With our economy still trying to recover, a virtual standstill in venture capital investments, and limited access to public markets, what can technology companies do to remain viable and growing?
I posed this question to Harry Rubin of Heller Ehrman White & McAuliffe. Rubin heads Heller's firm-wide Global Technology Transactions practice and is recognized internationally as a leading expert on business and technology commercialization strategies for technology companies. Having grown up in Germany and Israel before graduating Harvard and Columbia Law School, Rubin transacts business in German, French, Hebrew and English. This past year he spent 80 percent of his time on "every conceivable variety of strategic alliance transaction." Rubin has a particularly strong insight, having practiced international technology law for more than a decade in Washington, D.C., before coming to San Diego three years ago. He is the author of the book considered the standard reference text in the field, "International Technology Transfers," and numerous other major articles.
Rubin noted that now more than ever, technology companies in the electronics, software, life science and communication industries have to prove they have a viable product with viable customers. "Technology must constitute a solution for a problem rather than a solution in search of a problem." Tech companies need to ensure they can survive and not be left behind by adopting a "strategy for their technology and intellectual property, guiding both their geographic reach and application space."
He advises a four-point approach:
Utilizing global resources for manufacturing (i.e., manufacturing outsourcing) and marketing are becoming easier with the establishment of local sourcing offices, Internet resources and consultants specializing in these areas. You no longer need to be a large multinational to effectively utilize offshore development and low-cost manufacturing.
I asked Rubin his thoughts on San Diego and the current business climate. He thinks San Diego is a great city that has been somewhat luckier than other technology markets, because the structural shifts occurring here are not as cataclysmic as in other places, thanks to San Diego's diversified economy. In addition, defense and security contractors are making a huge comeback, which is good for the local economy. As to the overall technology economy, he is convinced there will be no repeat of the halcyon days of the late '90s, but a more "sober, gradual reawakening of technology markets with permanently entrenched shifts." Interestingly, Rubin sees Asia and, to some extent, Latin America as the most promising opportunities for U.S. technology companies. He believes Europe has been in a "slumber" from which it will emerge only as a result of a severe external shock or market pressures that will force countries such as Germany, France and Italy to institute permanent legal, regulatory and financial reforms more conducive to venture capital investments and technology innovation. Rubin concludes, "and, by the way, never underestimate serendipity as a great business strategy."
Baker is San Diego's Ernst & Young Consumer Products Entrepreneur of the Year in 2000 for successfully bringing to market Think Outside's folding keyboard for the Palm and other PDAs. He also has developed and marketed consumer and computer products for Polaroid, Apple, Seiko and others. He is the holder of 30 patents. He can be reached at email@example.com.