Why we’re here

Innovation
is not enough.

To accelerate science and technology, and build enduring companies, we must reinvent the research lab.

Introduction

An experiment gone wrong.

We have two foundational goals:

  1. Accelerate science and technology.
  2. Help build relentless technology companies.

For the better part of the 20th century, working on the cutting-edge of science and technology at places like Bell Labs, HP Labs, or Xerox Parc was a great way to meet these goals.

The long list of breakthroughs made in those labs produced some of the defining technologies of the modern age, including the computer transistor and microchip, communication satellites, lasers, solar cells, and cellular phones, just to name a few.

Invention of the first transistor at Bell Labs, 1948
William Shockley (seated), John Bardeen (center) and Walter Brattain (right) invented the first transistor at Bell Labs, 1948 Picture by Bell Labs, Alcatel-Lucent

Yet despite this incredible track record of invention, the companies that pioneered these breakthroughs never truly capitalized on their monumental achievements.

Whether through “bad luck” or their own shortcomings, these giants were easily overrun by new and nimble upstarts like Intel, Apple, and Microsoft, who were able to take the fundamental breakthroughs and innovate on top of them at a breakneck pace.

Today, it doesn’t even surprise anyone to learn that large technology companies have all but abandoned the effort to research advanced new technologies, preferring to pay top dollar instead for innovations coming from without.

Take Silicon Valley monopolies. As Peter Thiel has long argued, these companies pay lip service to science and technology with small side projects while sitting on tens of billions of dollars in cash. Instead of Bell Labs, we get weather balloons beaming wifi to Africa. Admirable, but the real question is why can’t we do both?1

Indeed, far from delivering the cornucopia these companies once promised, the cash hoard they’ve been too busy piling up leads us to suspect that the path ahead is fraught with worse stagnation.

  1. Despite record profits, it would be inconceivable for almost any publicly listed technology company today to announce that it was actively pursuing research on highly speculative technologies that wouldn't be ready for commercial use for at least a decade, and we see no signs to suggest that this trend will change anytime soon. Accordingly, we believe that this state of affairs casts serious doubts on the long-term vigor of science and technology innovation. ↩︎


Startup

Large numbers. Small problems.

The story goes in Silicon Valley that a never-ending stream of startups, each scaling rapidly from a small beginning, can eventually take care of the world’s biggest problems.

Yet, while startups may seem capable of anything in theory, things are very different in practice, where all but the most cavalier founders know to stay clear of complex problems with many moving parts.

For instance, it would be unthinkable for most startup founders to try building an entirely new transportation system from scratch to cut the commute time to New York or Los Angeles in half and thus double the productive capacity of our great cities overnight.

No, a ride hailing app is much easier to roll out, so long as you can take over the world before the competition. And the fact that ventures like SpaceX or Tesla are so exceptional is only seen as further evidence in favor of this stoic complacency.2

Although startups can excel at combining existing technologies in new and surprising ways, that alone cannot make up for the growing lack of ambitiously large projects or of breakthrough invention and discovery. A health tracking app is no substitute for a cancer cure.

Such a lopsided innovation model may have paid off handsomely when Silicon Valley was unique, but now that software innovation is diffused across the globe, the model is beginning to show signs of diminishing returns as competition with China, Europe, Russia, and India escalates.

Looking ahead, we believe that the best founders will try to escape the runaway competition by rediscovering how to bring together invention, innovation, and execution under one roof.

SpaceX Falcon 9 re-entry landing, 2015
SpaceX Falcon 9 CRS-6 completing the first controlled rocket re-entry and landing on water, April 14, 2015. Picture by SpaceX

That will often mean looking for new opportunities outside the narrow scope of software and the web, the two areas that have been scoured by countless startups over the past three decades.

Therefore, it’s high time we took a fresh look at what it takes to build new research-driven technology companies in the 21st century, and re‑examined the unquestioned monopoly of the research university.

We can no longer rely on the legend of dorm room disruption and wait for a torrent of startups to save us.

Stanford-cum-Y-Combinator is not enough.

  1. Software startups may be easier than ever to start, but the best founders never allow what is merely easy to distract them from pursuing what is hard but possible, or in other words, the challenges that no one else in the world will solve. ↩︎


Questions

The frontier. Revisited.

There are three important questions we cannot delay asking for much longer as we face down intense competition in the decades ahead:

  1. Is U.S. science and technology research stalled out?
  2. How should we rethink our approach to research to avoid repeating the mistakes that led to its decades-long decline?
  3. If research alone isn’t enough, how do we build relentless companies that never stop reinventing themselves?

Given the well established relationship between progress and R&D, these questions hint at the need for a new branch of study to examine the macro and micro forces shaping the ability of a company to build and sustain new breakthroughs over its long life.

The late Steve Jobs put it more simply: “I’ve discovered that the best innovation is sometimes the company, the way you organize.”


Synthesis

Perspective is everything.

Most attempts to examine those questions have been either too broad or too academic to carry any practical use for new founders. Therefore, we begin by revisiting the first questions facing anyone looking to start a research-driven venture today:

  1. Team: Are there any eccentric scientists left? How do you find them?
  2. Funding: How do you sustain research on unpopular or long-term problems? What does a reverse Gresham’s law funding regime look like?
  3. Frontier: Where is the near frontier today? How can a talented young team get there quickly to work on new and meaningful problems?
  4. Complexity: Are we doomed to ever-narrower specialization? How do you reduce complexity in advanced research fields and drastically cut down on the time it takes to start making headway?
  5. Coordination: In a risk-averse culture governed by the precautionary principle, is there any dangerous research left? How do you even get this research out of the lab and into the world?
  6. Scale: Are startups the only way left in our society to do something new? Can larger companies still run effective research projects? Can the U.S. still organize large-scale research or engineering efforts?
  7. Secrets: Is the U.S. falling behind because whole research fields are becoming forbidden? How do we reopen the frontiers now closed?

We believe that these questions have long suffered from neglect. Yet there’s never been a more pressing time when formulating clear and unique answers to these questions is more valuable than today.


Mission

Reinventing the future.

As the software and internet revolution enters its fourth decade with record-high profits for Silicon Valley, a few insiders may suspect that something is off with the state of innovation today, but when profits are this high, it’s easy for those misgivings to get nowhere very fast.

That’s why we believe that change will have to come from the outside. And by starting an open discussion on the questions that Silicon Valley insiders are not allowed to ask, we hope to accelerate the pace of that change towards a more intensive mode of progress and to ultimately transform how new technology companies are built.

For the 21st century to succeed, we need new technology companies, and we need them to do more. We can no longer make progress with the easy answers of the past. The path forward calls for founders who are not satisfied to shuffle virtual deeds in a grim game of monopoly, but who are ready to take everything that is old and tired and make it new.

Every great venture is refoundable.