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NASA’s Phoenix explorer spacecraft, about to begin digging into the surface of Mars, has a major lesson for innovators. Sometimes you find the best ideas in the junk pile of discarded failed ones. Here is how the New York Times describes the process that led to the Phoenix’s rise, literally, from the junkpile ashes:

In NASA’s “faster, better, cheaper” era, two landers of almost the same design were built: Mars Polar Lander and Mars Surveyor 2001. The Mars Polar Lander disappeared as it tried to land on the planet in December 1999, NASA’s second Mars failure that year. After an investigation showed shortcomings in the spacecraft design, the Mars Surveyor 2001 mission was canceled, and the spacecraft was put in storage. 

In 2002, Peter H. Smith of the University of Arizona proposed taking the mostly built Mars Surveyor 2001 spacecraft, which was to have landed near the equator, and using it to land in the northern arctic plains of Mars. NASA gave the mission, named Phoenix Mars, a green light in 2003.

Let us salute the innovative Peter H. Smith. We all recycle plastic bottles and newspapers. Why not recycle old ideas – especially those that have already been built and paid for? There must be a great many of them just lying around, waiting for the right “Peter H. Smith” to come along and discover them.
 

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The remarkable story of Arnie Goldman, who had a fantastic idea, implemented it, ran out of money a few months before the legislation to validate it passed California’s legislature… and is trying again. This time, the story will have a happy end.

Arnold Goldman – or Arnie, as everyone calls him – is an extraordinary Jewish visionary, entrepreneur, electrical engineer, and author, in that order. Entrepreneurs can learn much from him. His earlier failure was colossal. Today, he is 63 years old, and has embarked on a new entrepreneurial venture. This time, he may succeed big-time. His latest book is Moving Jewish Thought to the Center of Modern Science. And, he believes he is the only person in the world who is convinced that 1+1 does not equal 2.
  
In California, where he was born and raised, Arnie was co-founder of Lexitron, the first company to sell word processing software, sold to Raytheon in 1977. He then came to Israel with his wife and three children to build a solar energy firm. In the early ‘80s, he founded Luz International, a pioneering solar-energy company based in Israel. The name Luz came from the Biblical city where Jacob dreamed of a ladder rising to heaven.  Jacob renamed the city Beit El (House of G-d). 

Arnie dreamed of building a new ladder to celestial energy. Between 1984 and 1990 Luz built nine SEGS (Solar Energy Generating Systems) in southern California, generating 2% of the area’s energy needs and aspiring to produce up to 10%. The solar energy fields built then used solar reflectors that covered 2 million square meters. Arnie used talented Israeli engineers for Luz’s R&D, done in Jerusalem.

At one point Luz produced 90% of all the solar-generated electricity in the world! But it ran into a snag. To compete with conventional energy suppliers, in the era of cheap oil, Luz needed its vast solar-mirror-covered fields to be exempt from property tax. Such exemptions had been legislated in California, but the legislation expired in 1990. Luz assumed the renewal and extension would pass easily. And it did, with over 90% of California’s legislature voting “aye.” Luz went ahead with construction of its 10th solar plant. At one point Luz had $300 m. in annual revenues. 

But in 1991, the Republican Governor of California, Pete Wilson, vetoed the bill, under pressure from powerful electricity companies. Later in 1991, the U.S. Congress passed national legislation exempting solar fields from property tax – but it was too late. Luz had burned $20 m. a month to keep the construction going, and had run out of money. It was broke. Business Week says Luz went bust because rival natural gas systems were superior. But I think the reason was the delayed tax exemption.

Goldman says “the failure was shattering – financially and personally,” according to the Jerusalem Post. It took him 15 years to recover. 

But Arnie is back – big time!

He has founded Luz II, wholly owned by BrightSource Energy, which he founded and chairs, a U.S. company that designs and builds large solar electricity plants. Investors in BrightSource include Google.org, the ‘social responsibility’ arm of Google, which together with other investors has put $115 m. into Luz II. According to Business Week (May 14), BrightSource signed a huge deal with utility giant PG&E (Pacific Gas and Electricity) to supply PG&E with up to 900 megawatts of solar electricity. 

Luz II’s technology is unique. Unlike photovoltaic cells, Luz II’s thermal system uses concentrated heat from the sun to drive turbines, which in turn generate electricity. This technology is based on the system developed by the original Luz, in the 1980’s. 

According to Business Week, “Israel is quickly becoming a hotbed of alternative energy research and startups.” Among them: Solel Systems, Zenith Solar, and the Trans-Mediterranean Renewable Energy Cooperation project, sponsoring Desertec, a scheme to install thousands of parabolic trough collectors in North Africa and the Middle East, to generate electricity for the often-cloudy Northern and Western Europe.

And Arnie? Well, about that 1+1… combine two hydrogen molecules with one oxygen molecule, 2+1, and you get not 3 but one water molecule. Combine one amoeba with another, and you get not 2 but millions.  

He believes he can quickly build Luz II’s revenues to $3 b., 10 times those of the original Luz. “We can produce energy less expensively and more cleanly than anyone else in the world,” he told Jerusalem Post columnist David Horovitz in 2006. 

“The Luz Brothers are back,” Arnie says. With oil at $130/bbl., we should all rejoice.

Presentation Slides
Results-driven innovation is thinking INSIDE the box. SLIDE #2. The “box” is the set of challenges, issues, problems industry faces. These challenges are communicated to universities. Universities then apply creative thinking and cutting-edge science to meeting the challenges, working hand in hand with industry. The trick, of course, is to know which boxes are essential and which can be discarded. Innovation without any boxes is of no value to anyone.

This, I believe, captures the essence of successful results-driven university-industry cooperation. We have heard many case studies showing how this is done here in India. 

I have come 4,000 miles from India to deliver a very short message. Israel and India are strawberries and cream. Together our two countries can do great things. But how?

Here is my message.

Israel has a problem. As a nation we are a powerful innovation machine. But we sell our brains too early and too cheaply. We have 3,000-4,000 startups, in a country of only 7 million. But our great entrepreneurs and innovators ‘exit’ prematurely, selling their startups mainly to U.S. companies who leave a huge check with one or two entrepreneurs, but the people of Israel do not benefit, because a potentially great global firm, another Nokia or Infosys, has been stillborn. (SLIDE #3)

The solution is: (SLIDE #4) BUILD AN INDIAN INDIGENOUS INNOVATION MACHINE. Israel can help. We will gladly share the so-called secrets of our innovation machine. They are not really secrets. And it is not rocket science. India is already highly innovative –(SLIDE #5) I know this, because I work with Indian companies and have taught many brilliant and creative Indian engineers over the years, in America and in Europe. However (SLIDE #6) some of this creativity is deeply buried. Yesterday Vinay Deshpande noted that Indian students want to work for a ‘brand name’ company, even though 80 % of innovation comes from SME’s. My question is: How do you get Indian mothers to tell their sons and daughters to start risky businesses, rather than seek safe paychecks? The mothers of India hold the key. In Singapore Lee Kwan Yew told the mothers of Singapore, in 1965, to tell their kids to study math. A generation later, Singapore had many first-rate engineers.   

NEXT: TAKE THE FRUITS OF ISRAELI AND INDIAN INNOVATIVE IDEAS, MANY EMERGING FROM UNIVERSITIES.

SCALE THEM INTO GLOBAL BUSINESSES RAPIDLY.

SHARE THE FRUITS OF SUCCESS BETWEEN OUR TWO COUNTRIES.

This is a session on case studies. So far, we have mainly heard about success stories. But we learn most from failures. One of the secrets of the Israeli innovation machine is that it is OK to fail. You get another chance. And another. Here is a story of a brilliant innovator, who bridged university and industry, made a huge fortune – and said he had failed. And indeed, he did fail. Here is the story.  

SLIDE #7

CASE STUDY: Moshe Yanai, The Case of the Reluctant Multi-Millionaire

Moshe Yanai is a living legend in Israel, with a Midas touch in data storage technology.  

He himself, however, appears rather disappointed with the outcomes.

Why?

Yanai graduated from Technion-Israel Institute of Technology in 1975, with a B.Sc. degree in electrical engineering. He went to work for Elbit (see above), where he helped design and build data storage equipment for mainframe computers. In 1984, after eight years at Elbit, he was sent to the United States to support a project sold by Elbit to the German computer company Nixdorf. He worked at Nixdorf for three years, until he met EMC2 co-founder Dick Egan. [Contrary to what people believe, EMC did not get its name from Einstein’s equation, but from the names of its co-founders Egan and Roger Marino.]  

Yanai joined Boston-based EMC in 1987, when EMC employed some 1,000 people.  He led development of what became the flagship division of EMC, Symmetrix, ultimately becoming its VP. Little EMC took on the giant IBM – and with its innovations, led by Yanai, defeated it utterly. Yanai’s team included many Israeli engineers Yanai ‘imported’ to EMC’s Hopkinton, MA. Headquarters. When Yanai left EMC, 14 years later, in 2001, it had a market value of some $200 b., and employed 25,000. During the decade of the 1990’s, EMC’s share price rose by more than any other listed company – some 85,000%!

After leaving EMC, Yanai returned home to Israel, reportedly a multi-millionaire from his EMC options and salary. He helped found EMC’s startup in Israel, known as Diligent. He also invested some of his personal wealth in another startup, XIV, and became its chairman. Both Diligent and XIV innovated data storage technologies.  

Yanai found innovation skills among creative young people drawn from graduates of an Israel Defense Forces program known as Talpiot.

Talpiot’s participants are chosen from a pool of highly-motivated youth who specialize in hard sciences such as physics and mathematics. The soldiers, who all become officers, undergo more than three years of training – during which time they receive a degree in both physics and mathematics – and then join the Defense Ministry’s Research and Development Directorate or highly-classified units in the air force. Following the training, Talpiot participants are obligated to sign on for an additional six years of military service, for five of which they earn high salaries. (Jerusalem Post,  August 6, 2007).

On Jan. 2, 2008,  IBM announced it was acquiring Yanai’s XIV for a reported $250 m. “We are pleased to become a significant part of the IBM family,” Yanai said, probably smiling at the irony that after defeating IBM while at EMC, he had helped create technology at XIV that would now allow IBM to return in style to the storage business, to compete with EMC. 

On April 18, IBM announced it was acquiring Diligent for $165 m. Diligent pioneered ‘de-dup’ technology, which, in case of two duplicate files, allows backup only of the difference between the two, thus saving storage space. 

Israel’s daily business newspaper The Marker said that Yanai will pocket about $200 m. of the $415 m. IBM paid for Diligent and XIV.

It is hard to imagine feeling the emotion of ‘disappointment’ at such an outcome.  Yet according to The Marker, Yanai was deeply disappointed. His dream was to build the next Israeli Nokia. As The Marker noted:

“Yanai had not intended to make such quick exits. His original plan was much more Zionistic. He wanted to build the two firms into a global company based in Israel. But in both cases, his partners insisted on selling when faced with such a good opportunity – and profit – and Yanai had little choice but to go along.” * 
“My model is Nokia,” Yanai had told The Marker just two weeks earlier, on April 1. Instead, he had to settle for a different model: King Midas, of golden-touch fame. Will IBM build a new Nokia in Israel with Diligent and XIV? It is improbable.

AND IN CONCLUSION: SLIDE #8
_______________________________________________________________________________________
 *The Marker, Friday April 18, 2008, p. A12. “IBM purchasing storage startup Diligent for $165 m”.

One of my heroes is Leonardo da Vinci, without doubt history’s most creative individual. But alas, out of honesty, I am forced to say in my talks about him that most of his great inventions – helicopters, submarines, parachutes – were never implemented, even in prototypes.

Well, an intrepid Swiss man (Swiss??? Intrepid??) named Olivier Vietta-Teppa built a version of da Vinci’s parachute (see the original sketch below), leaped out of a helicopter with it and… landed safely. This was after a Brit tried the same thing, in 2000, but had to use his reserve parachute (OK, I admit it – Olivier had one too… but he did not use it).  

I doubt there are many examples of innovations that wait for 523 years before being implemented. Now – what about da Vinci’s helicopter? Submarine? Aircraft?  
___________________________________________________________________________
Parachute that Da Vinci drew is made to work… after 523 years
By Ian Sparks- 28th April 2008, Daily Mail

Parachutes have come a long way in the last few decades. They’re easier to steer and a great deal less likely to go wrong. So it takes a certain amount of nerve to plunge 2,000ft relying on a “chute designed more than 500 years ago. However a Swiss daredevil has done just that, trusting to the genius of Leonardo da Vinci.  Olivier Vietti-Teppa, 36, jumped at the weekend using a parachute based on sketches made by the Italian Renaissance artist in 1485. He said after the jump in Payerne, near Geneva: “It worked perfectly. I was unable to steer it, but I just glided gracefully to the ground.

Used da Vinci’s parachute: Olivier Vietta-Teppa
“I came down smack in the middle of the tarmac at Payerne military airport. A perfect jump.” He admitted he had been wearing a modern reserve parachute in case da Vinci’s design – made out of four triangles of fabric and with a pointed top – had failed to open. Mr. Vietti-Teppa is the first person to have made it safely to the ground with the da Vinci model. In 2000, Briton Adrian Nicholas tried it but had to use a back-up parachute to complete his descent. Mr Vietti-Teppa’s parachute was made using modern fabric along lines imagined by da Vinci. The specifications were found in a manuscript dating from 1485.

The parachute consists of four equilateral triangles of fabric, seven yards on each side. The base of the pyramid is a square of mosquito net, which enables the parachute to open. A wooden frame originally conceived by da Vinci was not used. It has one drawback – it is impossible to manoeuvre. “You come down at the whim of the wind,” said Mr Vietti-Teppa.

Blog entries written by Prof. Shlomo Maital

Shlomo Maital
May 2008
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