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Bread on the Waters
APR 02, 2015 11:29 AM
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Bread on the Waters
 
Agile CareersCompanies hold up innovation as their latest tool to increase profitability. And the surveyors of profitability these days can rarely sometimes see more than a few quarters ahead, and certainly not more than a few years.
 
Innovation has given rise to a whole raft of departments and initiatives, in many industries, aimed at technology transfer. It’s about monetizing ideas. 
 
Yet, there’s an alternative longer-term view. I’m not sure whether its time has perhaps passed for us in software or whether a merrier spirit of cooperation between companies can replace the mutual market terrorism between them that characterizes contemporary markets. I learned it many years ago from an AT&T Research manager named A. G. (“Sandy”) Fraser, and he called it Bread on the Waters.
 
The idea is this: If you’re a development company with its own high-tech research lab, then, rather than hoarding your inventions in-house, license them externally. The broader market may host companies that are in a better position to refine your ideas and run with them than you yourself are, and they’ll put them on the market to support their own profitability. When they do, just go to the store and buy them off-the-shelf. 
 
You will capitalize on your investment and will have amortized the development costs across your competitors who are also buying the product from the same vendor.
The notion echoes ancient writer Qoheleth, who wrote: “Cast thy bread upon the waters: for thou shalt find it after many days.” 
 
Sandy Fraser related this idea to me as we were discussing how we should take forward the new department we had founded to improve technology transfer between Bell Labs Research and our colleagues in development. Bell Labs (no different than anyone else) had a less-than-good track record in this regard. Yet Bread on the Waters had met fantastic success. 
 
Bell Labs invented C but it didn’t do the C compilers for all the platforms being used within Western Electric products: we went to the market for that. We invented the transistor but didn’t mass-produce commodity silicon: we went to the market for that. 
 
The Unix Operating System would become Linux, Solaris, Sun OS, Free BSD, Ultrix, Xenix and, arguably, OS X and many others. C++ compiler production rapidly moved to Green Hills, Comeau, GNU, Borland, ultimately IBM, and many more.
 
But it wasn’t only Bell Labs that discovered Bread on the Waters. Kodak developed Diconix ink jet printing in the early 1990s, sold off the division, and bought it back later.  Broad innovation was one of those competencies, but perhaps production competency was limited respectively to phone systems and pictures. Neither needed to control production in-house to benefit from their own brainchildren.
 
Most recently, Tesla has announced that it wants to give away much of the technology behind its amazing vehicles. If the company is also into building charging stations for vehicles and if the charging stations build on the invention they are giving away, this is like planting money trees.
 
Stories abound of companies failing to engage the commodity marketplace, only to face an end-around by open systems or traded ideas. The stories aren’t well know because many of these companies quietly died: Apollo Computer’s token-passing ring. The Edsel. The Saturn.
 
Hoarding your own technology and inventions is not only silly from the perspective of thinking that innovation and invention are something “ownable,” but it sometimes just doesn’t make business sense. Follow the wisdom of Qoheleth when it makes sense. And it will make the world a better place.
 
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