MITEF Chicago: Innovation Clusters
(Live blogged with iPhone, expanded some of the abbreviations ,^)
Panel:
Stephen M. Goldman, Director Enterprise Architecture, Chicago Mercantile Exchange
Mike Dennis pinch hitted for Terry Duffy, President, Professional Trading Group
Anthony Kolton, Founder, LIM Inc.
Michael Burns, President, Exchange Connectivity & VP Research, Trading Technologies
Scott Oldach, Moderator
Steve innovation part of the culture of e-trading …
MikeD the advantage futures screen trading is when you eliminate latency, 6 datacenters
MikeB trading Technologies platforms new technology, get info from trades, that’s how they make money
Tony is an ex-options trader in IBM pit; customers molded product, we distributed questionnaires in pits, O’Connor and other firms trading expertise, sold LIM to Morningstar last year
Topic: Local Innovation Systems (innovation clusters), competencies
Steve liqidity. MikeD transparent pricing. Tony knowing how to use technology.
Evolv over time?
Steve launch Globex2 with open API, invited open innovation
Tony shorter time frames began w monthly updates (to data). Then weekly, now 1/1000 sec between data updates
MikeB faster all the time. Going to zero
Evolve together but create space (for innovation)
MikeB patents
Tony listen to customers
Global industry now, high competition, how work together to protect?
Steve we don’t work w competitors, but customers stay one step ahead, share with them to increase innovation
MikeD we’re tech focused,
Custs work w compets how does that work? Carefully
Steve you have to innov faster
MikeB (coopetition) part of business nature of beast
(Sheldon in audience brings trading into discussion but not right discussion, these guys aren’t traders)
Community. Exchange is a community of firms, do you need membership to innov?
Steve yes and no. Need credible knowlg to partic. Tony was in IBM pit in CBOE, you schnooz to create relationshps, a network, you help people and they will help you. Tap resources in Town, you know where to find.
Tony if you’re a trader, that helps posit valu prop (in you’re making solutions for traders as LIM did)
MikeB you need to know customer, changing markets, evolvg you need to explain
Preferred innov partners? Tony ENRON was one of our largest customers, good traders, took product to new level!
MikeB maintain cust relshps, solve problems & find anothr prob to solv (that’s innovation)
Use JVs? MikeB no. Steve CME partnered w Brazil exchange. Tony we do temp deals sometimes.
Anchor innovator required? Steve no, but a couple leaders others try to copy they make lots of money, become leaders when the first guys make money
MikeB you want to get edge make money, horse race, copy, outperform.
University model for new ideas people, steve we nurture them they’re catching up, open outcry was no way to teach, now engineering trading and e-trading are more relevant to university teaching, we want new traders. Tony started in 1988 in Austin with the founder UT (University of Texas) incubator. In Chicago same guy hired by City of Chicago. Fewer guys in Chicago, incubators need improving. Northwestern innov.
Energy (trading) program in Tulane, a distant univ.
MikeB trading innov energy. Tony amazing. Colleges create competitions trading rooms duplicate trading experience, impressive
Govt? Has a role. Grease the skids, offer a place. Tony, provide connections, desks, secretary.
MikeB select right business. Create technology for entities, very competitive, so less collab
Steve Silicon Valley and Boston Route 128 offer tax breaks, which helped within area. Coopetition is the watchword, although no one used it.
Argonne government fund ventures that then spin off. Is there a model?
Steve not sure
Building community, how important is it?
MikeD universities good community, traders don’t know how to program, so they can work together
How to measure success? Tony: If someone buys it. MikeB failures create opportunities in different ways, you learn from them
Steve You need failures to innov
MikeD You need formal measures. Need new technology to create leverage
Steve it takes time, don’t insist in payback too soon. Tony it takes time need commitment. MikeD eurodollars started slow, took time (“years”), now huge. Need new product pipeline.
MikeB ttnet. A lot investmt starting to take off lost $ for yrs.
How to build innov zyst SC Mgmt
Steve look for smes, expect two yrs no progress stealth mode then press them
MikeD coopetitn talk to all valu chain
Tony get pot custs keep in touch get fback wha would it take for u to buy this?
MikeB get custs involved undst nuances of probs n solns
Q&A
Tony don’t hv enough rcs here in chgo PhD zero pract kg, had to go to Austin
Steve univs catchg up startg to grad quants
MikeB finance pays best
Globex took 15 yrs 2 versions to be succ a lot of measurement invented ppl get core champions
MikeB u can hv massv succ at first.
Tony sold my co I’m sick of it bailouts I’m sorry for ppl still in it
Steve n terry no we didn’t think in terms of clusters but we already do that
