CSIRO – what price #innovation?

Last week Startup Victoria invited scientists and researchers from CSIRO to come and talk about some of the projects they are currently working on. Around 400 people turned up to listen to fascinating presentations on flexible solar panels, 3-D titanium printing, flexible OLED lighting, robotics, wearable kinetic dynamos powering textile-based battery storage systems, high-speed instrumentation using FPGA, and micro-manufacturing processes.

logoFrom the outset, the emphasis of each presentation was on the practical application of these inventions. The goal of the evening was to encourage entrepreneurs and founders from the startup community to connect and engage with CSIRO’s project teams. There was an open invitation to co-operate with CSIRO, via R&D, prototyping, IP licensing and commercialisation initiatives.

The evening was generously sponsored by Cogent, PwC, Elance-oDesk and BlueChilli, hosted by inspire9, and ably compered by Leni Mayo; and in place of the usual Startup Alley was a team of experts offering free advice to startups, organised by Two Square Pegs.

As well as showcasing its latest developments in nano-technology, materials, fabrication, energy generation and workplace automation, CSIRO wanted to remind the audience that they have development and test facilities, which are available for commercial use at very economic rates to the right sort of project. It’s all part of a broader charm offensive, in part designed to raise awareness of the great innovation that has come out of CSIRO (e.g., WiFi…), in part to counter the challenges of reduced government funding ($111m in cuts over 4 years).

To me, CSIRO would appear to be pretty good value for money based on the $700m+ government contribution (which probably accounts for about 70% of current budget). CSIRO generates income from industry for research and other services, and earns royalties from patents and other IP it licenses. But its challenge is to demonstrate its true economic value, either as a contribution to GDP, or as a return on investment to the government (and to the wider community).

On the one hand, CSIRO is not an investment vehicle – yet on one level it operates as an early-stage VC fund, identifying which projects to “invest” in, and securing commercial returns via patents and other licensing streams. Nor is CSIRO a listed company, but without the benefit of its research and inventions, many companies traded on the ASX might not be as financially successful.

Ironically, CSIRO has been involved in research on the future of Australia’s $1.4tn superannuation assets – part of the effort to work out how to put these assets to better use, both to generate more sustainable income for Australian retirees, and to ensure the nation is investing in the right sort of infrastructure, innovation and international growth opportunities.

Traditionally, superannuation funds and other institutional investors have shied away from early-stage projects, especially home-grown startups, either because they are deemed too risky, or because the technology is not well understood. Yet some investors are willing to allocate part of their funds to Silicon Valley VC’s, only to see some of that money flow back into innovative Australian startups (a phenomenon I have previously described as an “expensive boomerang”.)

I’m no economist, but if there was some analysis done on the value of the “CSIRO Dividend”, it would both be able to secure current government funding, and attract long-term funding via the Future Fund or similar investment vehicle.

Post Script: Soon after this post was published, the Federal Government announced its Industry Innovation and Competitiveness Agenda, which among other things is seeking to generate a better return on investment on for innovation.

Next week: The Three Pillars Driving the Online Economy

 

Demo Day for MAP’s Class of 2013 Startups

The Melbourne Accelerator Program (MAP) supported by University of Melbourne’s School of Engineering and Faculty of Business and Economics is only in its second year, but already shows signs of becoming a leading incubator of new and emerging entrepreneurial talent in the burgeoning Melbourne startup community.

Last week was Demo Day (a.k.a. pitch night) for the 6 successful teams who were selected from over 50 applications submitted for the 2013 program. Presenting to an audience of fellow entrepreneurs, potential investors, program mentors and “interlopers” (a term used by Dr Charlie Day in his introduction), each team was invited to present the fruits of their labours from the 3-month accelerator program.

To kick things off, there was a quick update on the Class of 2012, including the team behind the new Omny audio app, which offers curated audio content.

From the Class of 2013, first up was 2Mar Robotics, who are developing a remote-controlled robotic arm, aimed at helping people with quadriplegia or with restricted arm movement and control. An earlier, voice-operated prototype proved unstable due to interference from background noise, but the team, led by Young Australian of the Year 2012, Marita Cheng (and founder of Robogals) have already secured a number of pre-orders for the latest version, which they hope to ship in early 2014. While it is understandable that the team would want to keep key commercial aspects of their project confidential, the less-than-open responses to audience questions about product costs and market pricing created the impression that the team are still developing their business case.

The next project, also healthcare-related, was from Cortera Neurotechnologies, who specialise in remote monitoring sensors for epilepsy patients. The team’s goal, using highly developed neural interface technology, is to significantly reduce the risk of infection caused by major invasive surgery for the 30% of epilepsy sufferers who are unable to take medication. Despite some theoretical discourse and good-natured banter with the audience about cyborgs and mind control interfaces, the team (which is divided between Melbourne Uni and UC Berkeley) is well on its way to securing prototype funding.

Client Catalyst offers digital marketing services for SMEs, via mobile websites and integrated search solutions. Given that nearly half of all mobile searches are for local services, the solution has targeted the trade vertical (plumbers, builders, electricians, etc.) which accounts for about 25% of the SME market. Claiming much lower customer acquisition costs for their clients (compared to traditional classified directories), and a very high client conversion rate, the team has established a solid subscription business that more than covers their primary input cost of paid search terms.

By using highly intuitive data visualisation and enhanced search, the team behind The Price Geek claim to have established a major competitive edge over other price comparison sites, in their bid to help you “find out the market price for anything” (although currently, it really only covers tech devices, sneakers, and Tiger Woods memorabilia…). They have built affiliate programs with multiple merchants, giving them more market sources, more contributed content, and more data analytics. The site has already picked up some strong media coverage, and in future, The Price Geek plans to offer price comparison for cars.

Before commenting on Ebla, a self-publishing platform for lawyers, I should declare an interest: I previously worked for the legal information division of Thomson Reuters, including the Westlaw online service. So, IMHO, anyone who is attempting to bring a new technology solution to informed legal commentary and analysis deserves a lot of credit, especially if, as intended, the service empowers individual lawyers to showcase their expertise in a collaborative and adductive environment. Contrary to some popular misconception, the legal profession (along with financial services) was one of the first industries to embrace the digital age*. Yet consider this: the sheer volume of legislation, case-law and commentary; the complexity of the material and its many idiosyncrasies (e.g., case citation systems); the proprietary nature of much document drafting; and the “knowledge is power” approach to researching obscure precedents before facing your opponent in court – all these factors tend to work against the notion of knowledge sharing and collaboration among lawyers. (I have heard of some law firms that embed deliberate mistakes in their commercial drafting templates, to deter plagiarism by their competitors if the originals were to fall into the wrong hands.) Access to the site, which is still in Beta, is by invitation only, and will offer a freemium subscription model.

The last team to present was SwatchMate, with a Bluetooth-enabled reader that helps users to “capture the color of any surface” (or “Shazam for color”). I have to say that when I first saw this team present at a Lean Startup Melbourne event earlier this year, I was somewhat sceptical about the product, as they seemed to be focussing on the paint market (both trade and DIY customers), yet didn’t appear to realise that most people only paint their home once every 5-7 years. However, I am pleased to report that SwatchMate have since lifted their game, by identifying strong opportunities among designers and creatives, brand managers, the cosmetics industry, and even TV and monitor calibration. With linkages to major design software, as well as to leading colour and paint catalogues, SwatchMate will offer an integrated solution once they go into production. Meanwhile, they are planning to launch on Kickstarter, and are a finalist at next week’s Melbourne Design Awards (plus shortlisted for the Sydney and Brisbane Design Awards)**.

Applications for MAP 2014 close on April 24, and there are also opportunities to participate as a mentor (full details not yet available).

* Lawyers love their technology: The Wang word processing system was eagerly adopted by law firms in the 1970s and 1980s, for its ability to support complex document formatting. Online legal research tools like Westlaw and Lexis-Nexis were launched in the 1970s. Some of the first CD-ROM and web-based law publications in the 1990s deployed specialised html coding and Boolean logic designed for legal search and retrieval purposes. Many law firms use sophisticated knowledge management systems to capture the in-house expertise of their lawyers. Court reporting and litigation support tools have been using advanced voice recognition, extensive text parsing and real-time data capture and processing for many years.

** Declaration of interest: I am currently involved with the Design Awards, although I have no say in the selection of shortlisted entries or finalists.

Is it safe to upgrade to iOS 7?

I ask the question because like many other users, I am holding off upgrading to iOS 7. I have even backed up a copy of iOS 6.1.3 to “freeze” it in case I am forced to upgrade before I am ready. I am holding out until some of the potential glitches and bugs are ironed out. I was first alerted to the issue by the developers of Audiobus, but it seems that they are not alone….

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Leaving aside the fact that many customers could not easily download the new operating system, or the fact that the shiny “new” iTunes Radio is not available outside the US, it seems that iOS 7 has been launched rather hastily, along with iTunes 11.1 (barely a month after iTunes 11.0.5….).

Audiobus had earlier notified their customers that iOS 7 would automatically update apps, without users even knowing, which risked corrupting personalised settings, especially for more complex apps. Now, it seems that the upgrade function has been modified, so that users can select when and how their apps will be upgraded.

But Audiobus, who launched inter-app connectivity for live audio, could be one of a number of apps that Apple is seeking to render obsolete or redundant, since iOS 7 supports Inter-App Audio. Other apps seemingly under threat include those featuring, photography, music streaming and document sharing.

Even an app that utilises the amount of contact area made by your fingers on the device touch screen was forced to remove that functionality by Apple. To me, this type of gesture or articulation could be critical in helping people with accessibility issues – so why should its deployment be restricted at the whim of Apple, rather than being made available to all developers?

Apple will not countenance any app that “interferes” with the telephony functions of an iPhone, and until iOS 6 introduced “Do Not Disturb”, I wonder how many 3rd party apps with similar functionality were rejected by the iTunes Store?

Now Apple appears to be cornering other functionality and interactivity design – even if Apple didn’t think of them first…. In fact, every original app design or feature is like a piece of middleware, that allows the user to interact with the device’s operating system, in a way that the system developers probably had not anticipated; this process is at the heart of innovation – taking something good and making it even better.

The fanfare of the new iPhone 5S (and its colourful cousin the 5C) probably won’t allow any criticisms about iOS 7 to rain on Apple’s new product parade – but I can’t help feeling that as customers we are being oversold each new release of an Apple device or operating system upgrade.

Although every incremental release or upgrade is supposed to come with lots of great new features and benefits, we actually lose some functionality and user options as Apple continuously locks down customisation and personalization. For example, iTunes 10.8 disabled the option to manually sync Notes between devices – now it’s all done via iCloud, and legacy data that predates iCloud (or is in a folder “On My iPhone” and thus not “recognised” by iCloud) has to be copied over to a cloud-enabled folder, one-by-one, as I have learned to my cost. Why does Apple think it can determine how I manage my own data?

While I understand that all product developers rely on user experience and expectations to help them develop new features, and they need customers to migrate to single, common platforms and versions as quickly as possible post-release, I’d prefer that my loyalty and patience were not taken for granted.

“Everything on the Internet should be free…”

Last week I got into a very heated dinner-party debate with an artist, an academic and a publisher about the economic value of copyright protection in particular, and intellectual property rights in general.

It started with a discussion about file-sharing and illegal downloads, and led to an argument about patenting genomes. I can’t attribute directly, but the gist of the argument was as follows:

1 Copyright and patents do not encourage innovation – they stifle it

2 Intellectual property rights represent a modern phenomenon – ancient societies managed to exist without them

3 Everything on the Internet should be free – and not subject to copyright protection

Let’s agree that formal intellectual property laws are a relatively recent invention – the modern concept of patents emerged in 15th century Europe, and the first British copyright law was passed in 1710. These laws then grew in importance as technology introduced the printing press and the industrial revolution.

I would argue, however that all civilisations have placed a premium on knowledge, creativity and invention. Regardless of whether this knowledge is based on folklore, scientific experiment, geographical discovery or geological exploration – specific rights, actual economic benefits and certain legal protections have been afforded to those who establish ownership or control of these assets. Examples would include the right to copy ancient manuscripts held in monastic libraries; the monopolies and protection granted to members of craft guilds in plying their skills; the trading rights granted to merchants; and restricting the practice of certain tribal traditions to selected community elders.

Most of these knowledge-based activities involve a high degree of effort, ingenuity and risk-taking – so in return, it was acknowledged there needed to be financial and other rewards to act as incentives. In the case of science and technology, these incentives are often deemed essential to offset the huge capital costs of developing new products and processes. In the case of copyright, the rewards of author royalties and content licensing fees are desirable to encourage people to come up with new ideas and new concepts – even if the purpose is simply to amuse and entertain us.

Of course, the economic rewards need not simply be derived from patents or copyright – tax-breaks for R&D or public grants to fund academic research are some examples of alternative financial incentives for both inventors and people of ideas.

As for the concept that “everything on the Internet should be free”, I am reminded of what I once told a client, who could not understand why access to the on-line version of a printed reference work was costing him more than the “physical” cost of adding a new user log-in and password to our content publishing platform: “OK”, I replied, “you can have all the content for free, but we’re not going to index it, or structure it with headings and sub-headings; we won’t tag it, insert cross–references, or add hypertext links; we won’t even edit it; and finally, we won’t update it every time there is new material.” He soon got the point.