Ideas “on the shelf” are no longer being actively pursued by the R&D organization, nor are they actually being used by the business unit. These ideas usually do not flow outside because 1) companies think that if they cannot find a profitable use for their technology, no one else will either and 2) buyers may worry that the sellers of unutilized technologies will only offer the “bad” ones (adverse selection). While selling companies have significant prior information on a technology project, that information will be interpreted within the context of the company’s business model.  So, the buyer may see an opportunity that is not visible to the seller, due to a different business model.

I identified 35 projects that left Xerox after funding for the work had ended within Xerox.  Xerox judged that there was little or no additional value to be gained from continuing this work.  In 30 of the 35 projects, Xerox even gave a license for the technology to the departing spin-off, so most of these separations were consciously managed departures, not inadvertent oversights. In 24 of the 35 projects, there was little business success after separation.  But for 11 of the projects, each of which developed under a very different business model from that of Xerox, there turned out to be substantial value.  The collective market value of the companies that emerged from these 11 projects turned out to exceed the total market value of Xerox by a factor of two.


For more information, see Ch. 2 Open Business Models by Henry Chesbrough