Legendary Entrepreneur and Author Judy Estrin (Part 6)

SM: What knowledge and experience did you gain from your time at Packet Design?

JE: For the first time I realized how hard it is to hire CEOs. One of the problems with an incubator is that if you try to turn the idea over to someone else and it was not their idea, they may not have the same passion about it. It can be very difficult to do a successful technology transfer. It was also during that time I realized how risk averse the VCs had become. I would try to help the companies try to raise money and they wanted customer names who could validate the market. I would look at them and say that if the market could be validated then it was too late for a startup.

It was during those years I started to think more about innovation. After 2004 I decided I did not want to start anymore companies. I don’t know if that was because I had spent too many years starting them or if the environment had changed too much, but I had done that and I wanted to do something different. I became very concerned about the state of innovation in the Valley. I was also involved in a very public proxy fight while I was on the board of Disney. Seeing the Valley and the shareholder activist and Wall Street pressures on large companies, I was feeling like the country was becoming more and more short-term focused. There was more and more push for incremental innovation and not the types of things that we had built.

At the same time, 2004, I turned 50. Bill and I decided to split up, my son started high school, and I started thinking about the world he was going to go into. I realized it was going to be nothing like the environment that let me have such a phenomenal career. I started speaking on the subject and after a year of presenting to different venues about my thoughts on innovation, the problems we had, and what we needed to do about it, a number of people came up to me and asked me to write a book.

I have never been a writer. I don’t like to write, but I was at a time in my life where I was open to new things. I thought I should give it a try, and it was quite a journey. When I decided to write the book I really wanted to go beyond just business innovation because I felt that the main purpose and message was that we had become too short-term focused and too risk adverse. I also believe that businesses do not exist in a vacuum and some of the forces that were creating innovation in the country actually were coming from national policies and dynamics. I decided in writing the book that I would make it valuable to business people and help them understand what it really takes to create environments of innovation. I also wanted to look at the national issues of policies, investment in research, and education. The book itself lays out the problem and then lays out a framework for thinking about innovation. A lot of people think that innovation is a product, but in order to have sustainable innovation you need research, development and application of science and technology. I have the notion of an innovation ecosystem. I use it as a framework for people to think about innovation.

I talk about a set of core values you need to have for any innovative environment to exist, which are questioning risk taking through an acceptance of failure, openness, patience, and trust. Questioning is not curiosity, it is also self assessment. Openess is not just imagination but collaboration and other’s ideas. During the lead up to the bubble we lost our patience. In the crash of the bubble and corporate scandals that followed, we became risk adverse and lost our tolerance for failure. The last eight years, just in terms of the leadership and how we reacted, we lost our willingness to self-assess, our questioning, our openness and our trust. These values have to be in balance. If you have trust without questioning, that is blind faith. If leaders just tell their employees, what to do you will not get innovation.

This segment is part 6 in the series : Legendary Entrepreneur and Author Judy Estrin
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