Semantic Web R&D Fundingin the Private Sector

ISWC 2006

Dr. Mark GreavesVulcan, Inc.

markg@vulcan.com (206) 342-2276

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First, the obvious...First, the obvious...

New sources of national military and economic advantage

– Technology superiority / avoidance of technological surprise

– Intelligence analysis and public sector decision support

Support of public institutions (Universities, Research Institutes, flagship industries)

– Education– Basic science for national-scale

issues– Citizen interaction with Government

Internatonal Leadership and Reputation opportunities

Government-unique information problems

Developing a profitable salable product

– Technology agnostic unless it offers a unique market advantage

Favorable ratio of financial reward to market and development risk

– Identified, qualified customer base (could be an advertiser base)

– Credible ROI (Return on Investment) argument

– R&D investments have payoffs in the short term

– R&D risk is limited

Sustainable advantage in a crowded marketplace

– Patents or hard-to-duplicate IP– First mover advantage (eBay)

Public Sector Goals forSemweb R&D Funding

Private Sector Goals forSemweb R&D Funding

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Private Sector R&D Funding TypesPrivate Sector R&D Funding Types

What is cool from a business point of view is rarely equally cool from a technology point of view, and vice versa

Traditional corporate internal R&D to support an existing line of business– If you are lucky enough to be in one of these (Boeing, IBM, Lucent, British Telecom, etc.) then you

know the upsides and the downsides.– Often supplemented with public sector R&D contracts– Very occasionally will partner with others for specialized R&D

Consulting / prototyping for other organizations– Generally, a business of contacts and long sales cycles– Examples: TopQuadrant, ontoprise

Venture capital – Semantic web and web 2.0 companies are more difficult for traditional VC firms, because their capital

requirements are often modest• Content comes from users and web mining• Software development is fairly minimal because of leveraging open software• Advertiser revenue models don’t require large sales staffs (eyeball aggregation)• Exit strategy is a buyout, rather than IPO

– Need a VC that• Can put a small amount of money to work and understands the technology (9 people and ~1M users!)• Understands the technology

– Get ready for a wild ride towards a launch

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What Vulcan is DoingWhat Vulcan is Doing

Vulcan is the private asset management company for Paul Allen, co-founder of Microsoft– Development capabilities include philanthropy, externally contracted R&D,

internal technology development, venture capital, and private equity– We occasionally issue targeted solicitations

Vulcan “skunk works” projectsVulcan IPand technology