"Sometimes if you want to see a change for the better, you have to take things into your own hands."
Technical entrepreneurship is often associated with innovation, research and invention. However, the motivation for entrepreneurship is the creation of wealth and commercialization of an idea.
Wide scale disruptions in the economy, consolidations in industry, and the shift in value towards applications and applied technology create new challenges for the entrepreneur and the need for new business approaches to commercialization. Business ecosystems can effectively address these challenges. This article describes Coral CEA, the keystone of a worldwide ecosystem anchored around the commercialization of communication enabled applications. The vision of Coral CEA is to create new companies and knowledge jobs by implementing new commercialization models and driving massive innovation that is linked to commercialization.
Accelerating Successful Technical Entrepreneurship
Investment is usually focused on finding and incubating breakthrough ideas. However, the entrepreneur is only successful if the idea is brought to market successfully. The technical entrepreneur often lacks the required skills, relationships or support required to be successful. Selected regions around the world, such as the Silicon Valley, Boston, and Tel Aviv, have superior support structures that have been developed over time. These structures can fill value chain gaps and innovate in go-to-market, business models and other non-technical disciplines.
The difficulty of successfully commercializing innovation can be linked to the imbalance in focus and support across the whole business life cycle. In Canada, government investment in research approaches $9 billion dollars per year, which should result in at least a 10x return on investment. According to the study The Means to Compete: Benchmarking IT Industry Competitiveness, our current technology transfer and commercialization processes are not delivering. New approaches to commercialization more suited to the dynamic knowledge based economy are needed, such as a business ecosystem commercialization model which, through collaboration, enables companies to leverage each others' respective strengths towards creating globally competitive capabilities.
New approaches are especially important for companies in small markets, where the definition of small now includes multi-billion dollar companies that have not survived industry consolidation. This is driving the need for new, symbiotic, collaborative business models. Companies that are in dominator-controlled models of the past find it difficult to adapt, making them highly vulnerable to competition.
There is also a disruptive shift in the economy away from a familiar industrial era economy, based on manufacturing, to a knowledge-based, creative economy that is more dependent on talent and innovation to create value. In the new economy, more revenue may come from information about data than from the device that collect the data. This drives the need for innovation in business models and technology, the development of new skills, and a move to include the application of technology to business problems rather than just the creation of new products. Figure 1 summarizes these problems and their solutions.
A business ecosystem, modeled on a natural ecosystem, creates an economic community which facilitates collaboration. It magnifies the contribution of any of its members, enabling them to deliver collective value beyond anything they might be able to do alone. Over time, the individuals and organizations in the ecosystem find mutually supportive roles, align their investments, and move in the directions set by leading companies. An implementation of this model is underway in Canada in an initiative called Coral CEA.
Coral CEA is a non-profit company established to build knowledge-based companies and jobs, initially in Canada. It does this by creating and anchoring a business ecosystem that provides strategic value to its members. Coral CEA uses a unique, world class technical platform (called a sandbox) to provide advanced Information and Communication Technology (ICT) building blocks to its members, enabling them to collaborate to deliver competitive solutions that enhance the efficiency and effectiveness of virtually any business process.
Coral CEA has been established as the keystone of a worldwide ecosystem anchored around the commercialization of communications enabled applications (CEA), a new, large growth opportunity for ICT. The keystone's role is to provide a focal point for the overall ecosystem and enable it to adapt to external changes. The keystone facilitates:
overall output and productivity of the ecosystem: the keystone monitors overall health and takes action to ensure that the system is functioning efficiently
resilience and stability of the ecosystem: the keystone monitors and stimulates members to remain healthy, and, in the case of the loss of a member, stimulates others to assume the role of the missing member
stimulation of innovation and creation of new members required to provide ongoing value and growth to ecosystem members
Coral CEA is implementing the business ecosystem approach to the commercialization of CEA. This creates a strategic opportunity to lower the barriers for companies to bring differentiated solutions that address significant global problems more effectively. Coral CEA provides the means for companies and researchers to solve significant problems worldwide, such as health, environment, energy, safety, and quality of life, in the same way that the Internet enables e-commerce, roads stimulate economic growth, and tools allow carpenters to build houses.
There are five founders of Coral CEA, each bringing a unique capability to the ecosystem. IBM and Nortel provide a differentiated capability to members, providing virtualized access to advanced ICT. Eclipse brings the knowledge and processes for building and operating a successful global ecosystem. Carleton University provides expertise on commercialization, new tools, and the ability to develop skills to leverage both CEA and ecosystems. The Information Technology Association of Canada (ITAC) represents the ICT industry and brings a national focus. Smaller members that join increase the strength and diversity of the ecosystem, improving its overall health.
Coral CEA supports a large, distributed ecosystem with a high level of supplier diversity across its members and a high level of customer diversity worldwide. Coral CEA's ecosystem approach to commercialization enables small and medium sized ICT companies to incorporate a pull model into their go-to-market strategies.
Building Blocks for a Successful Ecosystem
There is significant support in the industry for startups, ranging from the many incubators, venture capital (VC)-based advisory bodies, and various training from academia, economic development agencies and government programs. These programs add value to the early front-end, but fall short on addressing the emerging companies' needs as they move through the business life cycle and need to scale. Coral CEA addresses the entire life cycle through the implementation of five main ecosystem components:
1. Knowledge and dissemination: to identify, qualify and launch businesses. This pillar creates a supply of new skills and talent. The Lead to Win initiative, which uses the ecosystem model in its implementation, is one mechanism used to find and develop promising opportunities which lead to company and job creation. Entrepreneurs receive coaching and tangible support in refining their opportunity and de-risking its commercialization.
2. Commercial services: to fill execution gaps and provide a framework for collaboration. This pillar provides the required collaboration framework for members to both provide and secure services from one another and to fill execution gaps. Companies become members and donate high value services to other members, which de-risks opportunity development and results in future business as early stage companies and opportunities mature.
3. Sandbox: to create differentiation and ability to sustain a strategic advantage for its members. This pillar provides out-of-the-box, technical building blocks for members. These are often expensive-to-secure and complex-to-operate ICT services, and beyond the reach of members companies. The technical capabilities of the sandbox provides strategic advantage and speed to market at very low cost for members, helping them to compete more effectively.
4. Business development: to provide a brokering capability between members' needs and capabilities. This pillar raises the profile of the ecosystem, attracting new members to add to the diversity and strength of the ecosystem. Companies that have pain points can bring them forward and have them addressed by other members looking to supply solutions. Providing members access to the deal flow is one element of this pillar.
5. Lead projects: to fill gaps in the ecosystem and ensure sustained innovation and value. This pillar harnesses the research community and fills technical, business, and process gaps to ensure ongoing value to members. Coral CEA will co-invest with members to fill common gaps in the ecosystem, reducing the overall cost of filling gaps.
By putting in place services and capabilities across the entire business life cycle, companies of any size can benefit from membership in the Coral CEA ecosystem.
The first three pillars of Coral CEA are underway. Lead to Win has engaged more than 100 entrepreneurs and, by the end of July 2009, will have launched more than 80 companies. A number of service providers have emerged to offer diverse services ranging from sales support, telecom services, space, legal and other high value services to members. IBM and Nortel have contributed more than $16M worth of technology to the sandbox which is co-located at Carleton University and in a cloud computing environment.
Communication Enabled Applications
A successful ecosystem must be focused around a dominant design which provides a stable point around which innovation can be harnessed. Our focus is CEA as the next generation of ICT. ICT is historically a strength of Canadian talent and its application improves the effectiveness of nearly all business verticals. People making decisions or providing services are at the heart of virtually all business processes, and CEA provide new ways to drive overall business productivity.
CEA integrate a set of ICT components to increase the productivity of an organization or improve the quality of its users' experiences. Communication enablement adds real-time networking functionality to an ICT application.
The two key benefits of providing communications capability to ICT applications are:
1. Removing the human latency which exists when: i) making sense of information from many different sources; ii) orchestrating suitable responses to events; and iii) keeping track of actions carried out when responding to information received, such as in emergency response and disaster management systems.
2. Enriching the user experience by enabling them to be part of the creative flow of content and processes. Examples include: i) Joost, a new way to watch more than 15,000 shows in more than 250 television channels; ii) Facebook, a social utility that connects users with a network consisting of people around them; and iii) YouTube, a way to watch and share original videos worldwide through a Web experience.
An intrinsic reliance upon communications technologies to accomplish its objectives distinguishes CEA from other software applications. CEA depend on real-time networking capabilities together with network oriented functions such as location, presence, proximity, and identity. Today, these capabilities require specialized skills and knowledge. Another distinguishing characteristic of a CEA is the implicit assumption that network services will be available as callable services within the framework from which the CEA is constructed. To provide callable services, today's network services must be made virtual and component-like.
The following three scenarios provide examples of CEA:
1. A seriously injured person arrives at a hospital. An application that can find and communicate with the nearest available and qualified medical personnel, securely delivering patient data together with the nearest available required equipment, may save the person's life, while enhancing the performance to cost ratio of medical personnel and equipment.
2. A key component of a sea-based oil rig has been found to be defective. CEA eliminates the serious delay that occurs between when applications provide information about the defective part and when the right people are found, contacted, and in place to fix it.
3. An industrial customer problem is resolved quickly because a CEA project management application scheduled the earliest possible conference call with all key available stakeholders and delivered all relevant information to them.
CEA enhance the productivity and competitiveness of any business process, and will be widely applied to virtually any vertical or business. Coral CEA ecosystem member companies can:
reduce pre-sales, go-to-market and development costs
leverage members to deliver more comprehensive value propositions
increase credibility and brand value
reduce risk of defining and exploiting opportunities
strengthen collaboration with other ecosystem members
harness global innovation into profitable new market offers
Members of Coral CEA co-create value and share costs with other members. They will have access to:
orchestrator, customer and large company opportunities and deal flows
state of the art architectures, software modules, and processes to: i) build their own market offers using core services and products with a standard infrastructure environment; ii) co-evolve complementary components, products and solutions; iii) explore and advance technology; and iv) showcase their CEA
lead projects, commercialization services, and training and educational programs that support a global leadership position in CEA
Coral CEA Membership
Since Coral CEA is driving an ecosystem-based commercialization approach, there is motivation for several types of members. Small and medium sized businesses join to gain access to the assets that allow them to differentiate their offers, or to fill gaps in some aspect of their commercialization plan. Large companies join to gain access to massive innovation and to exploit partnering opportunities with these innovators. Suppliers of technology join to contribute their assets to the community and to fill gaps in the capability of Coral CEA. Enterprises join to influence offers, contribute capability and to secure partners to solve their problems.
Current membership classes are summarized in Figure 2:
For more information on membership please visit the Coral CEA website.
Business ecosystems are a new form of commercialization and Coral CEA is implementing this mechanism in Canada. Early results are promising and interest in joining and enhancing the ecosystem is building. Initial discussions are underway to link to other cities in Canada and potentially to 26 cities across the world.
building. Initial discussions are underway to link to other cities in Canada and potentially to 26 cities across the world.