April 19, 2004
'The Secret Sauce'
The debate over funding for renewable energy research (see below) hinges in some ways on a simple question: Can we count on private companies to invest adequately in new inventions?
Across industries, the answer to this question seems to be “no.” Although the potential rewards are great, so are the costs, as well as the chances of coming up with a big fat zilch. Companies, like people, are risk-averse; losing a million on a dud of a research project feels a lot worse than making a million on a winner. And what if you invent something that has nothing to do with your business? Most companies don’t even bother.
So, I was interested to see that Nathan Myhrvold, erstwhile founder of Microsoft Research, is starting a private company devoted entirely to invention. Evan Schwartz writes in Technology Review:
The new venture, Myhrvold says, has no mission other than to invent what the inventors believe should be—or can be—invented. “Invention is the secret sauce,” Myhrvold says. “It has the highest concentration of value compared with any task in a company. But because it’s so risky, it also has the lowest amount of focused effort.” Showing what can happen when that effort is intensified is Myhrvold’s main reason for creating the laboratory, which he is funding in part from his own Microsoft-made fortune.
What a coincidence. I’m funding Snarkmarket in part from my Microsoft-made fortune.