Can Companies Predict the Future?
We Fixed It, You're Welcome
In this episode of 'We Fixed It, You're Welcome,' host Aaron Wolpoff and guest Allen Nejah, founder and CEO of Sunman Engineering, explore the challenges and strategies behind
Key takeaways
- Only 12% of advanced manufacturing companies successfully scale their innovations.
- 95% of filed patents never generate revenue, underscoring the high failure rate of R&D efforts.
Main topics
- Corporate innovation strategy
- The gap between visionary ideas and market readiness
Notable quotes
"You've got to have a very strong personality. A strong personality is very important to run a company." – Allen Nejah
Conclusion
The episode concludes that while predicting the future is inherently uncertain, companies can increase their chances of
Transcript preview
Speaker 2 (0:01) Welcome to We Fixed It. You're welcome. The show where we take over companies, you come along for the ride, and we try to put them back better than Speaker 1 (0:10) we found them. Speaker 2 (0:12) Hey everyone, this is Aaron. I am super excited for today's episode. Let's start with a quick story. A long time ago, I was brought in to work on an automotive dashboard where, get this, you could access the internet in your car from a touchscreen infotainment system. Today, we all have those. Back then, it was a proof of concept, but the car company liked what they saw. They invested heavily in it, and ultimately, it worked out pretty well. That's what we're talking about today. Companies that aren't limited by what's possible. They're working toward future outcomes that may take years, if not decades, to prove out. Of course, there are winners and losers. Some companies spend millions, if not billions, chasing something that never had a chance. So how do companies predict the future? What's the secret to staying grounded in reality while also taking big swings that pay off eventually? Because the wrong move could be catastrophic. That's what we're here to fix. And you know we're going to need some help. Joining Melissa and me today is Alan Nija. Alan is the founder and CEO of Sunman Engineering, where he's been for over 35 years. He's done a ton of product development and prototyping across automotive, aerospace, robotics, telecom, and more. He's also a serial entrepreneur and a professor at San Jose State University. And I think he might understand the future better than any of us. Alan, welcome to our show and tell us a little bit more about you. Hi, Aaron. Speaker 3 (1:33) Hi, Speaker 2 (1:34) Melissa. Thank you Speaker 3 (1:35) for having me on your show. I appreciate that. Yes, my name is Alain Neja. My background is aerospace mechanical engineering. We have worked with small companies, many startups. We have worked with mid-sized companies. We have worked with a lot of larger companies like IBM, Sony, Samsung, Apple. We've been doing over, to date, I think we have 1,670 some projects. Wow. Wow. It's a lot of work. It's a lot of work. That's a lot Speaker 2 (2:06) of Speaker 3 (2:06) work. That's Speaker 2 (2:06) a Speaker 3 (2:06) lot. I've been here today last 35 years, trust me. And even when I'm on vacation, I'm still working. Speaker 2 (2:12) Well, thanks, Alan. We're really happy to have you here. You're going to be instrumental to our conversation. Melissa, companies are profit-driven. They want sales this quarter, not eventually. So why invest so heavily in the future? Speaker 1 (2:26) So here's the thing about the future. The future, everybody wants to bet on it, but almost nobody wants to actually pay for it. for it. So there's a stat that really stopped me cold while I was prepping for this. A 2024 study from Ernst & Young looked at advanced manufacturing companies, the ones building genuinely new stuff, and found that only 12 % of them successfully commercialized their innovations at scale. 12%. And here's the kicker. 95 % of the patents these companies filed never generate a single dollar. of revenue ever. So picture you're in a boardroom, you're at a company and someone pitches a technology that might be viable in five years or 10 or 20. The math is not exactly in your favor. As we like to say, the math is not mapping. And yet some of the biggest companies on the planet keep doing it anyway. Amazon spent almost $80 billion on capital expenditures last year, most of it on AI infrastructure that isn't paying for itself yet. But NVIDIA keeps plowing money back into R &D while it's already winning. So there's research out this year published in Management Science showing something kind of wild. The more pressure a public company feels from quarterly earning calls, the less ambitious its innovation gets. Less bold, less wild, less future forward. So which is such an interesting tension, right? Because companies willing to look a little Out there for a few years, the Amazons, the Navidias, the early Teslas, those are often the ones that end up owning the future. But for every one of those, there's a graveyard of companies that, bet big, waited and it never came to fruition. So here's the question I think every leader quietly wrestles with. How do you know if you're building the next iPhone or the next Segway? Is there actually a way to predict where the puck is going? Or is it just conviction, timing, luck, and being willing to be wrong in public a few times before you're actually right? And honestly, I can't think of a better person to help us answer that than someone like Alan, who spent his entire career building these types of things before the world was ready for him. So let's get into it. Speaker 2 (4:45) Yeah, Alan, I'd say you've looked into the future several times. And you've probably seen your share of, I'd say, a bunch of winners. But there's got to be some cautionary tales in there, too. Can you tell us just a story, one of your favorite things that you've been involved with? Speaker 3 (5:01) I have this device here. So we built this back in 2005. And I mean, today, they say, OK, it's a tablet. There were no tablets. There were no iPhones. There were no nothing. You know, for big companies, you know, that's part of their... Speaker 2 (5:23) It's true. Yeah, I said at the beginning, some companies have the wrong idea and they chase the wrong idea, but some companies have the right idea. And maybe their years or decades too early and it's just not feasible. So their instincts are all right, but someone else will come along later and pick up the pieces and then own that market. As Speaker 1 (5:41) a large company, you have a responsibility to your shareholders and to your customers. And so growth at 10 % is a lot. To your point, Ellen, that's a lot. And so to be able to take monies and actual monies and time and resources and invest those in innovation, just sometimes. doesn't seem like the right rhythm to go for. Like that doesn't seem like the right, you know, Erin, you know this more than I do, but the right go to market strategy to actually get something, you know, get growth in revenue. So I do think that like, as you get larger and more successful as a company, even though you might have more means, you also have more pressures on you. So then that makes it seem like, okay, gosh, how can we actually do this? And I know that I I've been at some larger companies that have had what we would call innovation labs, where they would actually set aside a group of people, engineers, product people, UX people, customer experience folks, to just work on those types of things. And they would be given kind of, you know, a room by themselves. They get to do whatever they would like to do. be able to kind of present that. And to me, that's really great way to kind of also make sure that your company is always looking to the future because things are always changing. You don't want to discourage moonshot ideas. You don't want to discourage people from really trying something kind of outlandish, right? And if you use KPIs that are for a more structured and conservative company environment, you're kind of limiting, you're self-limiting yourself, you know, you're self-limiting the team. Speaker 3 (7:33) You're right on. That's exactly what we had to do. You know, you always think about the coolest stuff, what you can do, what's the next and so on, right? But from business point of view, that's totally opposite way. You've got to see what's... What's out there, what's needed, how to get there and all that, right? Speaker 2 (7:51) Just to push back. But if you have, let's say you come from a company with a culture of innovation and that's internal and inherent to what your company does, then you're creating the right conditions for those moonshots or someone coming up with that bold idea. But what if your company is just a company, you know, and you have your profit driven, you've got shareholders, you've got investors, everyone's kind of skittish. I'm not saying do no harm, but. consumers were trained on appreciation for incremental innovation. So version three comes out, then version four comes out and we buy version four and, you know, we're all, we're all reasonably happy. You know, we know that the deal and how it works. Why would a company like that listen to someone that says, Hey boss, you know, I've, I thought of this thing that is going to take years to pay off and it may cost the company a lot and it may fail. What's the motivation for that company to disrupt what's practically working? I Speaker 1 (8:49) don't think there is necessarily a huge motivation, Aaron. I think that like that would be to me, it would be maybe a conflict and, you know, purpose for whoever is introducing those types of innovations versus the company that they're at. And I've been at companies that are. hundred-year-old Fortune 50 companies that that's not their cup of tea. They've said that. And I think as long as you're self-aware enough to just say it and be it, I think that's okay. And to me, I think it's really important that companies who want to be in that innovative space have that bandwidth and have the wherewithal and knowledge of how to organizationally and build that culture around that and really read those operational signals, really understand what future consumers might be looking for. But we still need the basic foundations of, you know, a lot of thousands of companies that are out there and businesses that are out there. I think that what I've also seen, which has worked is there's a company I used to work for that actually built out their innovation in a separate company. Speaker 2 (10:09) If you've ever worked for any company anywhere, you know there's the process that's supposed to happen and then there's what everyone actually does. The problem is most leaders can't see that gap, which makes it pretty hard to know what's actually worth fixing. That's why I like Scribe Optimize, which automatically discovers workflows across your approved business applications. No interviews, no workshops, just how work actually happens. Its live dashboard gives you a clear view of how work gets done across all your teams. So you can see which tools are being used, where time is being spent, and where the biggest inefficiencies are hiding. And it doesn't just point those out. It explains why they're happening and recommends ways to fix them with estimated time savings built in. That's way more useful than just knowing where the problems are. What I also like is that this is about leadership visibility, not employee monitoring. In fact, user-level data is anonymized by default and sensitive information is automatically redacted. And none