Ep. 90: PARC CEO on how tech innovation worksThe CEO of PARC talks with Rafe Needleman about the history of the famous lab, how to encourage innovation in a country or a company, and what it's like to compete with Google for engineers.
-- this is -- people -- from CNET welcome to another episode -- reporters roundtable our weekly show on a single tech topic each time. But today we're talking with doctor Steve Hoover CEO of park the Palo alto research center -- Park is a research lab started by Xerox in the 1970s. The -- gave -- ethernet it gave us the laser printer. He gave us object oriented programming and -- gave us the alto one of the first desktop computers today we're talking with doctor -- about what's happening at park. The state of innovation in Silicon Valley about patents that education about the innovators dilemma and other really interesting topics -- before that. -- battle app tour led by doctor Hoover. This is a solar energy technology. And the benefit of this technology this is it's silicon PD technology but -- take technology there's two fundamental approaches. You can have. Just -- cells which take light in converted to electricity. The problem is that with PV or -- -- is it's expensive just to square a square centimeter silicon. This is a concentrated technology's there the ideas how -- take the light of a broader area and concentrated them in an error area and use less so. But of course if you had more money by in media servers and focusing elements and you -- in -- and -- -- -- We were able to develop some fundamental approaches to do that generation to do that focusing technology in a really low cost way and that the circuit board. And the a silicon are closely designed and integrated together all the imaging elements. And that's what this is about -- today. Again it's a successful business. These are now installed crops and process so what we take up. A walk down the hall rate and what I can do -- -- take in the lab. -- in this room. So this. -- -- Hoods -- here if we can deal with. Dangerous materials. Also on the Charles. Partners. Team. You're doing an inconvenient and it in the past. And other. Important problem in -- world. We -- And its -- to be bigger and bigger a bigger problem. And so. What we've come up -- a pretty innovative technology for clean water it literally put a stream of water in its third. And we put it into this -- in this too. And also it does is run through this. Circular channel and outcomes of these two to one side. Water and ones that we do this at very low pressure -- low energy and the physics is very different. And it turns out that there are velocity radiance differences. Over a particle wit how fast the water moves. And if you design the channel sized just right and you design the velocity just right. Those forces those differences and velocity. Articles. But once I've yet there we talked earlier about the challenge with batteries and mobile -- -- And so the fact that do this -- low energy is very important we talked about. Ubiquitous computing and how it -- you know make computing personal and make it invisible and make it everywhere and the great thing about that is you've got lots information. The bad thing about that is you've got lots information how do you make sense so that they have no action is creating this information -- And understanding the context where -- focus of attention is now and then helping you get the information that's useful. What's parks relationship with -- are you finding them hiring explorers are taken interest -- are you an Angel investor venture capitalists what's written that work for the sake. I wanna do that. With my start how to like coming here. Okay so we have -- we actually have a program called arc arc. And we. Solicit startups who have a good idea and but being that -- partnership with park. Could really improve the opportunities for success. And we encourage them to tell us why and and and and to make a proposal. And in other reality is you know I'd venture capitalists -- a lot of pitches -- fund a few weeks aero lot of it is and we support. Mentioned is actually one that came out of park. That we were doing some fundamental work and ubiquitous computing and actual computing. And really saw this idea how to bring it into a mobile client helps people integrate this information streams. And that. Integrates calendar mail system that's that are in one client and -- -- information. And right now we're about to release really the first. Version of the product that's ready to go into Internet in private beta and -- -- that'll come out over the next six weeks. And we believe it's gonna be pretty powerful and usage -- scale and then you'll who will will be out already out opportunities fees but hopefully -- and talk in terms and for funding to grow with. Xerox is -- -- for thanks so much make a conference -- you're showing us around the lab how is that you landed here at park. So. I I spent. -- -- -- And really. Knew I wanted to be in research that wanted to work a little bit so I worked for awhile. Variety a couple of companies including doing some consulting and in December -- graduate school and graduate school Carnegie Mellon and then ended up at Xerox and East Coast and got involved in a variety of research and innovation positions at Xerox and was a collaborator and partner and really customer parks from Xerox for four years. Ended up leading research group in the East Coast -- -- up leading engineering efforts -- electronics and then win them. -- CO retired. They like -- -- -- customer and asked me to come on mountain and and becomes the -- -- children yet you got here and I was happy and that's been since February since February best best thing -- ever I love it here. So. And when it comes to technology park has always been in kind of it's the development along with -- -- ME -- to the the -- pure technology laps down here in Silicon Valley. Kind of looking over the bustle of what's going on outside the walls all the little startups coming going FaceBook Google Apple -- -- someone does little the little start -- some of them. Pop up. Most of them don't this. But lately we have not heard much from park it's not in the news the way it was merely days. Why is that what's happening here. So. I am the about. About nine years ago major transition. Park and we had been like now like -- competent like bell labs a corporate research. Really a cost center there to serve the needs. Of that corporation. And not used to be changed. And and what's different is we are a wholly owned subsidiaries are so there are owners but we're setup it's not -- -- -- -- I -- only provide internal research services for business -- in the business nation. Xerox's my largest customer but they're less than half of our business. Over half of our businesses. Start -- other large industrial companies selling -- And so frankly it took us about three or 45 years to figure out how to make that model work. But. We've really. Got that model figured out now so now you see is coming out with some of that technologies that -- -- -- out in. Clean tech and solar that we talked about in startups and compact -- intelligent -- how to network prisoners here. Not so much -- -- companies are really focused on. Services services information and get -- how outlet in your working and water purification. And solar technology. How does that mesh with Xerox which owns you out right. Well so there's two things what what. Xerox. Set -- up this ways independent business. For reasons and and and and they want us to be successful whatever that takes. And it really is I think in many ways the right model for the 21 century. Research that as we know today that the -- not open innovation. You gotta go to where the best ideas. You gotta make sure the idea -- you're working on our current and at the forefront. And so buyouts staying out at the cutting edge ahead of areas where -- of interest -- We need to think we keep we do we get great people as we give them great opportunity you've got an idea here it doesn't matter whether. Xerox once they are not in -- corporate research lab in matters here. If you can -- -- somebody else and get funding that you can work -- That really attracts a different kind of people different caliber people. Class of people and Xerox gets the benefit from the other as we are out and -- And if you're good research lab you're always out -- the current businesses that you support that's how they generate accurate distances the problem is. The main business only picks up whatever 10% of those ideas. And they really want high quality and -- at the forefront so the fact that were out doing. Keeps -- at the forefront some of those helps -- directly as they say hey that's great talked about -- an idea which which Iraq is actually the Angel that -- Other ones that's fine they don't we still make money on it. And Xerox benefits in that way. And going back history and realize you've only been here for a couple months but you work -- Europe for awhile. In the early days of part park and invented the -- Yet the first one of the first if not the first personal computer but -- -- IBM that meet the business personal computer a product. Why did it -- way why wasn't wire wire weighs in the zero speaks. -- -- Xerox actually did make a product. Line -- -- but. -- its business model was to do enterprise sales and integrated systems so it sold it as part of whereas IE and network -- -- the software we're gonna Italian. The the the whole system. Different business strategy. You know in the end. Didn't work as well but on the other hand if you notice something IBM -- in personal computing. These days these days either in fact that's one that's one of my points earlier -- Good research labs keep people out at the forefront beyond their current businesses sometimes it just doesn't make sense for -- in my company. -- capitalize on because of all the other investments. So you go out and capitalize on yourself and that's who we are -- Now one of the things about the IBM PC He talked about Xerox integrated solutions and IBM and in back when -- -- Person -- that with its business as well. Whether it clearly is also the answer -- yes that exact moment that an attorney and one that -- one of the key choices they made with the PC was to open up. The architecture yet and publish the specs and create. An open environment. And I wanted to ask you about your views on the importance. Of open standards. And open technology. And how it affects things in the valley and you were not -- let's talk about palm O. So I think I think. It's -- really important area and in many areas. Its it requirements -- work. For example were working on. As you know we optic creek -- ethernet here -- the reasons that the team is cause. We did an open standard. But companies that spun out of here 3COM. We're successful because they added value on top of that standard but for something somebody's network people they need that open standard. Because they're afraid of the vendor lock it. So we're working on a new technology new fundamentally new technology called content centric networking. And actually we have we're sponsoring the -- first open source conference that next month. -- are called CC acts because we recognize you've gotta have a core framework. For things like networking technologies that's open but people were at the cutting edge technology on top of that open standard -- a lot about. And then the whole world it's because the world gets. The new technology. And companies still have an ability to make money on how does Europe Sen and by extension park win when you develop a technology -- You -- patent it and licensing what is the world -- so often. You'd do you'd need to patent it. Because in fact that you need to protect somebody else -- -- Lot of there's a lot patent -- -- at the -- and patent something and you know frankly the US PTO. Patent techno the Patent and Trademark Office. You know they get a lot applications in just because you get a patent acts that doesn't mean it's ballot but then approve it in court that meals. In its patent is -- invalidated existed before grants actually can create open standard. -- you should patent it and then. Transfer the patent in its users. -- I have to ask you what's happening right now in the world patents and we've -- it seems that we've got nuclear arsenals of patents being built up. Google's acquisition of Motorola mobility their patents Apple Nokia deal -- Kodak's patents on the blocks we don't yet have with with. HP as they restructuring -- out there PC business but what as a company that literally creates patents. -- but what you think of what happened. Patents today. So. I think. Patents have a valid have a -- place in that they really are intended to protect. Expect the inventor give people and give people when it's active in -- in practice. So I think there are. The I think the biggest problem is that. The US PT I was overwhelmed and so easy patents that are created that maybe should have been. And then you see companies out there who were set up actual companies -- set up. Simply to leverage that -- leverage the legal system so my opinion. You know there are aspects of it that that are getting views that we've gotta be careful not throw the baby out. With the bath water here. Because the idea of a patent is a really really sound idea so I think there are patent reforms that need to happen in the area. You know and and actually US US has been the only place that has. The -- several patents are all -- first to file. US is focused on first to invent a really hard thing to prove. Who who invented it first I thought of it here is so creates a lot of legal Chris a lot of work for lawyers doesn't create a lot of value in the systems I think the reforms like that the. Com. Let's talk about the state of innovation valley can -- has been sitting above -- -- for for many years. You use whether through bubble one point -- an hour and bubble 2.0. -- -- your take on. The processes of starting a business based on innovation when you think of the entrepreneurs that you're seeing now maybe they apply to work here or not. How's it different and it's been. Well so so. One of the big differences I think. It's a lot easier to start -- from cost you know from a cost. Means I don't -- after markets there have been start ups. And you know we we do -- -- -- here we just had a one of the leaders in that area. -- -- here for a four for a -- And I think. I think there are some really good strategy there and and actually we've. So so the cost is lower for a couple reasons one it's just the technology enables -- I can buy it and by hosting space. I've got open source stacks. That I can -- opera companies on. And this idea of -- start up. There really is how I get the minimal outcry at the simplest thing out as quickly as -- to learn in the -- to learn in the market. That's -- that's -- radar idea and makes for a lot more efficiency but also means you know there's a lot more things that pop up. And then you got to separate the you know though -- though that we from the chaff. And you have to be careful. That. There again you don't throw the baby out with the -- -- are some things. You know they some breakthrough things are long complex and hard and you've gotta get. If -- middle if you're creating a incremental invention dentist knew about product can be relatively easy to find -- disruptive invention. And that takes a little more time and effort -- So speaking of which entity if you have an idea -- new technology or just an idea on how to build a business -- -- business processes something you can come here. You could with the top -- -- -- talked view yet could go talk to -- commentator and Friday it in part part of that program. Could take their idea or or their their skills to Google. -- so you're competing for the best and brightest engineering minds here and how do you separate out from sale -- commandeer partner's part of the Google FaceBook and Apple. And -- people come here to this cure lab and do the work here we're looking for so. We are we are looking for people who first of all are technically skilled -- school. Com we are looking for people who are -- -- net which means they understand you know the business customers. What. The difference that we -- when we compete He really -- is how to compete for people with you which we did. It's one of the great things about this model that I talked about -- again. If you are work in a research labs in grew older system -- -- labs you know that election work on something that eventually if they don't think it's gonna make sense for Google is say yeah not so much. Here you gotta work on something else we say. Go find. Someone to fund. And we'll help -- And if you can get that idea of fun that you can find the partner you can make the startup happen if you can find the commercial client and will support network so we find. That's there really interest in environment for people who were innovative and love their ideas and are passionate about them cause we don't put those constraints. If you can make it successful and you know we give you some support then we can can then you can continue to work -- And so -- In the area where we have technical competence but if you've seen today in we have technical competence from things like. Yeah energy to contractual computing so it's pretty broad -- that really attracts. -- of people here that are pretty powerful. Now you have of course Xerox a multinational company has a client as one we want -- -- you have government agencies military and other government agencies clients yes you. -- what is happening in innovation and entrepreneurship. Across the -- How are we doing here today. In the US in terms of maintaining our -- as inventors. Yes I'm so companies district is to make sure when these there's we have a lot of multinational companies -- and leader of via. The US. I have I have I have a couple of concerns so I got my apartment -- -- -- and -- back -- in the early ninety's and you know the universe the US university systems have been recognized. As for decades as about best in the world and what that meant -- we attracted the world -- -- so that meant you know when I was in graduate school. Half the people were from the United States and half the people were from across the world in you know what they state here. And those people created you know many -- things that you see it out and out in the valley today our immigration policy today. Does not encourage those best -- the brightest to come here. The educated here a lot of them go back and the reason they go back if it -- you know the places they come from -- right which is great. And and they should grow and I'm glad to see that but why we don't make it easy for them to stay if they want to do. Is beyond me and so that's one I think the US education system. And you know frankly the -- system there. So much attention in schools is put on sports I think sports -- great. Teams are wonderful thing for kids and and we should all have those experiences and I you know and I adamant and -- wonderful. But you -- -- -- many of my friends and you know they're they're focused on target's culture from -- on sports -- universities give ten times the money for academic merit. But we don't celebrate those kids in the same way so one thing I'm personally involved with. Is first robotics I don't know if you're familiar with that as Dean Kamen I think really has the right we've gotta make technology and innovation exciting -- it. And make it as vibrant and dynamic sports -- And give them the feedback from that and really make that part about it's it's -- I'll tell you when I go to Germany when I go to Japan when I go to China when I go to India those things are valued. More richly and more deeply here so I'm I'm concerned you long term it's actually. I go I've been to -- just in Vancouver BC I've been to Ireland Sweden. Taiwan. Atlanta at all over the world and the question that. Working with -- groups of people say we want to build Silicon Valley here yes. -- what is it about Silicon Valley that is so hard to replicate -- at the sunshine. Tax system. Is at the beach -- what what is it that there. Not that we have a beach. So are. -- -- It's like networks right you know that that there there's there's you know network effects right where. Once you get and why open standards -- -- support -- -- then you get a critical mass of of device design network talk and other than somebody else wants to put their device and network -- there's other things there. So there's a set of people here who know hiding -- know how to create start ups and so. It's much easier to do here you've got you've got the -- here you've got the lawyers here you can go -- you know everybody you know. Half -- everybody you meet has been in a start so you can learn. A lot from those things that infrastructure you can utilize so it's really hard to say. On just gonna start it because that critical mass of that network effect is here so we have a real advantage and we've got to continue to elaborate. Who's who of all these other emerging. Technology centers what do you think is coming closest to -- China has not figured out yet. But. Man when they decide to do something they just do it and so. IAE RIE. I don't see it yet it's you know we -- Pay attention. In India frankly. India has not figure out but there's -- vibrancy. You know there's a lot there is more freedom frankly and in India and and I think that's one acres -- so China decides to create things and they can create the environment. But it's still a little more directed and India you've got a lot more freedom and and there's a vibrancy and again I don't see it there yet but. I act I I think I think we need this. We -- not sit well. Speaking of sitting on laurels. Businesses try to encourage innovation all the time yet it is incredibly difficult within a large. Company -- corporation to be a real innovator innovators dilemma that it. As part of Xerox at park and you must study that what what would -- would you have for somebody whose work and -- job and engineer maybe not and engineers like. I want to change the world right how do you do with in. A business. The biggest advice I give people -- when we talk about this is it you know in. My sense is real simple. It's a contact sport so you you gotta understand. It's not enough to have the idea. Go out and talk to customers. There's -- I have I have worked on system you know in you know. Areas that have. Created new businesses in -- Xerox and in my past. And I got a -- because I want talked customers interviewed cannot I had this one video clip of customer talk about technology and and I would. I would just sort if you said He had let the customer tell. -- -- So much more powerful than -- and so first it's context worked out the second is its contact -- terms of decisions understand. Who will make decisions. To fund things. And you know frankly it's not always as obvious as -- -- Right the sort of what's the structure that it's here and or chart but who's really the influence there and go in influence -- And so part of your strategies are few and this is true for any start -- You don't only have to have the technical strategy you -- have a market strategy customer view and you gotta funding stretch her go and get money. So if your entire company it's the same thing the funny strategy well generally it's so funny to -- the decision makers where the criteria they use. Who are the people they trust that they asked for a price for. I would literally make lists of those things and those people and then go and you don't work that. You know and if -- -- who's my -- I tap my network who knows them how to they get arrogant in their door. How to I don't credibility with them so -- can't export understand the customers understand your funding model and process. Understanding unwritten part of -- not just written part of it and a lot of work. I have to ask you about emerging technologies that things that are -- right now and -- in this in this bubble. Mobile technology. What's next big thing. I I think the next big thing He news. -- and -- computing. Wii mote mobile you know mobile is is just another example of ubiquitous computing in the information explosion. So I've got all of these we talked about a little earlier when shared to some technologies we're working on for the -- forest in mentioned. It's a really big problem of how to make sense -- information. And the idea that there's a context in which -- -- my social context the information I've talked about simple examples that documents I've opened. In -- -- streams across FaceBook email tax. That. Area is I think a hotbed of opportunity and it's in fact forced by the social trend in the -- -- trends and forces it to be a it's a problem because not that the average exposure to their ports and opportunity. I've heard one opportunity described as a mobile social local is one thing there you -- you see it as one thing or separate problems. I think those things come together because. The idea is how I get context -- -- that's I think again the big the big framing. The big framing is -- -- computing what's people's contacts and how do you give them the information. And the decision aids. It's appropriate to their contacts now an interview with you that's a different context when I'm in a meeting with an internal meeting it's a different context win and at home at night with my kids. And -- -- on the web look and for our next trip to Disney World. So. Building agents that can observe that and learn that that's the opportunity and it just -- the convergence of local mobile. And social just went -- in. -- computing. It's it's an enabler. And it's an import and it -- in the context of mobile. In particular because you don't like everything in your mobile device in us how to write that out -- -- leverage the cloud. Is important enabler to really take software -- a service you -- to the next level entry utility computing. So if it's an important sort of infrastructure. Technology. You know but but its infrastructure technology it's what -- gonna do with it. Energy especially as -- released information -- The it's it's it's a really good question -- -- but He understands how much -- energy now's it's in there -- right the infrastructure. And I think and things like cloud computing. -- make that worse but it's nonsense because you really now have these you know buildings full of servers. Much easier to me in -- actually the energy utilization and so. So how to make cloud computing. You turn the server -- the protected by a car where -- -- it turns off to cylinders. And runs on six or I have a hybrid -- the engine gas engine turns -- -- office. To take that same idea like a cloud computing which servers are -- which are off which -- -- down -- to all that. That's a great area we actually it's one of one of the areas -- -- -- startups -- -- So finally. You know if if I am an entrepreneur or. And a or in -- in innovator and -- or something and I'm looking at what's happening in the valley and I've got Google wanting to hire me or FaceBook or. As -- -- what's the pitch I mean Heidi convinced me and I need to come it worked at Xerox I got park sorry yet. Verses. Any of these other well funded Angel -- it starts. That. The biggest difference is what I said earlier it is if you've got the idea and the passion. Wherever it takes -- We can support. If it's a good idea and if you can make it successful. We're not gonna limit you in the way that -- other organizations are and you're gonna be an environment where where. Technical quality and excellence matters. And for a lot for people and our feel that they wanna know. That's the -- that's the basic funeral -- heart rate technically accident the icing on the cake is the piece that. And you do outreach programs theory -- people can learn more about the stuff. Absolutely so we've got please come to our website and we've we've got -- -- to learn about what we do today information about the startups -- program. All all sorts of things and we. We you know we believe in participating in you know in the in the community we. We host our form we start that act in nineteen since seventh hopefully the public we bring different speakers in areas in the chance to get to -- -- little -- -- -- Steve -- thank you so much great thank you that's --