Ask Dan Rosen to define innovation, and he’ll say it’s “a breakthrough in technology that leads to a business breakthrough.” It’s a concept that Rosen is well acquainted with, having been a founding partner of Seattle-based Frazier Technology Ventures, a prominent venture capital firm, and the CEO and president of his own investment and advisory firm, Dan Rosen & Associates, as well as the chair of Seattle-based Alliance of Angels. He has recently backed local companies like Geospiza, Modumetal, and Ontela.
Rosen also has the distinction of having spent a significant amount of time in all three of Xconomy’s network cities. He did his undergraduate studies in biology at Brandeis University in the Boston area, and his Ph.D. in biophysics at the University of California, San Diego, before embarking on a distinguished career at AT&T and then Microsoft. At the latter, his work spanned technical areas from speech recognition to search; he was general manager of new technology, general manager for MSN, and also worked with Microsoft Research.
I recently had a chance to speak with Rosen about the process of innovation and the role of big companies and startups. There’s a lot more where this came from, but here are a few highlights:
—On the West Coast rivalry between Seattle and San Diego: “We [Seattle] were so far ahead 10 years ago, being home to companies like Microsoft, Amazon, Boeing. They’ve surpassed us now in biotech. In software, they were nowhere 10 years ago, and now they have SAIC, Qualcomm. They compare to us in a lot of ways, in biotech, wireless, and software. They’ve gone from having little investment to quite a bit. I’m very impressed with the vibrancy, though the cost of living is so high in San Diego.”
—On a venture capitalist’s view of the innovation process: “You have ‘innovation factories’ like universities. Without them, nothing happens. But when you’re an investor looking for companies in a university, you don’t find them…That’s the crux. You have to understand the technology, but also understand the industry in the creation of a company.”
—On whether big companies innovate: “People always say Microsoft doesn’t innovate. I disagree. Microsoft understands what ‘just good enough’ for customers is…They’re brave enough to cannibalize their products for the benefit of customers.” A classic example would be the transition from DOS to the Windows operating system in the 1980s. Rosen added, “What really enabled the Internet was Windows 95. Microsoft standardized the TCP/IP stack.” (That’s the Internet’s communications and networking protocol.)
—On the future of Web search: “Google essentially won by default. The early search leaders like Yahoo and Excite became media portals. MSN went to their shows and content. Google did the simple thing. They did search, and they did it really well. It was not about keywords, but about finding what you want on the Internet.”
Asked about Bing, Microsoft’s new search engine, Rosen added, “Some of the Bing features look like they take advantage of patents we filed in the first six months we were working on it.” (This was at MSN, and the patents were on semantic understanding of text.) One thing is clear: it’s still early days for search, and all the applications around it.
