Discussed Question 2. What is your opinion of the original vision of Xerox Technology Ventures (XTV)? What would you have done differently?
Xerox’s interest in XTV came with the realization that the Xerox PARC’s technology was leaking out of the company. Industry rumor suggests that the Macintosh, Ethernet, laser printers, and mouse pointers were all invented by Xerox PARC and leaked out to various start-ups. The company executives thought that by providing entrepreneurial opportunities to its employee, it will be able to keep Xerox-born ideas in the family. Xerox created XTV and nominated Adam, a well seasoned Xerox executive to head the new division.
Xerox Technology Venture mission was to manage ventures more aggressively with entrepreneurial approach. XTV’s job was to identify top ideas, secure outside venture funding, and provide guidance as these startup companies grew. Xerox held all of the stock, twenty percent of it was set aside to be used as stock options for employee. 20% of stock options motivated employees to come forward with their ideas to XTV, if their ideas were not pursued by mainstream Xerox business. Xerox gave them shares in the new company in exchange for waiving the legal right to demand a job from Xerox if the new company failed.
The startup ventures were allowed to use Xerox’s resources to develop ideas and slowly acquire funding from outside to further develop these ideas. During the life-cycle of XTV, Adams and his associates selected nine ideas that became companies. Two of the companies have gone public; the most successful is Documentum, Inc., a company that makes enterprise-wide document management software. Documentum was founded in 1990, went public in early 1996, and has attracted considerable attention along the way. In spite of mixed success, XTV in mid-1990s was replaced with another unit, Xerox NewEnterprise, which was supposed to...