THURSDAY APRIL 7TH 2011 : INNOVATION AND BUSINESS INCUBATION A debate via video-conference between Leuven and Stanford/Silicon Valley

1. Innovation and
Business Incubation
Stan Baginskis
April 2011
Innovative Thought-Leading Disruptive Expert Strategic
© 2010 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 1

2. Pace of Innovation Accelerating
Source: IBM’s Global Innovation Outlook, Joseph Jacobsen, Organizational
and Individual Innovation Diffusion, 2004

3. Emerging Technologies Group
Dedicated business incubation organization
Mission: create a stream of $B businesses in
new, adjacent markets
But ..Vision without Execution is Hallucination
- Albert Einstein
Cisco Confidential 3

4. Students of the Innovation Game
Cisco Confidential 4

5. ETG and Innovation Types
Focused on the Product Leadership Zone
ETG
Source: Geoffrey Moore, “Dealing with Darwin” 5
Cisco Confidential

6. Why large companies struggle with Innovation
Issue Implication (ETG)
Too much money < 10 M$ to first product
Too much time < 18 months idea to product
Too many people < 50 people to FCS
Too much love Stealth mode for first 18 months
Too much hate Keep all incubations together
Black sheep Only focus on incubation
Cisco Confidential 6

7. Emerging Technology Group (ETG):
A New Growth Model
ETG
Focus
Partner, Internal Venture,
New
Acquire Financial Investment
Market
Disruptive Innovation
Develop,
Existing Develop
Acquire
Existing New
Technologies
Source: Prof. Ed Roberts, MIT Sloan School
Cisco Confidential 7

8. Internal Venture Math
1,000
Prospects
20
15
ET Investments
Successful ETs
2% 75%
Cisco Confidential 8

9. Where Innovation Comes From
External sources of ideas and innovation
Business partners
Customers
Consultants
Competitors
Associations, trade shows, etc.
Academia
0% 5% 10% 15% 20% 25% 30% 35% 40%
Internal sources of ideas and innovation
Employees (general population)
Sales or service units
Internal R&D
0% 5% 10% 15% 20% 25% 30% 35% 40%
Source: IBM, “Global CEO Study 2006: Expanding the Innovation Horizon”
Cisco Confidential 9
© 2006 Cisco Systems, Inc. All rights reserved.

10. Cisco Idea Zone (I-Zone)
Internal Employee-based Innovation
© 2010 Cisco Systems, Inc. All rights reserved. Cisco Confidential 10

11. Crowd-Sourced Innovation Winner!
The Second Cisco I-Prize Contest $250K
Finals
Semi-Finals
John Chambers
Open Phase • 9 teams and Marthin
• 14 countries De Beer
announce at
• TelePresence
• 32 teams Cisco Live
presentation
• 22 countries Las Vegas
• Cisco WebEx, Show
• 824 ideas and Share video
• 3000 participants
• 156 countries
Launch
Cisco Live cisco.com/iprize
Barcelona
January April May June 2010
© 2010 Cisco Systems, Inc. All rights reserved. Cisco Confidential 11

12. Internal Venture Framework
Find Graduate
Filter Accelerate
Incubate
Emerging Initiate Repurpose
Ideas Technology Consolidate
Formed
“The absolute best-in-class implementation of innovation is
what Cisco is doing with its emerging technologies
group.”
Forbes Magazine,
Geoffrey Moore
Managing Director, TCG Advisors
Cisco Confidential 12

13. 42
ET Go-to-Market Approach
Cisco Confidential 13

14. Our Approach
1. Think BIG: Bold Vision Disrupt
2. Start Small: Solve Real Pain Point Well
3. Lead: and others will follow
4. Evolve Quickly: Iterate, Iterate, iterate
5. Believe: With Passion
Cisco Confidential 14

15. Thank you.
ETG Business Incubation
Innovative Thought-Leading Disruptive Expert Strategic