Irony, Hypocrisy & the Brilliant Nathan Myhrvold

Before I get to today’s juicy interview, I must share a bit of hypocrisy and irony. Have you ever seen the ACLU recruiting outside of Whole Foods? The irony struck me. ACLU has filed lawsuits against companies that do data-mining for patterns in their customer behavior so they can sell them other products they might not know they want. I asked one of the clipboard recruiters if he found the irony of data-mining for common demographics outside of Whole Foods as delightful as I did. He didn’t understand.

Now, I pleased to share my exclusive Forbes sit-down with Nathan Myhrvold, Ph.D., former Chief Technology Officer of Microsoft and now founder of Intellectual Ventures.

From prehistoric dinosaurs to futuristic nuclear power, what’s the common thread linking the ages?
Me! There’s no real thematic link between dinosaurs and nuclear power or some of the other things I do, apart from my interest in all of them. I’d love to have some grand overarching theory that unifies them all, but unfortunately it’s too wide of a range to bridge that way.

What drives your interests? Is it the obscure, the unappreciated, the undiscovered?
I have a basic interest in science and how science uses our brainpower and reasoning to figure things out. That includes figuring out things that occurred 65 million years ago, where you have only indirect evidence of what happened, and you need to be very clever in applying that evidence to actually determine quite a lot. At the same time, our inventions in areas like nuclear power are trying to figure out new ways to exploit loopholes in nature’s laws for our technological purpose.

I’m always fond of the quote, “The best way to predict the future is to invent it.” What are some of the inventions that you are currently passionately pursuing?
We’ve already alluded to nuclear energy. We’re hoping that we have a strong candidate to replace (at least a part of) the current global energy supply, which really isn’t tenable for very much longer. Additionally, we do quite a bit of work in medical devices. Though not as high tech as the nuclear work, we have the opportunity to save people’s lives, so it’s pretty neat from that perspective. We also have several projects where we’re trying to understand and fight malaria. Those are probably not among our most lucrative ventures, because unfortunately nobody who gets a regular paycheck gets malaria, but it has the opportunity to save a lot of lives and change the world.

When you think about inventions, do you start with a big problem and figure out how to solve it, or do you begin with a set of solutions and then seek problems to go after?
We do both. The latter we call “the answer in search of a question.” For instance, when we uncover a brand new scientific research result that was just published, we’ll look at it and go through a thought process. Is there anything that this knowledge is good for? What has changed? Can we now achieve something that we were unable to accomplish before? We also take the other approach, beginning with the key problems and then trying to identify solutions. For example, malaria is a big problem. How do we stop malaria? We step into more details and try to identify different directions. For instance, how do you control the disease vector (mosquitoes)? How can we kill mosquitoes easily, cheaply, etc.? Or another direction: how do we attack the malaria parasite itself? Can we do something different than what other folks have tried? And because we’re high-tech nerds, we look to see what we can do using the technology means at our disposal to make a material difference.
Those are two ways in which we approach the invention process, but we’re not above looking at all kinds of other methods. You can’t be very doctrinaire about how to approach the impossible problem.

Some say invention is disproportionately luck, whereas others discuss it as a very rational design process. How do you think about it?
We try to marry the two by doing a lot of deliberate analytical work up-front while maintaining the resolve that we’re going to invent something. By doing so, we tend to make the conditions right for serendipity. It’s like the old saying – luck favors the well prepared. Some people are adamant that you can’t set out to invent, because nobody really knows where ideas come from, but we don’t agree with that. We think you can set out to deliberately invent by creating opportunities and bringing the right people to the table that can grasp those opportunities and come up with lots of ideas. Then we’re left with the challenge of sifting through all of those ideas to distinguish the good ones from the bad ones, because they won’t all be good ideas.

Do you have any interesting non-traditional sources of inspiration for how your sort through ideas, such as biological evolution or market economics?
It’s easy to draw metaphors to all of those circumstances, and in just about every one of those you’ll find somebody who has thought it through and made a good point in that direction. However, it’s very hard for me to say whether those things are more than just metaphors, and I think that any one of them can work as long as you have really talented people around the table. That’s an issue we haven’t touched on. You can be as deliberate, top-down, analytical or creative as you want, but if you don’t have people who are good at this process, it’s much more difficult. Conversely, there are some people who spark new ideas constantly. Those people, particularly if you put them in a room together, can be inspired by almost anything! It makes a lot of difference to have people who have a knack for coming up with new ideas, and can see past the obvious to things that are new or unexpected.

Speaking of people, I know you hold famous invention sessions where you pull talented thinkers together to conceive new ideas. Could you describe those sessions?
Typically we like to have at least three inventors, and more often we have between five and ten. If it gets to more than ten inventors it doesn’t work as well, because the amount of time any individual person is speaking gets fairly low. Then we may have again as many people who are support staff: patent attorneys writing things down, people presenting facts, etc. We try to kick the sessions off with a semi-structured presentation of a problem, the solution approaches people have tried before, what failed, and what’s valuable to know. Pretty soon, things just take off! Sometimes the sessions go in exactly the direction we’d like, whereas other times we could be talking about a particular medical device, and then somebody says, “Well what about this for solid-state physics!?” The sessions can randomly go in directions that were quite unanticipated, but that’s OK. One of the things that makes invention on-demand possible is that we’re willing to define whatever answer we ultimately get as the answer we wanted.

If you could resurrect some deceased inventors and bring them to one of your invention sessions, who would be near the top of your list?
This reminds me of an old story about somebody who was interviewing for a job, and the interviewer asked, “If you could pick any person, living or dead, to talk to, who would it be?” And the interviewee responded, “The live one!” So, assuming it’s a pretty animated dead person, Thomas Edison is probably my number one choice, because he was so good at inventing in such a wide range of ways – and it would be kind of fun to see how he would do in a modern context. Now, there are also a number of scientists who would be interesting to have scientific discussions with, but for sheer inventiveness it would be hard to beat Edison.

Another duo that has always impressed me is the Wright brothers. They started in 1889 by writing a letter to the Smithsonian asking for everything they could find on flying machines - because they set out to learn to fly. It’s just remarkable that two bicycle mechanics had the chutzpa to think, “By god, we’re going to make a flying machine!” But they did it, and they did it with a sort of methodical approach that nobody else had done. For a more recent inventor, I’d pick Edward Land, the man behind Polaroid Corporation. He has one of the greatest all-time patent counts, though there are a number of modern folks that have more than Land (including some of our people) – I’m almost up at Land’s level.

How many patents have you filed?
I think I saw the other day it was 443.

Is there one patent, where if it pans out, you will consider it your most profound and important invention?
There is one that, if it works, I will be the most proud of. It’s in the realm of solid-state physics and chemistry with medical applications, something we call a “molecular harp”. It’s a very cool, elegant idea with incredible potential. (It is also very difficult technologically to pull off, so it’s possible that the full-blown version isn’t going to work anytime soon). The molecular harp could enable a kind of medical treatment that’s very close to what you see on Star Trek. I realize that sounds nuts, but bear with me for a second. Today, we put people into a CAT scan or an MRI machine, and we can see pictures inside of them without cutting them open. If you told a doctor in the 19th century that we were going to be able to see completely inside of a person without cutting them open, it would have been unheard of! Now, imagine that you had a way to reach inside and perform a therapy with no moving parts, no cutting inside, and no injection of drugs. The molecular harp could let you therapeutically affect all the way down to the molecular level. That’s what you see in Star Trek – when someone’s sick they put them in a chamber, and they shoot beams and fields at them and all of a sudden everything gets fixed. We have an inclination that this might actually be feasible. So, that’s my single favorite idea, and like many of our inventions, it’s a long shot.

So if I was to compare your business model to baseball, you’re aiming for slugging percentage, not batting average?
Exactly. That’s another concept that’s important in our model. Many inventions are simply small incremental improvements – 5% here, 10% there. That’s great, but that’s not what we’re about. We’re about big, radical, revolutionary ideas. Each individual one of these ideas is very risky. You don’t know if or how well it will work, and you don’t know when it may become commercially feasible. But if even one of these big ideas hits, it’s going to be great, and if we pursue enough ideas – enough times at bat - we’re going to hit a home run! The way the rules of this game work, strikes aren’t counted against you. Apart from the fact that it takes time, energy, and money, we can have as many at bats as we’d like, and if we just get a few big hits, it can change everything.

Most of the world for the past few years, much of which has led us to our current debacle, has been focused on short-termism: short-term asset classes, short-term liquidity, quarterly earnings. You are starting to pioneer a long-term asset class. How do you convince institutional investors to match the duration of an investment to the duration of the life of intellectual property?
That has been a big challenge, and it’s one of the things that so far – knock on wood – we have gotten right. This business requires patient money. I tell all of our investors and our employees that what I’ve got here is a get-rich-slow scheme. And if anybody runs for the door at that point, that’s fine, because I’d rather have everybody be reasonable about it. If you give me a reasonable timeframe, I think I can produce terrific returns, but it’s only because we’re going to bet on a combination of scale and patience. That is a unique pitch. To be completely blunt, it’s a turnoff for many, but when I find people for whom that idea resonates, I say, “Here’s something you can do that others can’t.” People who are looking for quick steady returns are never going to capitalize on this type of advantage. I can’t promise that this is going to be spectacularly successful, but I can make an argument that the combination of scale (which helps reduce the riskiness and variance of the bet) and patience makes this an attractive opportunity to get in on the ground floor of an investment model that could work better than most. There is a set of sophisticated investors that realize those get-rich schemes just don’t work so well anymore. That was true just a couple of years ago when we raised our money, and it’s even truer now. Pursuing investments which give you short-term allusion of returns but long-term liability to a huge crash like we just had is the exact opposite of where we want to go.

You’re speaking of Nassim Taleb’s “black swans” – both on the upside and the down.
Nassim’s phrases are very apropos here. The way I first described our business to Nassim is to explain that inventions are call options on a technology. A lot of people have piled onto the notion of investing in a technology that’s starting to get ready for primetime, as the venture guys do. Or, investing in technology when it’s in the middle of it’s growth phase, which is what the NASDAQ has been about for the last 20 years. We’re about creating technologies in the first place, and that’s a part of the overall food chain that’s remarkably un-crowded. Perhaps that’s because everybody else is sensible and we’re foolish, but I tend to think we have an opportunity to pioneer a unique long-term asset class, and if we do it well we can have a hell of a run exploiting that.

What do you think is the greatest invention that has occurred in your lifetime, and the greatest invention in the history of humanity?
In my lifetime, it’s hard not to look at the transistor, which was probably the single thing that caused most the technology industry to occur. Computers without transistors were pretty niche things. I could also say VLSI (very-large-scale-integration) and Moore’s Law as a further development of that, or the software industry (an invention I helped participate in the development thereof). Those are all pretty damned important, and the Internet is the latest incarnation of this technology era. There is a question of aesthetics here – do I pick the most important invention as being the one that launched it all, or the one that’s had the most recent impact on everyone’s life?
In terms of the most dramatic thing in the history of humanity, it’s agriculture. It’s a funny thing to say, but agriculture is what gave us the ability to feed ourselves with enough free time to develop civilization. And it really happened in that order. Agriculture happened first, and then civilization happened because we actually had time to do music and art and mathematics and science and technology and everything else.

You have two college-age sons. What are you encouraging them to pursue?
My boys are both going to be in science. One is very interested in the outdoors and the earth, so he’s going to do some form of geosciences. The other one had a very hard choice between mathematics, physics, and molecular biology, and it looks like he’s going to choose molecular biology. Of course, modern molecular biology involves biophysics and computing and other sciences to a much higher degree than ever before. Whereas physics is what captivated me when I was his age, it’s hard for physics to be as exciting as molecular biology, and I really can’t blame him!

What are some of your all-time favorite books and movies?
Jared Diamond’s Guns, Germs, and Steel is one of my favorite books. As far as movies go, there are a lot of movies I really like, but it’s hard to beat some of the early Kubrick movies like A Clockwork Orange or Dr. Strangelove.