecosystem health
Focus of patents and licenses to existing firms or spin-offs and patent process Goals of bureaucrats that make a living running 4th pillar organizations and cluster size Orchestrate innovation around the world and lever local strengths to create and appropriate value
Attributes Poor commercialization skills with high overhead Difficult to scale Weak company-academic relationships IP controlled go-to-market strategy Ineffective given investment required Static relationships Difficult to scale Slow and inflexible Fails to uncover growth niches Does not evolve co-dependence No customer empowerment Leadership role is valued and process to identify leaders is transparent Strong relationships based on co-dependence Strength from risk sharing, diversity with common purpose, and size Scalable Innovative SMEs and customers play central roles Self-adjusting and flexible
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Example
Large Competitor
Components prototype environment
1. Sandbox
Substitutes
people lead project
2. Entrepreneurial
Customers
Business plan expert
3. Commercial Services
Company
4. Knowledge Dissemination
Early Customers
Research
Whole product
5. Business Development
Orchestrator
x
x
x
x
x
Keystone
x
Members
x
x
x
x
Coral CEA Ecosystem
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Example of groups in an ecosystem
Inputs
Competitors
Substitutes
Inputs
Outputs
Company
Suppliers
Complementor 1
Intermediary stage 1
Inputs
Complementor 2
Intermediary stage 2
Leader
Influences

Customers
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Main benefits of entrepreneur-ecosystem coupling

• Aligns entrepreneurs energy with resources from
  large number of diverse companies, organizations,
  and individuals all over the world
• Combines entrepreneurs contributions with those
  of others to create significant value for
  customers
• Increases likelihood service providers and
  suppliers will share risks with entrepreneur in
  return for long term relationships
• Increases entrepreneurs legitimacy and options
  to grow market
• Increases likelihood of selling to governments
• Decreases investment to enter new markets, adopt
  and advance technology as well as raise capital
• Reduces cost of recruiting excellent teams
• Fosters collaboration with other serial
  entrepreneurs
• Provides gateways to relationships in other
  ecosystems

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Ecosystem approach requires technical
entrepreneur to

• Use communitys shared vision and then contribute
  to it
• Launch market offers using ecosystems foundation
  platform
• Compete for leadership positions in space, niche
  and governance
• Draw on talent around the world
• Develop capability to collaborate
• Incorporate ecosystem realities into
• Managing product interdependencies
• Accelerating adoption of companys products
• Raising funds
• Working with talented teams distributed worldwide
• Creating and appropriating value
• Open development and commercialization processes
  to customers

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Ecosystem collaboration is not outsourcing
Collaborate to Outsource to
Grow revenue Reduce costs
Create new assets that deliver value to customers Produce existing product at lower cost
Access skills dispersed globally, share risks Procure commodity assets
Build capabilities to differentiate offers for which customers pay Avoid investing in capabilities for which customers will not pay
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Keystone organization

• What is it?
• Advances foundation platform which anchors
  economic community
• Combined base of technologies, architectures,
  designs and assets used to build market offers
  components, products and services contracts and
  processes
• Strengthens ecosystem health
• Enables value co-creation with customers

• Benefits?
• Increases awareness of global environment
• Reduces cost and time of coordinating innovation
  and collective action globally
• Supports all stages of growth, not just the start
• Increases trust among entrepreneurs' company,
  complementors, intermediaries, suppliers and
  leaders

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• Thank you!