No Risk, No Reward

Dave Lyon thinks a lot about this dilemma. He is chief designer at the Buick Brand Center. He is 33 and has worked at GM for 12 years, most recently with Cadillac. Now it is his job to change the way that Buick imagines the future of its cars. The Bengal was his design.

"This used to be a very risk-averse place," says Lyon. "Car design was determined in focus groups. We would take different ideas to the customer clinic and then go with the design that was most popular. The idea was to take the risk out of the decision -- just do what the customer wanted.

"But with focus groups, people are put in small rooms with bad lighting. That doesn't put them in the mood for the future. In focus groups, people seem to be more conservative than they really are. I think that people are more open-minded than we give them credit for. And besides, what did well in the clinic one year might not do so well three or four years later. By the time the car is actually released, the world will have moved and people's perceptions will have changed. So you aren't eliminating the risk. You're doing just the opposite.

"I look back at the 1950s, when Buick made dramatic cars: the '53 Skylark, beautiful convertibles, powerful sedans. We aren't doing that now, making young people say, If only I had enough money for one of those. Instead, we've left ourselves with a line of very competent appliance cars. They're like dishwashers: They're okay, but you don't fall in love with them. For people to let go of that much cash, they'd better be in love. And a conservative car doesn't get people to fall in love.

"So instead of designing cars in focus groups, we've started using concept vehicles as a way to show where and how we can take risks. We take the car to auto shows, where people are tuned to think with an open mind. Then we come back with a strong public reaction -- and in a much stronger position to negotiate.

"That's where the Bengal came from, and the LaCrosse [a futuristic, four-seat sedan] before that. We said, Maybe we could make a vehicle that is dramatic enough to be noticed by younger people and that still appeals to older customers. No matter how radical we go, if the car can't be recognized as a Buick, we've gone too far. So we included cues to make the designs recognizable, like the Buick grille, port holes, and cross-car taillights. It's a very different execution of classic Buick traits -- a way of designing a car that's new but not so new that it could be a Hyundai."

Caught again in an industry downturn, GM recently decided not to put the Bengal concept vehicle into production. The fate of the LaCrosse hasn't been decided yet. In the meantime, Lyon is working on an overhaul of the LeSabre, one of the company's most conservative models. That redesign won't appear for several years, but Lyon promises "a dramatic statement."

VII. Innovation: The Pasadena startup machine

There was a time when every dorm room, it seemed, was a startup waiting to happen. Throughout the 1990s, kids cobbled together business plans between classes, won funding, and jumped into business. Risk? What risk? Plunging into a new venture seemed all too easy.

Ah, the fickleness of youth. These days, most of the kids are back in class. Venture capitalists say that they're seeing precious few proposals out of MIT, Stanford, and almost every other university, save one: the California Institute of Technology.

In fact, Caltech says that it actually spun out the same number of startups in 2001 -- a poor time, needless to say, for new ventures -- as it did in the boom year of 1999. While startup enthusiasm has faded on most campuses, Caltech has blossomed into a robust new-company machine.

This didn't happen by accident. During the past seven years, Caltech's Office of Technology Transfer has carefully developed a strategy for cultivating commerce. "We focus on nurturing entrepreneurs scientifically more than other schools do," says Rich Wolfe, the office's associate director. That is, the university focuses more on the science itself than on the ensuing commercial opportunity.

That's what grabbed Uri Cummings and Andrew Lines, two PhD students at Caltech who founded Fulcrum Microsystems Inc. in 2000. "There is a pervasive philosophy at Caltech that no problem is unsolvable," Cummings says. "There's a focus on scientific ingenuity that is thrilling to be around. Caltech has so many entrepreneurs because the school doesn't make it about business or focus on how much money they'll get out of it. Caltech is a catalyst, moving technology from the university out into industry, and students are thrilled to be a part of it."

Before starting Fulcrum, Cummings and Lines worked for six years with Caltech computer-science professor Alain Martin on an asynchronous-circuit design for semiconductor chips. They ventured into commercialization while still in the throes of their doctoral program.