Network the Valley!

Panasonic creates a nursery for fresh ideas.

Silicon Valley has a well-deserved reputation for having a Midas touch when it comes to turning technology into money. Much of that success is credited to an entrepreneurial culture that fosters startup companies. Hoping some of the magic rubs off, Panasonic plans to open a 20,000-square-foot incubator next month in Cupertino, Calif., that will house some 15 to 20 startups. To go along with its Panasonic Digital Concepts Center, the company will also set up a $50 million venture capital fund to support the firms.

The incubator is the result of a decision made two years ago, when Panasonic, the consumer electronics arm of Japan’s Matsushita Electric, decided it needed to get a grip on the much-heralded “convergence” of TVs, personal computers and telephones-all of which Panasonic manufactures. The company’s first thought, says Paul Liao, Matsushita’s chief technology officer in the United States, was to build a corporate R&D center in Silicon Valley. But, says Liao, “we realized that the Valley is not so much about R&D as it is about venture startups. They are the new way of doing R&D.”

Investing venture capital in startup companies in Silicon Valley is not unusual for big electronics firms. Last year, Lucent Technologies created a $100 million fund, and MCI WorldCom established a $500 million investment fund. Panasonic, however, appears to be the first to also build a facility to house early-stage startup companies.

This story is part of our May/June 1999 Issue
See the rest of the issue
Subscribe

Incubators are celebrated hotbeds of intensity and innovation-communal workspaces where geeks burn the midnight oil and entrepreneurs sleep under their desks dreaming of an IPO. Charles Wu, the Digital Concepts Center’s director, says that’s exactly what Panasonic is hoping for. Matsushita engineers and managers will be able to visit this microcosm of Silicon Valley culture “and act as a bridge to factories and divisions in Japan.” Most important, says Wu, Panasonic will get an early peek at home networking software.

Liao points out that appliances such as TVs, PCs and DVD (digital versatile disk) players, now “all have the same basic technology inside.” Namely, microprocessors. The question for Panasonic is what happens when all these devices start talking to one another.

The incubator’s first prospective tenant, InterActual, is developing software that adds an interface to DVD movies that allows a consumer to “play with” the movie on a computer DVD-ROM optical disk drive (a new generation optical disk drive). The idea is that after watching a DVD, you’ll slip it into your PC where you can read the screenplay, play video games, and (thanks to Panasonic’s investment in the startup) find Internet links to Panasonic’s online shopping site. Now that’s convergence-of a very commercial kind.

Tech Obsessive?
Become an Insider to get the story behind the story — and before anyone else.
Subscribe today

Uh oh–you've read all five of your free articles for this month.

Insider Premium

$179.95/yr US PRICE

More from undefined

Want more award-winning journalism? Subscribe and become an Insider.

  • Insider Premium {! insider.prices.premium !}*

    {! insider.display.menuOptionsLabel !}

    Our award winning magazine, unlimited access to our story archive, special discounts to MIT Technology Review Events, and exclusive content.

    See details+

    What's Included

    Bimonthly home delivery and unlimited 24/7 access to MIT Technology Review’s website.

    The Download. Our daily newsletter of what's important in technology and innovation.

    Access to the Magazine archive. Over 24,000 articles going back to 1899 at your fingertips.

    Special Discounts to select partner offerings

    Discount to MIT Technology Review events

    Ad-free web experience

    First Look. Exclusive early access to stories.

    Insider Conversations. Join in and ask questions as our editors talk to innovators from around the world.

  • Insider Plus {! insider.prices.plus !}* Best Value

    {! insider.display.menuOptionsLabel !}

    Everything included in Insider Basic, plus ad-free web experience, select discounts to partner offerings and MIT Technology Review events

    See details+

    What's Included

    Bimonthly home delivery and unlimited 24/7 access to MIT Technology Review’s website.

    The Download. Our daily newsletter of what's important in technology and innovation.

    Access to the Magazine archive. Over 24,000 articles going back to 1899 at your fingertips.

    Special Discounts to select partner offerings

    Discount to MIT Technology Review events

    Ad-free web experience

  • Insider Basic {! insider.prices.basic !}*

    {! insider.display.menuOptionsLabel !}

    Six issues of our award winning magazine and daily delivery of The Download, our newsletter of what’s important in technology and innovation.

    See details+

    What's Included

    Bimonthly home delivery and unlimited 24/7 access to MIT Technology Review’s website.

    The Download. Our daily newsletter of what's important in technology and innovation.

You've read of free articles this month.