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
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 *The Marker, Friday April 18, 2008, p. A12. “IBM purchasing storage startup Diligent for $165 m”.

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