Though he helped start Sun Microsystems, Bill Joy has been spent the last five years thinking a lot more about solar energy than about that other Sun.
"It's early days," Joy said of the green-technology industry he now focuses on as a venture capitalist at Kleiner Perkins. "It's like the Internet before the Netscape IPO."
But, he said, there are needs in his new field that are quite different from those encountered by most Internet ventures.
"Most Internet companies don't make anything other than software or a Web site," Joy said. "They don't have factories like you'd see in China or Taiwan. Starting a lot of these companies is a lot more like trying to create a manufacturing base."
In a lengthy interview with CNET, Joy talked about what's needed in green technology, the risks he still believes are posed by nanotechnology, and his thoughts on the tech company he started, as well as on tech giants Microsoft and Google.
As for Sun's downfall, Joy traces it back to the fact that the company's business changed, leaving much of its research in areas where Sun no longer had products.
He also blamed the business side for not doing a better job of selling what the technologists at Sun created.
"I think if you wound the clock back, I'd like to think that we invented stuff in engineering that could have been marketed better," he said.
"I think Sun got caught because we did things that were more the basis for consumer technologies, but we ended up being a commercial computing vendor," he said. "We never really got the consumer part of our business going."
Meanwhile, Joy also sees Microsoft as potentially making some of the same mistakes Sun made.
"Our business had changed," he said. "Our technology got stranded. Microsoft similarly seems to have a lot of stranded technology."
Here is an edited transcript of our conversation:
Q: You've been involved in helping the group that is starting the Techonomy conference. How did you get involved in that?
Joy: I know the principals in this new conference from their days at Fortune and had helped them start the Brainstorm conference by giving them some ideas a couple of years ago. I think there's an opportunity for a new kind of discussion around how the kind of ideas that have driven Silicon Valley get applied to the broader economy. We obviously have a need for green jobs and green innovation. There are a lot more tech entrepreneurs in the Internet and computers than there are in the green space.
How can we take some of those lessons and apply them to the broader economy? I think that's a really important question. I think the technical ideas to start a lot of great businesses are there.
Is there enough capital going toward the things you are talking about?
Joy: There's not enough money in research and development. There's not enough money in project finance. The industries that are affected here are very old industries. A lot of them are extractive industries where you get oil to come out of the ground or the coal and then it is worth something. They weren't very high-tech even if they used some seismic code to find the natural resource. And they consequently spend an almost invisible part of their revenue on R&D. The green energies of future--the wind, the solar--these are much more R&D-intensive and involve manufacture and deploying new things.
We all know the dollars from a lot of the oil will go overseas, and coal is a huge CO2 emitter. We need either better technology to process it, or alternatives. The companies that do that, many of them, or at least the technologies, don't exist. There's room for a lot of new ventures, like there was in the (beginning of the) personal computer industry and the Internet.
Is that what you've been up to?
Joy: That's what I've been doing for five years. It's early days. It's like the Internet before the Netscape IPO. To your point, I don't think private equity isn't that involved. These new things are very different from the Internet. They are manufacturing businesses. Most internet companies don't make anything other than software or a Web site. They don't have factories like you'd see in China or Taiwan. Starting a lot of these companies is a lot more like trying to create a manufacturing base.
The latest generation of renewables is competitive only with subsidies or with standards that require their use. We need to invest to drive them down the cost curve, to get past that to get to the point where they are truly competitive.
And I guess the flip side is that a lot of these industries, like the gas and the coal, a lot of the exploration and research costs are already priced in, so it's really just the extraction cost. Are you in the school of thought that there should be some sort of cost attributed to the environmental cost?
Joy: I would prefer to invest in things that don't need a tax on carbon to be competitive because the taxes are likely to be lower than the real cost, for political reasons, and low enough that they don't make much difference. The money behind traditional industries obviously would prefer these things not to happen.
We've seen the cost of being late to the problem with the financial system. I don't think we can afford to be late to the problem with the climate solutions. The Chinese government has a lot of scientists and engineers involved in the making of these decisions. We have lawyers. The law is as much about protecting what people already have as protecting the future.
I think the engineering approach they are taking is more forward-looking. They are now the leading user of wind, certainly they are the leading manufacturer of solar. These are the industries of the future. We need to both create those industries here and also manufacture the products here.
We need to get more minds engaged. It's great that Bill Gates is now talking about investing in green energy. He knows a lot about entrepreneuring. He's talking publicly about a nuclear venture. That's not my favorite area, but at least it's a start. I'm sure he's looking at other things as well. If it becomes more widely known that he's investing broadly in this, that gives other people courage. We need a boom in this area. Sooner is better. It will happen eventually. There will be a lot of new jobs created. I hope they are here. They only are going to be here if people try to make them; they are not going to appear out of thin air.
I know some years back you wrote about your concerns about nanotechnology. Would you say your concerns around the environment are higher on your mind these days?
Joy: The proper response to concerns I raised would be sensible regulation, which doesn't seem to be on the agenda right now. Let's see if they can do proper regulation and inspection of offshore drilling. There's an example where people didn't have a reasonable plan if something bad happened.
So, it's even more of a concern with something higher-tech that people barely understand?
Joy: Right. That is a major disaster, but it's not contagious. Imagine if one oil well leaked and because of that it infected other ones and they all started leaking. That's more of the problem I am talking about. Hopefully, there we'll get that thing closed off and who knows what the damage will be, but it's not a global problem. I'm certainly not happy about it happening anywhere, but the kinds of things I was writing about can happen everywhere.
The right answer for that is regulation and policy that's sensible, but our political environment doesn't make that very possible. I think, for me, working on the solution side helping to create green technologies that are economically compelling is the important thing.
We want to create green businesses and green technologies that attract capital and attract enthusiasm and attract young students to go into the field and private equity and project finance and all of that. We've had some limited things in the public market. There's First Solar, there's SunPower and A123. There's a few things, but those are hardly household words. They are not Netscape or Google to people. People know about wind or solar. It's still something that happens mainly when there is government subsidy, like we see in Germany or in California. If we could get the cost to break to the point that there is more of a tailwind instead of the government diverting the headwind, [that would be better] because I don't think we can afford to subsidize our way to a clean future.
How much of your time is spent looking at green stuff and the future versus how much do you keep an eye on the computing world?
Joy: I only know what I read in the newspaper. For five years I've been doing the green stuff. It's a full-time job. The more you learn, the more you realize you don't know.
Is there anything going on in technology that has gotten your attention, from what you've been reading?
Joy: I'm enjoying using my iPad. The Web was great because it brought us the ability of a lot of people to innovate, because the PC was exciting, but in the end there were very few companies and there was nothing new. Now with iPhone and the iPad--two amazing new platforms--we're starting to see a whole new range of really innovative things. Some of the earliest, most innovative things are games and music-related, like musical instruments. It's just the tip.
These things have only been out for a relatively small amount of time. We'll see more incredible stuff soon. It's nice to see these things that are simple and well done and are a pleasure to use and not just a headache. Like Alan Kay said, the future is kind of arriving.
The two examples you point to, the iPad and the iPhone, are things that came from a very tight-knit, proprietary, closed design company. Does it make you think that, for certain types of devices, an open model is less effective?
Joy: I don't think the open-source community focused on this stuff in the same way. In some sense, you only hit what you aim at. What was the goal of the Linux community--to replace Windows? One can imagine higher aspirations. I think the thing is that open source has been great for hobbyists to get involved, and hobbyists in the sense of the word as somebody who really loves it. That's not a negative thing at all.
It's just not clear how it organizes a sustained and creative activity. Google is using this approach with Android. It's open source, but the money comes from someplace else. More broadly, how do people make a living and do something really creative? I think they have to organize it as a business. I'm all for sharing, but I recognize the truly great things may not come from that environment.
What is it like for you as an early Sun person to see Sun in Oracle's hands and some of the comments that Larry Ellison has made recently?
Joy: I saw he said something about how we had great technology, and I think we did. I think the business side obviously didn't do as well for the company. The financial results for the last few years made it very difficult for the company to continue as an independent entity.
I think if you wound the clock back, I'd like to think that we invented stuff in engineering that could have been marketed better. I'm happy to be working on something else. I worked on it for a very long time.
If you look at the technology industry, you really have to believe in what you are doing and it needs to be great to make a difference. If we saw some of the coverage of Google TV, the coverage is well, yeah, I've seen eight of these and why is this one any different? Well, the truth is a lot of people pushed a lot of stuff out before it was ready and they didn't really believe in it. How many TV initiatives has Microsoft had? Did they really believe in them, or is this just another product? They have the financial ability to do just about anything. But it doesn't have much chance of success if they don't really believe it. It will just come and go again.
I think that's what's happening now. There are things that come organically like, say, a Twitter. For these large companies with a huge amount of money, they have to believe in what they are doing. I think Google really believes in the Android platform. I guess Microsoft really believed in Xbox. The phone stuff always seemed to me a little bit more half-hearted.
The time to have been bold was when there was, perhaps, less reason to be bold, less apparent reason--right when Windows was cooking. If you remember back when Apple did the Mac, the Apple II was doing really well still. They had the Newton and it didn't work, so they haven't always succeeded, but they have been willing to be ... bold.
My prediction would be that if Microsoft wants to do something great ... they have to take a chance. It can't succeed because of Office and the Windows APIs. It has to succeed on its merits, and they have to believe in it.
I think Sun got caught because we did things that were more the basis for consumer technologies, but we ended up being a commercial computing vendor. We never really got the consumer part of our business going. Is Microsoft a consumer company or not? In the categories that matter to consumers, where's the music player, where's the phone, where's the tablet? It's sort of gradually falling away. That's OK. They don't have to be a consumer products company; Samsung looks a lot more like a consumer products company than Microsoft to me. Maybe that's not a good thing to be. It may be hard to be a consumer products company. Ask the Japanese consumer electronics companies.
It only works if you have great products. The idea of Surface is great. It came out and I thought wow, that would be cool. Let's buy one. It turns out you couldn't buy them. They were only selling to gambling establishments, so what's the point? Photosynth, that's great. I'm sure they have done a lot of really great work on Voice. In some senses, it feels like Sun in that there's all this great technology but it's not getting out. It's not being put in things they are really committed to. Whatever's in the Surface, what's going to happen to that? It's going to be in a museum. IBM built a car at one point. In some senses, maybe there's too many of these things. You have to pick a smaller number and decide to believe in them.
And that was a problem at Sun, too?
Joy: I think the problem at Sun was we started as a desktop computing vendor and ended up as a server vendor. A lot of our R&D was aimed at professional workstations, and what people there would want just ended up stranded because we didn't make those machines anymore.
There was never a Sun handheld. That was the kind of technology that was anticipating the iPhone and the iPod. We had a touch-screen, Wi-Fi handheld device that we showed in 1995. That was a decade early. By the time it was time to do the iPhone, we didn't have any business anywhere near the handheld devices. We had a few software standards we were pushing for cell phones, but we just did not have critical mass. Our business had changed. Our technology got stranded. Microsoft similarly seems to have a lot of stranded technology.