To those who see Silicon Valley as a cauldron of youthful creative talent leaping from start-up to start-up, finding one such start-up about to celebrate its 70 th year might be surprising. One also might be curious how this longevity, centered in such a turbulent business environment, has occurred. While the real reasons are undoubtedly complex, having spent over 40 of those 70 years at SRI, I’d like to offer a few, rather simple observations. Since these are personal, they are also arguable.
First, there is one important difference between SRI and typical Silicon Valley companies. The “I” in its name is for institute and the major difference between a company and an institute is that a company is centered on a profit whereas an institute is centered around a cause. Given that the cause remains valid, the institute is obliged to keep chugging along, as long it is financially able. So how, in the case of SRI, has that chugging along occurred?
One good reason for endurance is that a research institute like SRI must be current in whatever field it is in, almost by definition. Down at the income-producing level, it is like a perpetual start-up, seeking resources to further the state of some art or some new service. If that progress sometimes yields commercial potential, that’s good and I’ll come back to that for doing so has become critical for SRI. But, as important as that derivative income can be, SRI can’t stay long out of the discovery mode.
Another reason for SRI’s longevity is the breadth of its research and development. For much of its existence, SRI has had an even greater breadth than it has today. That breadth, in both type of clients and fields of endeavor, offers a diversity that helps stabilize it in the often-unpredictable flow of research funding.
With 1980 came a profound change to how SRI was able to operate. That year brought the Bayh-Dole Act that offered non-profit research establishments the ability to commercialize R&D that it had carried out under federal government sponsorship. When the Institute finally woke up to that opportunity, it learned how lucrative that could be. Equity positions, licensing, and even spin-offs (read start-ups) could now be part of the business model! Though several decades in materializing, income from its intellectual property has become vital and a welcome alternative to fee-limited government research contracts. Research for industry doesn’t necessarily have such fee limitations and certainly contributes further to diversity. But in my experience, those commercial clients need to be carefully considered to avoid other risks.
And this new way of operating has something to say to those who might consider coming to SRI. In a nutshell, it is a wonderful and relatively safe way to learn entrepreneurialism.
If you are a researcher with some entrepreneurial drive, SRI offers a training ground in the essentials: 1) creating a new idea and finding sponsorship for it (If it is within the Government, certain rights will accrue as mentioned above.), 2) managing the project, in both a content and financial sense, under a predetermined set of goals and constraints, and 3) delivering the expected outcome. Working repeatedly through this project cycle, including the potential for commercialization, is a safer and more modest commitment than a start-up. Though not explicitly stated, that training has certainly been one of the “causes” that the Institute serves.
But, importantly, SRI is more than commercialization. There is another reason it exists and perhaps the most important cause it serves. It offers a home, a framework, for diehard researchers to come and carry out research in almost any field of their choosing…including many of the scientific and social fields for which a commercial product or service has no meaning. For example, for most of its 70 years SRI has been engaged in probing and modeling the upper atmosphere. At the moment it operates some of the world’s most important radio observatories. There is also educational research where it has created both evaluative methods and helped define technology’s role in education. And there has been innovative business practices and management consulting to both governments and industry, worldwide. These efforts help round out the causes that the Institute is chartered to do. One might even say that the income from commercialization, as good a surrogate for entrepreneurial involvement as it is, exists to underwrite whatever SRI might do to improve the world around us. That’s why it is an Institute and why it has been one of the world’s most prominent research organizations for 70 years.
(Footnote: If you are curious why non-profit SRI’s url is “sri.com” rather than the more appropriate “sri.org”, it is due to a mistake made at SRI when the very first domain names were defined anywhere.)