Newsmaker: Building a new-idea factory

(continued from previous page)

recognize what that was. If you go to a cocktail party now and someone says that they're an inventor, it's very strange. Most people's idea of an inventor is that crazy guy from the "Back to the Future" movies.

So how did you come up with Intellectual Ventures?
Myhrvold: What we set out to do is to say, "Let's honor invention and inventions. Let's take a company whose only focus is investing in invention." We're not going to make products. When I say we won't make products, it's not because products are bad--products are wonderful--but the world already has a very well-developed infrastructure for dealing with products and product-oriented ideas and product-oriented companies.

If you have a new idea about a product, you put together a team, go to Sand Hill Road, get some funding from VCs, and you start your company. So I said, "OK, let's go where they are not. If we get great ideas, we'll find somebody else who can incorporate them. We'll license it off, or we'll do some kind of venture, or we'll start a company." The exact form depends a lot on the ideas and circumstances.

We try to recruit inventors before they've had their idea and say, "Look. You're a person who's had a track record of lots of interesting invention. We'll support you before the idea, and you'll get together with us, and we'll try to brainstorm and create some new ideas."

Who are you working with?
Myhrvold: We've got some full-time inventors, but most of our senior inventors are not full time. Mostly, they have a job. They could be a professor, they could be a consultant, they could be retired. Typically, if they work for an existing company, they will sell their (brainpower) to that company and so they can't come and invent with us on the side.

Can you give us some names?
Myhrvold: Edward Jung and I, who were both at Microsoft, work here. And we have a bunch of other folks, Leroy Hood, who invented the DNA sequencer and tons of other things in biotech. He's had his own research institute called the Institute for Systems Biology. But he invents with us.

But a guy like Hood could go to Sand Hill Road and get funded.
Myhrvold: Yes. In fact, many of our inventors have had successful product companies in the past. But ironically, the guys who have had that success are the most likely to sign up, because they know what a pain in the ass it is. It's like five years of your life.

If you're a very inventive person, what I typically say is, "Look, if you work with us, you'll get some equity in your invention, and then we'll go to license it to people later. Net-net, you'll probably get less than if you were founder of the next Cisco, but it won't take five years of your life either. So probably you'll get a lot less for each one, but you'll have so many more ideas and you'll have your whole life." It's a different kind of a trade-off.

What sort of areas are you looking into that have been stymied by a lack of invention or really are ripe for more invention?
Myhrvold: We're quite wide-ranging. Mostly, we're in communications, IT and biotech. In biotech we don't do anything involving new molecules. Mostly what we do in biotech is either tools or biomedical instruments, stuff that involves a mixture of disciplines between computing and biotech or medicine.

Almost like the IT side of the biotech.
Myhrvold: Exactly. And then there's core IT things. We've had quite a bit of effort in electronics and solid-state physics. Nanoelectronics, photonic band gap materials--stuff like that. We tended to try to work in areas where we feel the world isn't doing a great job, and that falls into a couple of categories. One is in areas that interface between two disciplines. There are great biotech people, and there are great computer science people. The world is much (worse) at getting them together in the same place than you'd think.

Another thing we tried to do is we tried to work five years out, because almost all of the world's engineering work is for between zero and three years out. Almost no people in companies are paid to deliberately work more than three years out. I said deliberately just because the product can slip. It can take longer than you think to get it there.

Will Intellectual Ventures operate kind of like the IP firms we know today, like Rambus? Or is it somehow different?
Myhrvold: We don't know. Sometimes you get some intellectual property that is really interesting but it's really different from what the

More Newsmakers