Innovation
is not enough.

We have two foundational goals:

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

For the better part of the 20th century, working on the bleeding 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 the microchip, communication satellites, lasers, solar cells, and cellular phones, just to name a few.

Yet despite this incredible track record of invention, the companies that pioneered these breakthroughs never truly capitalized on their monumental achievements. Whether due to “bad luck” or their own shortcomings, these giants were overtaken by nimble upstarts like Intel, Apple, and Microsoft.

Today, it doesn’t even surprise anyone to learn that large technology companies have all but abandoned the effort to invest in speculative research, opting instead to pay top dollar for breakthroughs coming from without.

Take the Silicon Valley monopolies. As Peter Thiel has long argued, these companies pay lip service to science and technology with 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 why can’t we do both?

Indeed, far from delivering the cornucopian future these companies once promised, the cash they’ve been busy hoarding tells us that the path ahead is fraught with even more stagnation and decline unless something radically changes.

In Silicon Valley, the story goes that a never-ending stream of startups can eventually solve the world’s biggest problems.

Yet, while startups may seem capable of anything in theory, founders learn to steer clear of complex problems with lots of moving parts. For instance, it would be unthinkable to take on the challenge of building a new mode of transportation that drastically cuts the commute time in large metro areas like New York or Los Angeles.¹

So while startups may excel at combining existing technologies in new and surprising ways, that alone cannot make up for the growing lack of ambitious projects or breakthrough inventions. 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 the global competition escalates.

Looking ahead, we believe that the best founders will try to escape the runaway competition by bringing together all the classic elements of a lasting technology company: invention, innovation, and scale.

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 few decades.

Therefore, it’s high time we took a fresh look at what it takes to build a modern R&D venture 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.

At the broadest level, 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?

These questions lead us to examine the structures and incentives that shape a company’s ability to bring new breakthroughs to life. Or as the late Steve Jobs put it more simply: ”The best innovation is sometimes the company, the way you organize.”

To build lots of new R&D ventures, we must begin by revisiting the first questions that the founders of such ventures are faced with today:

1. Team: Are there any eccentric scientists or engineers left? How do you find them?
2. Funding: How do you sustain research on unpopular or long-term problems? What does a good 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?

The answers to these questions provide valuable insights into building new and lasting ventures. And there’s never been a more pressing time to come up with unique answers.

As the software and internet revolution enters its fourth decade with record-high profits for Silicon Valley, it’s hard for all but a few insiders to think that something may be off with the state of innovation today.

That’s why we believe that change will have to come from the outside. And by asking 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.

For the 21st century to succeed, we need technology companies to do more. We can no longer make progress with the easy answers of past decades. The only path forward is to take all that is old and tired and make it new. Every venture is refoundable.