May 2002

The Invention Factory

Nathan Myhrvold created Microsoft's research group and left with a vast fortune. Now he's created his own organization to keep innovation humming.

By Evan I. Schwartz

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Over lunch in his suburban Seattle office, Nathan Myhrvold says he's looking forward to an afternoon meeting with a group of nuclear-fusion experts. "It's a real bitch," he remarks of the problem scientists have had controlling hydrogen reactions and achieving the ultimate dream of cheap, safe, renewable energy. Such thorny technological conundrums fascinate the bearded, cherubic veteran of Microsoft's inner sanctum. Like dozens of other domains, he says, fusion is ripe for a revolution. "There needs to be a big new idea," Myhrvold muses.

Big ideas are what Myhrvold is all about. Currently the president of a freewheeling outfit called Intellectual Ventures-an umbrella company he formed two years ago to pursue his diverse interests-Myhrvold is fascinated by the very process of thinking up groundbreaking concepts. "I'm interested in how amazing new ideas are generated, and what it takes to bootstrap those ideas and grow them afterwards," he says. To that end, Myhrvold recently disclosed to Technology Review, Intellectual Ventures has been working on a secret project for the better part of two years. The ambitious undertaking, which he is tentatively calling the Invention Factory, would bring together perhaps dozens of established and promising inventors to craft both significant innovations and methods to broaden their impact on the market. In fact, Myhrvold says he has been meeting with every significant inventor he can find to attempt to rope people into his still-evolving plan. "I've tried to speak to all of the world's great inventors-but only the living ones," he smirks. "I'm particularly interested in the ones who have made big scores."

Myhrvold's vast personal wealth, estimated in the hundreds of millions of dollars, along with his track record as the founder of Microsoft Research-"the man Bill Gates put in charge of the future," as the New Yorker put it in 1997-means that any big idea he puts into action is bound to create a stir in the technology world, especially now that he's not constrained by a specific corporate agenda. Unlike a traditional corporate research lab, Myhrvold's new outfit wouldn't be tied to any particular product or market but would be free to investigate any industry or field in need of new inventions. "We want to create new stuff, either evolutionary or revolutionary stuff," he says.

Either working in Myhrvold's offices in Bellevue, WA, or remaining in their own laboratories, members of this inventors' collective would collaborate on patentable ideas in areas ranging from biotechnology to distributed computing, energy, military innovations and even business processes. The venture would be a for-profit business, with revenue coming from the licensing of patents that its inventors produced, and its business model would be built around an unusual way of compensating those who create valuable intellectual capital: individual inventors would split license fees and royalties with the company. Thus inventors would profit in direct proportion to the success of their inventions-although many would also be paid a salary.

Why challenge a system of large-scale corporate research that has worked fairly well for decades? Corporate labs "often produce inventions, but that's not their job," says Edward Jung, Myhrvold's partner at Intellectual Ventures and Microsoft's former chief software architect (a position now held by none other than Bill Gates). "Even though it creates a huge amount of value, invention is usually just a by-product of industrial research. In many ways, it's been given short shrift. Our whole notion is that invention is important enough to say, Let's invent, and create the context for inventing, and get inventive people to do it." Invention Factory members, Jung says, will jump across problem domains in order to spur serendipitous discovery, whereas researchers at labs run by companies such as Microsoft, IBM or Lucent Technologies tend to work in well-defined areas, often spending their entire careers in one narrow field.

To attract some of the world's top inventors to participate, Myhrvold and Jung not only want to compensate them well but also aim to tap into the sheer joy that inventive people draw from their work-an emotion that they believe has largely been missing in corporate labs for a long time. As Myhrvold puts it, "Invention is so exhilarating that most true inventors would do it for free."

The Invention Factory

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