Conference on Global Entrepreneurship: Economic Development for Asia and the U.S. – 1B Global Entrepreneurship and Technology

Philip Lui: I think we’re about ready to start. First of all, I encourage everyone to please come and sit closer, because we’re fortunate enough that we can really interact today. This is really meant to be interactive and it’s really a chance for all of us to become acquainted and for us on the panel to try to maybe share some of our experiences, which hopefully might be of some interest in whatever it is that you’re doing.

My name is Philip Lui. I’m CTO of Knoa Software, which is a company that builds software technology. We’ve been in New York City building technology since 1987 through several incarnations of different kinds of technologies. Today, we do enterprise software for companies that are trying to understand better how users are using their systems and how well their systems are performing. Being in charge of our technology I’m very much involved with the engineering team, building very low-level systems and servers and complex systems, but it’s a very challenging environment. I was asked to preside on this discussion, the title being, as you can see, Global Entrepreneurship and Technology. At least, it narrowed it to three topics. We know it’s global, we know it’s about technology, and we know it’s about entrepreneurship, meaning it’s all about probably small businesses: how do you survive in this environment, especially today, when it is becoming global?

On that note we have two very distinguished panelists. Unfortunately, we lost the third one, but I think we will be able to go fine. Because the one we lost was in biotech and because all of us are in the computer industry, it actually makes it a little easier, because we’re not trying to pull in biotech, which would cause different kinds of problems. It’s unfortunate, Mark’s in China, and he has already spoken, so he was unable to attend. I apologize for that.

We have with us today Michael Ribaudo and Yee-Ping Wu. Michael is the University Dean for Instructional, Technology, and Information Services at CUNY. Yee-Ping Wu is the COO, Chief Operating Officer, at Knoa software; also we work together at many of the technology development. With that, I would like them to spend a minute to introduce themselves, and I thought from there I would do some opening remarks just to frame the problem and kind of spring the discussion. After that I will ask them to comment and we’ll interact. I think, given this format, we can probably take questions during or afterwards, just move very freely as we go. With that, Michael if you could please start.

Michael Ribaudo: Hello. My name is Michael Ribaudo and I’m with the Central Administration of the City University of New York. I’ve been there for a long time. I started out in the 1970s at City College, actually Betty Lee Sung and I were talking about what it was like there in the ’70s. My title is a bit more complicated than it was stated. I’m the University Dean for Instructional, Technology, and Information Systems— mostly the Chief Technology Officer for the University. That has its own unique challenges. I can speak from a central perspective as to what we’ve been doing and what we’re looking to do to enhance students and faculty access to technology. I can talk a little bit about our successes today, limited as they have been, with partnerships on the industrial side of the house. We’ve been speaking just informally about some of those factors that may be unique to CUNY that prevents the University from emulating some of the behaviors that our more well-to-do sister institutions, notably on the West Coast, have been able to begin with the university and industry partnerships that have real and lasting effects of the kind that we have not seen on the East Coast in general, but more particularly within New York City today. I’m sure we’ll have a nice discussion after the prepared remarks and I’m looking forward to sharing it with you.

Yee-Ping Wu: I was just on the previous panel just a few minutes ago, so I think a few people are here that were there as well. You will hear similar comments possibly related to my own background, but certainly for those who have not heard, let me just begin by introducing myself first. I’m the COO and one of the co-founders of Knoa software, but Phil and myself just started the company in 1987. It’s very interesting in terms of the climate in terms of when you started the business of a software company in New York City. I think in those areas I have a lot of experience that relates very well in terms of the global entrepreneurship and technology area. I think some of you followed the discussion we just had, which had so much to do with some of the West Coast culture, how entrepreneurship and technology developed in the West Coast versus here, particularly with the academic institution, in terms of how we do business and developing ideas, which is an area that should be discussed. There’s a tremendous amount of resource around the East Coast, particularly in the New York City area. A lot of academic institutions have made a very productive effort to work much better together with the private sector of the business. I think today, particularly in the globalization of the marketplace, I think this is the area I’m very interested to talk about and I’m sure that the audience may have a lot of input in this area. I hope that we can have almost a round table discussion going on for this session.

Philip Lui: Thank You. On that note, let me just make a few opening remarks to try to frame the discussion. The areas that I am looking at are very much from a technical perspective in terms that relate to all the way from the conception or the inception of the idea to development to leading to deployment, the role of education in our institutions, and how that supports the sustaining of creative innovation over time. I would like to make a few comments on that.

During the early 1900s, just as oil fueled the industrial age, in the late 20th century, microelectronics has fueled the global information age that we live in today. Within the rise of electronics, it is the countless innovations and their effective application to national and global markets that made the difference then and does even more so today. Today the term global truly means global. Computers and connectivity redefined social and business possibilities, where physical boundaries are now supplemented or even supplanted by new, virtual commercial boundaries that transcend political boundaries and nations.

In the last 10-15 years, microelectronics, in particular, spawned the golden age of the small business entrepreneur. The office of Advocacy defined a small business as an independent business having fewer than 500 employees. How important are small businesses to the economy? They represent 99.7% of all employers, employ half of all private sector employees, pay 44% of total U.S. private payroll. Our employers are 39% of high-tech workers, such as scientists, engineers and computer workers and generate 60 to 80% of net new jobs annually over the last decade. Pardon me, this should have been explained earlier: small businesses produce 13 to 14 times more patents per employee than in large patenting firms; and small business patents are twice as likely as patents from large firms to be in the 1% most cited. It is very evident that small business entrepreneurs have contributed greatly to technical innovation and creativity.

Now within this interactive, hyperactive, flat world, how will entrepreneurs maintain this creative edge? For today’s entrepreneurs to survive and thrive within this hyper-linked, hyper-spaced world requires an ability and agility for innovation coupled with global perspectives in development, deployment, and servicing. Today’s business environment is faster than ever.

Today we all live within a new super-connected, accelerated reality and, as such, must be better prepared for the new technical and competitive business forces at work in this domain. Within this new reality we are experiencing overall acceleration on three basic levels. Number one is the acceleration of fundamental change; number two is acceleration of incremental improvements; and three is the accelerated application of all these changes to the industrialized markets. The corollary is that commercialized competition becomes even more accelerated along with these changes. How do small businesses withstand this competition in this new hyper world? It’s all about originality. For today’s entrepreneur an important part of the strategy for survival and success is to find a real need and innovate. Originality is key. The idea, the will to execute, plus the effort will put you on the edge, but you also need the continuous deep skills to keep you on that edge. So pick a hard problem to solve. Otherwise, if the problem threshold is too low, you will have much greater and likely too much competition.

An outcome also is that learning and reevaluation of your skills, your team’s skills, never stops. As the slide says, learning really is a lifetime activity. Knowledge and education is key not only for the emerging graduates from our schools, but also is a foundation for the nurturing of this creativity in the entrepreneurial workforce. Entrepreneurial survivors and thrivers must continually update their skills, grow and learn, and find creative solutions from this ever-changing world. Knowledge is key, and therefore, our education institutions must supply and maintain the human potential far into the future to sustain our economy. Where are tomorrow’s entrepreneurs going to come from? And even more importantly, where are today’s entrepreneurs going to come from? The seeds are first planted within our institutions.

Once a solution is discovered and built, what next? Is the target the domestic market? Is it the global market? Where and how is the innovation applied to the market? In the growth of a company, once the team is in place at a marketable global marketing invasion is identified, the foundation for successful global technology product deployment must be anticipated. Therefore, even in the early stages of design and planning, a company must immediately begin to think of how to provide a number of critical components and capabilities, such as a plan for the protection and licensing of intellectual property, a plan for insourcing development processes, where insourcing refers to the proper controls of intellectual property and quality control of products developed locally and across the globe. It is the provision of remote services, remote implementation, remote deployment, proper security in a remote location, country-specific requirements such as support for foreign language, such as computer standards in double-byte or Unicode, as an example, a design for scalable date centralization over distributed locations, a design for scaleable production over distributed locations, consideration for accelerating development in parallel in order to keep up with competition from wherever it may come. Is outsourcing a consideration? However, what local resources are available? A self-reliance capability should be considered for global customers; that is, give them tools to maintain, implement, and execute projects themselves. And finally, provide a culture of stimulation and creative solution building for sustaining long-term efforts and competition.

To entrepreneurs this list is just a few activity areas to be considered as business moves forward. In short, a consequence of acceleration is innovation fueled by knowledge and creative stimulation that remains and always will be the key to survival in an evermore-competitive world. Planning for global application development and deployment will fulfill an innovation’s greatest potential in the emerging world market. About those comments, I was wondering, Michael, if you can comment on any part of this or different pieces, whatever you would like.

Michael Ribaudo: Sure. It’s interesting when you look at the history of this technology boom that we’ve seen come about at least since the mid-part of the 1970s. There are certain anecdotal stories that one hears about people who become major successes in this industry. One wonders if today those factors could be found again to stimulate further growth of technology. How many here know the way that Cisco started? Anyone? Cisco, which is probably the largest vendor of telecommunications, hardware, and microcode in the world, you know? It was started actually by two graduate students at Stanford University, a man and a woman, who lived together. One of the things they shared in addition to a domicile was a cat. The cat was prone to be overweight. One of the big things that these two people considered essential in their lives was coordinating the feeding schedule of their cat. Since they were on different biological clocks, I think one was a computer scientist and one was in some sort of engineering or physical science, but they both had offices on the Stanford campus. They figured out a way to take a sun box that had been in one person’s office and was used for research and as a personal productivity tool and figured out how that box could be linked to a sister box on the other side of the network, so that the man and the woman involved could warn each other as to who left the house last and who fed the cat last. That’s a true story. That led to the development of protocols and technology sets that became very interesting to investors on the outside and in short order, that idea, which I don’t know if it was patented or copyrighted or whether or not they sold the rights to the company that became Cisco as a result of their tinkering, but that’s the way Sisco started.

You all know how Apple started. Steve Jobs and Steve Wozniak, two sort of drop-out mentality kids from the Silicon Valley in California were playing in their garage and had an idea about some sort of an electronic box that could do wonders in the videogame market. They produced the Apple and then the Apple 2, and by that time they were able to attract investors to the extent to which they required it to bring that product to market. Steve Jobs left the company and was disillusioned with technology for a while, then came back for a dollar a year and now has turned that company around from what it had been just a few years ago to a major player in the field, largely by introducing a new technology to supplement what their core business was. And that is what you see people wearing around their necks in the subway in large part, the iPod.

Hewlett Packard was invented in a similar way. David Packard and his friend decided after coming out of the service that there might be a market for the ideas that they had on the engineering workstation side of the house. They built their prototype in a garage. Even Bill Gates. Bill Gates started not as the entrepreneur superhero that he is today, but as a kid who dropped out of Harvard initially and decided that he and a few other people might take advantage of the IBM PC that had been introduced in 1982 and from IBM’s perspective was lacking an operating system that could sustain its growth into the later part of that decade. They put behind them the MS DOS operating system that they sold to IBM for a song. He’s the most wealthy man in the history of entrepreneurship today. Charles Wang at the Computer Associates—same thing. Michael Dell of Dell computers was a drop-out from the University of Texas system, who wanted to tinker on his own while he was still in the dormitory, telling his mother and father that he in fact dropped out of college and, in so doing, was able to launch, mainly because of the rethinking of how the personal computer business had been conceptualized today, a new way of dealing with production and with innovation that today has him being the top computer hardware vendor in the world.

I don’t know if those success stories, those wonderful innovations, “the light goes on in a box above your head” sort of way of conceptualizing technology can work today. We were talking as I said about the need for colleges and universities to partner up with industry and why is it in the case of New York City area and in particular City University there haven’t really been any breakthroughs that could be pointed to as exemplars of industry and academic collaboration. And I think, one of the large factors that accounts for that, at least insofar as CUNY is concerned, is that unlike some of our brethren in the West, most notably the Stanfords and the Berkleys and the UCLAs, we don’t have the capital, or we have not made available the capital on the university side to invest as we are partners. We have not been able to identify the raw capital in terms of dollars that could be our share of venture capital towards moving forward with technology innovations. But more importantly, we have not been able to identify the people as resources that we could put on the plate as co-equal partners with the vendors and entrepreneurs in the private sector, who could buy this talent and dedicate their efforts in a joint venture that might lead to success for both parties.

Another story, which is based on the liberal arts model…the people who wrote the first real word processing package that academia embraced, were professors in the English Department at UCLA. They thought this new device that they had come into contact with might be a very nifty way to employ their teaching strategy in the teaching of English, most notably in writing skills. They invented a protocol that they called “Wanda.” That became something very interesting to colleges and universities across the country. As these English professors began to share their resource with colleagues in English Departments in other universities, the administration of the University of California found out what they were doing, locked them out of their offices and put padlocks on their file cabinets so that they couldn’t get at the resource. That was because the University of California had very definite rules regarding copyright and ownership and they felt that what their English professors were doing, naively in fact, out of UCLA’s English Department, was an infringement against what the university felt were their rights to own, to market, and to judge what the intellectual property of their employees produced. That has never been a question for City University. We’ve never had any innovation that great, at least not that I’m aware of. There are people in this room, like Professor Watkins, who had significantly more experience than I have in the University, who can correct me if I’m wrong. But I just don’t think that the orientation and the ethos of the people running the University has really been there to develop those partnerships, but more importantly to find the resources to devote that could make them successful and could make us viable partners with potential people in the private sector, who would think that a joint venture would be profitable for both perspectives. Professor Watkins.

Professor Watkins: Can I just add a couple of low-tech examples that everybody knows about: Nike. That’s what Nike did. It was Steve Prefontaine, a track coach at the University of Oregon. He took his wife’s waffle iron. [laughter]. This is true. It is absolutely true. And then he made the kind of sole for running that Nike then, of course, developed. And that was innovating. That’s not the sophisticated innovation you’re talking about, but it goes back to something you said, imagination and innovation. And the other one is Gatorade, University of Florida. That’s what they did. If you’re losing salt, you’ve got to get something back into it. So they developed Gatorade and that has been fairly successful, I guess. You don’t have to become Michael Dell to do these kinds of things at low cost, imagination, try things out. Use a waffle iron, right? But it became a high tech.

Yee-Ping Wu: You know, it’s very interesting because I actually, what I mean by high-tech or low-tech or analog, you know, technology. High-tech is really a tool; it’s really not the idea. It’s the tool that is transformed to do things that give you a whole other level of capabilities. I mentioned earlier, Phil and myself actually started the software company in ’87. We certainly may not be Hewlett Packard or some of those industry icons—well hopefully we will—but certainly I think that we came from very diverse backgrounds. Both of our backgrounds are in music. We both met at Julliard. Phil was a composer and I, myself, was a pianist. When we met, he had the intention that I would play his music, but not actually start a company. He was writing very contemporary, classical and tonal music, extremely difficult to play. I was challenged by it; from all my classical background, I was really very interested to play a very difficult type of music. From that level, I’ve come to know his music very well. You never know…in terms of diverse of the background, it actually gives you a lot of advantage, rather than disadvantage.

People always ask me, “How did you manage to go from a pianist,” my own background performing concert pianist, “going into software industry.” A lot of people made the common connection, because they said, I don’t know whether it was scientifically ever proved, music and math, there is always a relationship. I don’t know whether that’s true or not true. I can only tell you that I think it’s really creativity. Creativity is the link to a lot of different things. Expression is in many different forms and shapes. It’s really not an issue of high technology or low technology, it’s really the creativity that you all were talking about. In early days, going from the music world to the software, in many ways, to have a tremendous amount of common knowledge between the software building and either you’re building a piece of music or performing a piece of music. The software, by nature itself, is you could always be better and better and better. Playing a piece of music, you’re never finished. You can play concerts, but the fact of the matter is you can always be better.

So the discipline, however, what has transpired, is actually not an issue of music or technology. What is actually very critical besides creativity, the next piece is really the discipline. Because it’s a huge advantage, particularly in classical music, there’s a lot of discipline that goes into a piece of music, how it’s actually being put together and how you perform. A piece of software is the same thing. Because these kind of discipline, no one ever tells you how you must play a certain standard of a piece of music, as no one ever really tells you how a piece of software ought to be. However, when people either listen to it or use a piece of software, they know when something is good and something is not that great. What technology, creativity, the ideas, and the discipline, it is really applying to the various different things that you do.

I think the topic has so much to do with globalization today, what’s the difference between doing business today and yesterday; what does it mean in terms of globalization? The core aspect of it, when you really come down to globalization, and I would really like to hear some of your input as well, I think globalization is so much the key that today, the world is, when you think about when you are designing a product, when you’re actually building a business, we used to, some of the older generation I’m sure still remembers, there was such as thing as import and export. In fact I remember one of the Seinfeld episodes was talking about—I’m not sure if you watch Seinfeld—he was an exporter. Those have practically disappeared from the [inaudible]. One of the major reasons that actually disappeared from the [inaudible] is because you don’t today think of such a thing as a borderline. Think about when you do a search in Google, when you do an Internet search, you don’t think about that the search might come back to you in different languages. But the fact of the matter is there is no such thing as a borderline. The minute you’re building a product, you are thinking globally—you need to and if you’re not, you need to think about that. And if you’re being educated, and actually one of the things I am interested to find out, I heard that in the universities there is a tremendous amount of interest right now in flocking to learn foreign languages.

America, particularly, is more isolated in terms of speaking different languages. When you go to Europe, people speak an average of three different languages; people are very comfortable speaking multiple languages. In America, you take for granted, well, I myself, I speak Chinese as well, but, you take for granted in America, only until very recently, you would see on the street, the signs, everything is based on English. And that’s because, today however, if you continue to do that, the rest of the world doesn’t function that way. The minute you’re outside of America, you see the way they communicate all the way down to the signs, the street signs, and all different types of symbols that you see. It’s very much so speaking on a common sort of a symbol.

So this is the way we do business. We as a software company, I can only share with you our experience. Certainly, from day one of designing a product, we assume that product is going to be used globally. There are actually differences as an entrepreneur when you’re building that kind of product that you’re building as a global concept. You are starting from day one, you’re designing a product, I’m sure you all hear sometimes double-byte and all that. Because the double-byte, what that means is that in your software, you now have to accommodate the fact that this piece of software will be able to go into any kind of market, will be compatible to that environment. From the first day of designing the product, you need to assume that it’s going to be a global product, and from that stage on, how that piece of software is being implemented, how that piece of software is being deployed, how that piece of software is being supported, and the services, many of these things have to be designed, because think for a moment: today even companies that you do service with, our software places, we’re building software with a direct focus on the enterprise market. A lot of the Fortune 500 companies are our customers. Almost from the instant that our software is licensed into their company, almost immediately that piece of software is being used across the board, their entire workforce. IBM, for example, yes you happen to be doing business with some of IBM America, but IBM has a workforce around the world. Our implementation with IBM, for instance, is around 20 countries. For every single implementation we do, immediately it’s for 20 countries.

Our tool of implementing, yes you may in certain circumstances have a local joint venture, you may have a local presence with different companies in that particular region, but generally speaking if your company also can design certain tools that are remotely deployable, remotely implementable, those are also going to be a very critical element in how you are able to have a fact in terms of how you’re product is being implemented and serviced.

We hear so much about outsourcing. In America, many of the companies have a great deal of fear about this whole thing: is it actually good or is it actually not that good? There is a different aspect of things that depends on where you stand. If you are an entrepreneur, you’re going to worry about your cost, you’re going to worry about the efficiency, and you’re going to worry about a lot of different issues about your resources. And outsourcing might be one of the opportunities and the resources that you can tap into. But if you also at the same time think about how you build your product, in terms of we now are creating a new word ourselves, called “insourcing.” If that’s the means that when you’re building a technology, when you implement it is necessary that you have to go on location for many of the different mechanisms, yes there are certain mechanisms that are more appropriate for outsourcing, but you should also be able to design a product so that, from day one, the technology, the tool that you build, is able to deploy and implement remotely, using all the capability of today’s internet.

I may give you an example, today 100% of the implementation of our software to these huge Fortune 500 type of companies is all completely done remotely. That’s because of globalization; we designed, from day one, our tool so that we are able to implement our software remotely. In this case, we are actually insourcing and continue building our own force in the U.S. There will be certain elements, however, that we might be actually able to build with other countries, and outsourcing some of your workforce and resources. But certainly, again, these are affecting how you actually build up your company, build up your workforce and so on and so forth. So, feel free to make some comments.

Philip Lui: Michael, how many different locations are there in CUNY?

Michael Ribaudo: Well, depending on how you count, it’s either 20 or 21. There are six community colleges, ten senior colleges, a graduate school, an affiliated medical school at City College, and a Law School. We haven’t grown any in the last 20 years. Oh, and the School of Professional Studies. We have grown in our enrollment. I think we’re at the highest we’ve been since the mid 1970s. The faculty is not as large a group as once they were. The University has made do with fewer full-time faculty and more part-time faculty. That’s partially an economic result of the times that the University has gone through.

We’re looking at the budgets from the city and the state in somewhat of a different fashion now. We have a mayor now who is more closely aligned with a sympathetic view of the University’s plight than the mayor who was in the City Hall before him. And the state, although we hear a dire forecast for the next few years in terms of what the deficits will be, the governor and the legislature just voted one of the largest capital allocations for CUNY that we’ve ever seen to be implemented over the course of the next six years. And when you talk about capital money, that’s the money that has allowed us in large part to make the strides we’ve been able to make in terms of technology solutions for our students and faculty. All of our networking connectivity efforts come out of the capital budget. Many of the labs that the CUNY students and faculty find themselves in are the results of capital money infusions. Mainframe computers for administrative purposes and the software to run those are capital money. That’s a good investment, because what happens is the state is floating bonds, the results of those bond issues are passed on, in our case, to public institutions, and the public institutions invest that money to best serve the constituency, whether it be the Department of Employment or Social Services or SUNY or CUNY.

Phillip Lui: So whether these different campuses are across the river or half way around the world, it’s essentially the same problem, is it not?

Michael Ribaudo: It is. And what we’ve done is recognize the fact that given the technology and how it’s evolved, we can make use of economies of scale and provide services from a single perspective that were in the past duplicated at 17 or 20 schools. In the mid-1980s, if you visited any of the CUNY schools, you would have found a traditional computer center with an IBM mainframe computer to service the needs of that local college insofar as its administrative computing priorities were concerned. What we did beginning in 1985 was to establish one central hub for mainframe computing and given the network we have been deploying today and the robustness of that network to meet the needs of constituent colleges, we enabled each of those colleges to cut themselves loose of supporting an administrative mainframe computer center.

What we did in so doing was not to take the money that the college saved out of that college’s budget, but allowed the president to make other decisions as to how those dollars were allocated. We encourage the presidents to make those dollars available for increased exposure to technology for students because it made sense that the students, being a major constituency, benefit from whatever economies we could identify, and could lead to further investments that might benefit them as a main constituency. We continue to pour lots of money into the university’s networking and connectivity efforts.

The colleges in the last three years have been benefiting from a Board of Trustees initiative that called for the imposition of a computing fee for students that would be added on to tuition but returned almost in total to those campuses that generated that income. And the purpose of that infusion of funds was again to benefit students to increased access to technology. When you’re talking about the numbers of students we have at CUNY, it’s not too difficult to realize that the imposition of a $75 per semester per student fee involves, university-wide, the generation of some $24 million worth of income. And to spread that $24 million back to the 18 or 19 constituent colleges. To have that money appear every year as allocation that the colleges can count on makes it much easier for administrators of those institutions to plan and to justify to the many constituencies on campus that the planning effort will result in some timeframe of everybody getting what they want.

CUNY, at the moment, is relatively well positioned regarding technology. We are probably in a position where we’re benefiting our students more than we are our faculty, but that has to do with the basic nature of the University’s attitude toward its faculty and that pretty much has been the faculty is looked upon as a way of generating additional income for the University, either through grant support or through relationships with entrepreneurial vendors and the results of those efforts with whatever profits come about again are viewed by colleges and universities as fungible dollars that they can use to support other efforts.

Philip Lui: Does the institution support courses aimed at corporations to enhance corporate employee skills or is it really focused on a traditional type of continuing education out of high school? Because one of the comments I was trying to make was I think it is really important for continuing education. I think it’s vital to the life of creativity, I think it stimulates that, I think it’s vital to the life of the companies because employees must continue to grow. I was wondering, does the University offer courses that are aimed maybe a little more focused in that area?

Michael Ribaudo: Pretty much to date, the University as a single entity hasn’t really had that orientation. We’ve had an adult and continuing education program mainly as a result of the coordinating of efforts that the individual campuses get involved with. If you look at the interests of the individual campuses, their presidents and the people who those presidents charge with implementing those kinds of local programs, you’ll see a variety interests as a function of what the colleges think they should be involved in, to some extent, in a very naive way, what will sell to the constituency that they’re marketing to. From the point of view of the University, actually we haven’t come that far since the 1500-1600s when Bologna and Paris were set up. The curriculum has been, and most people will argue rightly so, viewed as the purview of the faculty in the various disciplines who are proposing programs of studies that result in rather traditional exposure to knowledge within a particular discipline. And the continuing education effort has been viewed as existing with a firewall separating the views of the traditional purposes of the University from the new focus that many colleges and universities are taking with a view towards embracing the needs of non-traditional constituencies. Non­traditional constituencies being all those people who are not particularly in the market of seeking an Associate’s degree, a Baccalaureate degree, or a professional, or Masters or a PhD in a traditional college discipline.

Male Audience Member: Are contining ed studies profitable for the universities?

Michael Ribaudo: It depends upon how they run. If you look at the economics behind it, you’d be silly not to be able to make money out of it, because what you’re paying for in terms of the instructor is something called a continuing education salary, which is hourly based and generally doesn’t come with many benefits. I think we still pay our continuing adjuncts, I may be wrong in this, but $35 an hour, and we pay full professors upwards of $80,000 or $90,000 a year, but more importantly those full professors are getting benefits packages that might equal in some dollar value at least half of that take home salary, whereas the $35 per hour continuing ed instructor or teacher is just getting that $35 an hour; and in order to make a living, much like the adjunct faculty that supplant the work of the full time faculty, have to be like itinerant craftsman, moving from campus to campus over the course of the day, generating enough income to support themselves and their families.

Male Audience Member: Are there figures available for how much money CUNY-wide has been generated by continuing ed programs and is that money put back into the individual campuses or is it distributed CUNY-wide?

Michael Ribaudo: It’s not distributed CUNY-wide.

Male Audience Member [Professor Watkins]: I know the graduate center has a huge continuing ed program.

Michael Ribaudo: I think Baruch has one of the largest ones. I really don’t know from where I sit where that money goes. My experience and impression is that for the most part it stays in the colleges. The attitude of the Chancellor’s Office has been, and I’ve been through five or six Chancellors, that whatever the colleges do that they’re best in a position to do, we should encourage that, but we should not take off the top from it. It extends beyond the continuing education area to alumni relations. Colleges within the system are much more independent when it goes towards their putting a reach out to their alumni because nobody that I know ever said that they are a graduate of City University. They’re either a graduate of Hunter or Baruch or Lehman or City. And people’s primary allegiance from the perspective of an alumni basis is to the college that they graduated from. Both from the continuing education perspective in terms of money that are generated through that arm of the college as well as from the development efforts that are focused on alumni, the colleges themselves pretty much organize their own efforts and profit from whatever they are able to take in.

Male Audience Member [Professor Watkins]: Your question about ‘do you make money?’ NYU makes a lot of money through its continuing ed program; they combine their continuing education division who also has credit and non credit, degree and non-degree, they make money. Also the School of Professional Studies, in response to your question, is that it is designed, in fact, tailor made programs. As the Chancellor

Michael Ribaudo: Yeah, I wasn’t there. That was the intention…

Male Audience Member [Professor Watkins]: That’s the intention, that’s what they’re trying to do, and they have begun to explore that in an entrepreneurial way.

Michael Ribaudo: They’ve been in business for almost a year. And I was there when one of the discussions took place about how through our traditional ways of interacting with students we couldn’t meet the demands of groups that were coming, looking for alternatives. The case in point were the United Federation of Teachers who were looking for alternative ways of certifying in-service teachers that didn’t include traditional School of Education’s “Masters Programs.” They wanted to package a particular constellation of coursework that they could make available to their constituency, in-house teachers, who by going through this experience could justify requiring the Board of Education to pay them more money. It wasn’t a traditional Masters Degree—secondary ed with a specialty in American History—it was this constellation of four or five courses that would be designed in conjunction with the union and the university to meet the needs of an identified constituency. That was one of the reasons why the School of Continuing Education was started, because it was viewed as a vehicle for being able to legitimately deliver those services as additional constituencies made themselves known and identified the needs that they wanted to provide using that affiliation.

Female Audience Member: If you are an intelligent student, what would be the key to success for global entrepreneurship in relation to technology? Any of the presenters…

Philip Lui: So, the question is how to help students learn more about becoming entrepreneurs if that’s their ambition, something of that nature?

Female Audience Member: We are still kind of learning, but to tell them, ‘These are kind of key points that…’

Michael Ribaudo: Key points, right. Yee-Ping, would you like to answer that?

Yee-Ping Wu: I think if you have a great idea, you should pursue that great idea. There is no such thing as an entrepreneur course. I don’t know, maybe there’s a school, do they have a….?

Philip Lui: Well, you can learn techniques.

Yee-Ping Wu: Yes, you can learn the business plan you, you can learn a lot of things. If you are talented, if you have a great idea, you need to learn this, persevere and you need to get your idea and get people to hear your idea. At the very beginning, during the ’80s, when I was still playing concerts, I knew that in order to start the company, we really needed to raise the investment. Now, understand my entire life was in many ways isolated in the classical music world, so I didn’t have the kind of language and the kind of network that I could approach and talk to them about the idea, in terms of looking for the investment and starting a company. But you’d be amazed, and that’s the wonderful part of living in America, I think that if you really do your homework, really believe in your idea, you don’t need the whole world to listen to you, you need to begin to get somebody to listen to you. Being an entrepreneur is the kind of thing that you have to develop a thick skin. You need to be relentless. I remember that in the beginning I talked to a lot of people and they really didn’t care to listen to me. But the idea is, if you’re intense, if your idea is a good one, you believe in your idea, you really have thought through you idea, you talk to people and through that effort, by the way, you also learn a great deal: how you completely improve the way you present your ideas. I must have talked to hundreds of people before I raised, and this is 1987, before I raised the first million dollars to start the company.

So being an entrepreneur is very interesting because, at the time, everybody told me, “You’re not going to be able to close this deal,” because in 1987, I don’t know some of you might be old enough to remember, that on October 19th, the whole stock market crashed. There’s an advantage in sometimes being ignorant is that you are so blinded to the reality of the difficulties that you are so focused, and because of that at the time, I would need to say that today perhaps I would listen more to all the difficulty and all the obstacles before I even start, but in those days I was so focused on getting and raising the investment that I didn’t even think twice about it. By the time I talked to fifty people, I was getting very good at it, telling people about the idea. And I also remember when the first investor said to me, you need to write a business plan, I didn’t know what a business plan was. I ran home, talked to Phil, I said, “We need a business plan.” And he said to me, “What is a business plan? Let’s go to the library.” [Laughter.] We went to, and I don’t know if today’s entrepreneur can do that, but in those days we went to the 42nd Street library. It’s a wonderful library. That library continues to be an incredible library. I don’t know how it’s possible it’s there, just right around us. We pulled out some book about business plans. We wrote our first; you know, the business plan’s really reflecting, it’s a road map to the things that you are truly going to do. People often think that you can make up a business plan, well, if you’re doing a real business, you need to have a real road map to your business. So what happened was that in two weeks we came up with a business plan. Again, if you are persistent and relentless…

Philip Lui: But I think an important point about that experience was that the investor was investing in us, not our business plan. He said to us, “It’s whether we believe in the people. Because you’re going to take better care of our money than we’re going to be sitting there worrying about it.” I just want to sum up a few things because I was on the front lines, in fact, this came, talking about innovation. Sometimes it’s very magical where innovation comes from. It’s really a flash. When I was a grad student, I was composing music and one day I picked up a New York Times and I saw a picture of a [inaudible] sitting in the newspaper. I can’t explain it. I got so excited seeing the picture of this computer. I was just beside myself. And who knows where that comes from, I have no idea. And then, from there on, I just frantically started learning everything I could about these things called computers. I taught myself programming languages. What I tried to do was I said I was going to take everything I knew about computers and put it in the computer.

Then in our middle period, it was multi-media. One day I was sitting there and I picked up another magazine—magazines have quite an influence actually—I picked up some magazine and there was this new thing called multi-media. I said, “What the heck is this?” So I started investigating and I starting writing some programs around it and talking to my engineers and so on. That led to a very successful business in our middle period and, literally, our products were released around the world. Talk about globalization in those days. We built tools, we built products. The next thing we knew, our customers in Microsoft say, “We have to release this in Arabia.” We had to figure out how to translate the programs and the language into Arabic, which was going from right to left. We had to adapt to that.

And the third incarnation of what we’re doing today: one day I was just looking at this computer and I have no idea where it came from, an idea just came up. It’s all about, the principle is very simple, the interception, messages, because I remember some of our early work years ago that I had done some work in intercepting in Windows APIs. Then I began to look at these other things. And there was a connection that derived from the current area. But just to follow up on what Yee-Ping is saying, these ideas, you can’t explain where ideas come from, but I think the best thing is to learn as much as you can about everything. And then one day something just clicks. It’s like music: you get an idea for a piece.

I think the other half of it is in our story, I was in charge of technology, Yee-Ping did the business. I think that’s a very important partnership. However you get that, it’s very important to find someone that can complement one and the other. When you’re doing technology, you are diving deep down and when you come up for air, you don’t know your name, you don’t know who this person is and people ask you questions, you have no idea what’s going on. So trying to do both is extremely hard. If you’re fortunate enough, you have someone who can take care of the business part of it and there is definitely the synergy. That relationship is core. Yesterday, we were interviewing someone for a sales job. He said their company’s in the Dark Khan era. They ran through $20 million in nine months and they spent 12 of it giving to a company to build the technology. But the business guys had no clue about how to check the technology and whether it was for real or not, and the company just tanked. I think between the ideas, the passion is really, as I was saying, when we raised the first money was because they believed in us, because we had so much passion. It didn’t matter whether we could dot the i’s and cross the t’s in terms of our business plan because it certainly was not on our business plan. These are the intangibles, but it’s also what makes life worth living. You will also find that people say, “How can you work that hard—day in and day out?” I tell you, time disappears. You have no idea how hard you are working or how long you’re working. In a nutshell, those are kind of the three ingredients.

Male Audience Member: Phil’s comment about tanking is related to a question I have, especially in high-tech. In New York City, 70% all 23,000 eating establishments fail or change within the first five years and I think that’s also pretty common in new business in the United States, about 70%. I wonder, do you know how you can work so you don’t tank, but do you have any idea, between the three of you, what portion in the high-tech business, all the examples like Michael Dell, what about people? What happens in that business? Do 70% of them start a lot of business or is there a high percentage? …..

Yee-Ping Wu: I think that’s one part of the reason today the way the VCs look for return is when you really look at it, ten to one, why it’s so unrealistic, because they figure that nine of them would tank. They’re looking for the one out of all ten; one of them will be a big shot. You made some incredible examples for all the big successes. And I bet you the number is even higher, because obviously, we just came out of the bubble a few years ago, the dotcom. In the dotcom, many of them had great ideas but not really great products. By the way, in many ways, yes, the dotcom era failed; of course it’s tragic in terms of a lot of people losing a lot of money, but on the other hand, I’m actually, not to say I’m glad, but I’m actually somewhat pleased with the fact that the business went back to its sort of noble condition. I think this is the end. It’s not one thing or the other, there are so many balances. Nothing can be said better than when you think about the yin-yang balance. The issue here is not only because you have a great technology and therefore you’ll be successful or you have a great business and you’ll be successful. I think that failing has so many different dynamics. Also there is so much to do with the competition. I think today competition is so much to do with the globalization places. Competition has become even more abrasive; you’re immediately at the same time competing. The world is flatter, the famous quote, but right now it’s happening. We are talking about, we don’t have a whole lot of time, but I think that when it comes down to it, yes, I think to have a business growing from its seed to its success is a tremendous treacherous road. You have to be very, very quick to not only react, of course, you always, particularly in technology, you always have to be thinking about what’s next. As long as you are not preparing for the next, I think that you are getting into incredible danger in terms of your business.

Female Audience member: I have a question. As a just-started entrepreneur, how did you protect your idea from other people who have a lot of money and might take your idea and start business, before you start?

Philip Lui: There are numbers of ways to do that. Your best protection actually is the advancement of your development. Even with patents, it’s only because you’re going to be ahead of your patent. By the way, when you patent, it becomes public domain. It’s published. And it’s also your requirement to disclose for the patent office how that invention works. But even with all of that we’re always looking ahead.

Male Audience member: You can have proprietary knowledge that isn’t available to the patent office.

Philip Lui: Oh, absolutely.

Male Audience member: The problem in mathematics is that Hewlett Packard own patents on mathematical algorithms that professors can’t teach.

Philip Lui: Right, exactly. Along the way, there are always mechanisms of NDA. You have to be careful who you disclose what to what. But ultimately if you are building it, you are already probably planning things ahead that you’re not disclosing in that initial meeting and that’s always your best protection ultimately. But yes, you have to take that chance. Everybody faces that, even if you sell it to another company. This company is going to be looking at you and you’ll have to, as they say, open the kimono, and you have to tell them what it is and they may say, “Oh, we looked at it, we don’t like it. Thanks very much.” And then they go and build it. You have a problem. They may have a problem also. We’re talking, it could be potential lawsuit. Or you also have a problem because they could crush you. But that’s right, you have to keep moving. Even though my current patent’s almost done, I’m already figuring out the next one and rebuilding everything else along with it, because the business and the patenting are sometimes parallel, so you have to keep working on it.

I want to thank you very much for coming. Thank you, panelists, for sharing your time and views.