Scanning the Commons? Evidence on the Benefits to Startups Participating in Open Standards Development

Abstract

This paper contributes large-sample evidence to an emerging discussion on open innovation and firm strategy. We ask why a startup should participate in an open standards community. We propose four ways that participation might increase a startup's chances of a liquidity event: gaining endorsement of the startup's technology standard, openly developing the startup's technology within the community (but not necessarily gaining endorsement), simply attending physical meetings of the community, and having startup members elected to leadership positions. Examination of venture-funded startups in the networking/data communications industry sectors reveals that those startups that participate in an open standards community (the Internet Engineering Task Force (IETF)) have a greater likelihood of an initial public offering or acquisition. The strongest effects are due to attendance, and conditional on high levels of attendance, holding leadership positions within the IETF. Surprisingly, standards endorsement is insignificant when controlling for simple physical attendance. These results are robust to instrumental variable methods and alternative coding of variables. In two-stage models we also find that prominent venture capitalists might help their portfolio companies by steering them to effective technology strategies, in this case active participation in the IETF, and not simply by lending status.open innovation, standards, entrepreneurship

The Value of Disclosing IPR to Open Standard Setting Organizations

“…Chiao, Lerner, and Tirole (2007) report that IBM spent half a billion of dollars in 2005 on standard development which equals 8.5 per cent of their total R&D budget. Standard setting activities further imply the threat that technologies disclosed to the SSO create spillovers to competitors and grant them a competitive advantage on technology and product markets (Dahlander and Wallin 2006;Waguespack and Fleming 2009). This can be especially harmful if disclosures to SSOs involve technical information beyond the details publicly available in patent documents (Blind and Thumm 2004).…”

Fontes Externas no Processo de Inovação Aberta: Fatores Potencializadores e Restritivos em Startups de Base Tecnológica

“…Contudo, esse processo de busca precisa ser contínuo e fazer parte das rotinas de P&D da organização (Perkmann & Walsh, 2007). Segundo Sandulli e Chesbrough (2009) a inovação aberta consiste nas práticas de utilização do conhecimento e ao buscar fontes externas as empresas reduzem riscos e custos, bem como, aceleram os processos de inovação (Slowinski et al, 2009;Waguespack & Fleming, 2009).…”

“…Dentro deste contexto destacam-se as possibilidades de pesquisas em pequenas e médias empresas (PMEs) e startups que têm recebido atenção limitada pela literatura (Narula, 2004;Waguespack & Fleming, 2009;Neyens, Faems, & Sels, 2010;Lee et al, 2010;Huizingh, 2011;Vieira, Alcântara, & Bermejo, 2014). Segundo Benedetti & Torkomian (2013) a inovação aberta é mais estudada em grandes empresas, em parte, porque as pequenas e médias, bem como as startups, possuem menor capacidade de acessar recursos externos (Narula, 2004;Lee et al, 2010).…”

“…Pela nuvem de palavras constata-se que nas entrevistas as palavras mais repetidas foram "tecnologia", "universidade", "transferência", "mercado" e "patente" (em destaque na nuvem). Constatamos que essas palavras são comuns no âmbito de trabalhos sobre startups e inovação aberta (Chesbrough, 2003;Waguespack & Fleming, 2009;Brigidi, 2009;Abouzeedan & Hedner, 2012;Benedetti & Torkomian, 2013;Hossain, 2013;Spithoven, Vanhaverbeke, & Roijakkers, 2013;Souza & Mello, 2013;Vieira, Alcântara, & Bermejo, 2014). Essas palavras possuem forte relação com o processo de inovação aberta e fazem parte do cotidiano nas startups.…”

Research on Markets for Inventions and Implications for R&D Allocation Strategies

“…A party might also reveal a piece of knowledge or information to gain an 'indirect' reward -one that is pecuniary, but is delayed beyond the moment when the knowledge is disclosed: for instance, small firms or individual inventors may disclose their inventions to establish their legitimacy, perhaps with the aim of increasing the likelihood of subsequent liquidity events, such as IPOs or acquisitions (Waguespack & Fleming, 2008). Free revealing can also provide individual inventors with access to complementary information that they can use to improve their inventions (Raymond, 1999) or to low-cost marketing channels (Gruber & Henkel, 2006;Henkel, 2006), which might be particularly crucial for those with limited resources.…”