The Decade of Innovation in Review
Brad Roberts, PhD looks back at how the decade of innovation shaped Xinova (and by extension, Dr. Roberts and the rest of us) into what we are today.
It’s not just that time of year where we reflect and where we look forward; it’s also that time of the decade. Xinova’s been doing this for longer than I have, but I’m about to hit the 10-year mark here, so I thought it would be interesting to share some observations on what’s impacted our trajectory. Less about Xinova itself, but the changes in the surrounding tech and innovation landscape, from unbundling of services to bundling of bits into blockchains.
I joined our former parent company Intellectual Ventures in the Invention Development Fund in early 2010. Our mission was partnering with organizations to generate de novo patent portfolios, working with some of the best universities, research labs, and individual inventors in the world. Through the decade many external factors influenced our course, which in a way has also been my course. I’d generally categorize these factors as:
- Legislative
- Infrastructure
- Technology
- Societal
I’m sharing an incomplete summary of what both pushed and pulled us to where we are today–no longer an investment fund but an operating company with a global network of innovators and projects that have ranged from potato chips to asics – both the circuits and the shoes!
Legislative
While the following two pieces of legislation that I’m highlighting are US-focused, their impacts were felt in our work globally and caused large shifts in the world of tech entrepreneurship. GDPR has had an equivalent global impact but until the US and others standardize on privacy regulations there’s still uncertainty with respect to innovation.
The 2011 America Invents Act changed the face of the US patenting landscape. One of the most positive impacts was aligning the US system with that of the rest of the world, one example being a switch from “first to invent” to “first to file.” There were many other well-intended changes where the impacts are still being evaluated, but perhaps the most immediate impact was to “business model” patents, which were suddenly subject to increased scrutiny and questions of the validity of thousands of generally software-related patents.
A similarly important piece of legislation set up large changes to the innovation landscape in the JOBS Act, which set a clear(er) playing ground for crowdfunding. While there were certainly other important pieces to this legislation, the legality of certain offerings was provided a clearer foundation. Example efforts range from disaster in the “coolest cooler” category to highly successful eREIT portals that enable individuals to invest in fractional real estate offerings more directly than typical market or exchange products. It also likely spawned one of the hype-driven events in “ICOs” which I’ll cover shortly!
Infrastructure
Clearly one of the biggest changes to the startup space is the advent of infrastructure and technology available as a service. Personally I break this into two huge sequential buckets.
The first and, at this point, the bigger innovation is the cloud. Resources and scalability are essentially an afterthought when it comes to provisioning an effort that is reliant on computer servers. With this massive scale and distribution is a change to continuous deployment allowing for rapid iteration to find product-market fit and justify customer obsession.
The second part of infrastructure as a service is smaller but growing and likely with greater room for value creation, in what’s probably best summarized as direct to consumer. So many of the resources needed to build, market, sell, and deliver a product to a buyer are now available on-demand that the same level of continuous deployment, rapid iteration to find product-market fit and ultimately customer obsession made more efficient by the cloud is now viable with physical goods, targeted to those who will return the favor of obsession.
Perhaps “social media” belongs here too, but remember I’m talking about things that impacted Xinova’s decade; we’d like to be the premier market network for innovators, and we’re still on that mission. These technologies enable and pull us along, but it’s the shift from CapEx to OpEx that has really been the driver for this decade’s new companies.
Technology
Both of these legislative and infrastructure shifts have resulted in three important technology-enabled changes to how people engage and transact. Unbundling and collaboration tools have resulted in what we commonly call the future of work. The ability to work on the same document with someone whom you may have never met in person or even by phone has largely been enabled by the google and LinkedIn genre of tools. Their decomposition into single-purpose use cases to be re-assembled as needed is both monetized and leveraged at an increasing pace.
I mentioned ICOs earlier as a downstream effect of the JOBS act, but that’s not entirely accurate. Fractional ownership managed by a distributed ledger, smart contracts and other blockchain-related technologies were theorized and enabled before the JOBS act, but the value and necessity of cryptocurrency in the form of trustless, censorship-resistant, immutable records have now been put to the test. Hype certainly overrode reality for a period, but amazing work continues in the space related to financial technology. Large, conservative industries are now looking at more mature implementations seriously.
Lastly, Artificial Intelligence. I prefer the worldview that AI is only societally concerning until people get used to it and then it’s simple technology. There was a time when the thinking went, “AI is really here when a computer beats a human at chess.” We’re long past that point and yet we’re still looking at hybrid human-computer teams as the most effective chess teams in the world. AI’s not really here; it’s just technology. How it augments humans based on large bodies of data is really the key piece we hope influences our future the most.
Over the past decade, many moats were filled, making it easier and easier for disruption to come to staid industries. That’s probably never been more true than what will occur in historically heavily regulated industries over the next few years. Technological stability has allowed for a mass increase in efforts to attack highly regulated and “stable” industries: finance, insurance, health care, legal services at levels that are not superficial. Watching the seed/Series A rounds occurring around the world tells me that life is going to get pretty interesting for “professional services” quickly. There’s a downside to the past decade as well: Infrastructure as a service is already straining against regulation. China, Russia, India, and others have all restricted access to certain cloud providers or the content that flows across them. If I were to sum it up, either a technological solution will break the regulation, or regulation will break the technology.
Today
At Xinova, all of these factors, and others, influenced our decisions to spin out of our parent company, separate from operating a patent-focused fund, and establish ourselves as the world’s most valuable innovator network. We re-wrote our partner and member agreements, re-architected our software stack, and grew and shrank several times. We have a lot of work to do in the next decade and certainly, there will be other external influences. However, we expect that our focus on commercially viable solutions will continue to wow our customers and reward our innovators – all of whom are partners we’ll navigate the next set of influences with.
What a world of difference from investing in patents!