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TR: So the recent experiences don’t inform what you’re doing as venture capitalists? They don’t change what you look for?
Gilbert: If you’re serious as a venture capitalist, you try to look at the serious aspects of companies. Do they have real intellectual-property elements which they have protected that could be of commercial value? And if there is commercial value, what is the nature of that value? The dot-com cycle was a strange one, because people were interpreting the number of clicks on your Web site as income.
Metcalfe: The basic idea of the bubble was, “We’re going to give away what it is we do best and make money some other way, such as monetizing the eyeballs that we’re able to attract.” You see this with Linux, where they say, “We’re going to give away our software, but we’re going to make money some other way.” The trouble was, those other ways never developed, in particular the anticipated advertising never materialized.

TR: Now I assume you [Metcalfe] are working mostly in information technology and you [Gilbert] mostly in biotechnology. What are the areas you think are most exciting these days?
Metcalfe: I don’t think those are two different categories. I think it’s a continuum. This is an argument I have with my partners. The way my partners characterize our investments is that we’re two-thirds info, one-third bio. But I’m a curious person. I love to learn. So I sit in on these biotech presentations. And the bio guys are talking about computers and bits and databases, and, of course, many of the computer guys are talking about applying biology to computing. So I think it’s healthier to consider it a continuum, rather than this is info, this is bio.
Gilbert: It is a bit more confusing than that in biotech. There are several different types of companies. Obviously, one type of company is developing novel products, novel drugs. There’s another whole field of companies developing novel technologies, which can help other companies develop products. Companies like Celera, for instance, which is sequencing the human genome. And then there’s the whole field of bioinformatics, the issue of whether you can apply computers to biology. The amount of information you’re trying to work with can only be dealt with by information technology, and the questions you ask can only be phrased in terms of computer programs and computer analysis.

TR: We’ve had a wave of genomics companies, and the next phase seems to be proteomics, companies trying to identify all the proteins in the human cell and the ways the proteins interact.
Metcalfe: I’m involved in a company that’s the next wave after that. There’s genomics, and there’s proteomics, and there’s the next one after that. It’s called glycomics, and I’m going on the board of a company that does that (see “Glycomics,” p. 33).

TR: Tell us about it.
Metcalfe: Well, the DNA creates the proteins within the cells, and then sugar molecules are added to the proteins. The sugars affect how the proteins behave. The alphabet of sugars is more complicated than the alphabet of proteins, which is more complicated than the alphabet of DNA. Please check me if I’m wrong.
Gilbert: Well, there’s a slight exaggeration here. I don’t want to disparage your company, but up till now the glycosylation patterns, the patterns of sugars attached to the proteins, has been a technology desperately seeking a useful target.
Metcalfe: This came about because Bob Langer of MIT, who has done probably 10 or 15 deals with Polaris, comes in with two PhD guys who have done this glycomics work. So I asked whether it’s possible that cancer cells attach their sugars in a specific way. And they said, “Yes, in fact, we think we might be able to detect cancer way early by looking for these specific patterns of glycosylation,” or attachment of the sugars to the proteins.

TR: Dr. Gilbert, is this also an area you’ve been looking into?
Gilbert: No, although given an opportunity I might invest in that company.

TR: Is this postgenomics?
Gilbert: Well, actually it’s both pre- and postgenomics. Glycosylation has been around for a long time. And yet no one has yet shown that there is a real alphabet of glycosylation that could be deciphered as the genetic code of the DNA has been deciphered that would prove to have practical value in terms of how the proteins behave.

TR: What would you pick as upcoming significant technologies in your fields?
Metcalfe: I am telling people the next big thing, the next big thing on the Internet, is video.

TR: Software to convey video over the Internet?
Metcalfe: Well, the bandwidth. The content, the switching, the bandwidth, everything related to the delivery of video.
Gilbert: Perhaps. But there is still a major question of whether this might develop in a peer-to-peer fashion or as a broadcast medium, with a central source sending content out to large groups of viewers.
Metcalfe: Yes, well, we had the same experience with earlier stages of the Internet. What you saw is that communication led and content followed. E-mail beat out weather and stock quotes. They came later. So the question you’re asking is, will the initial killer apps of video be communication or content oriented? Will they be movies, or will they be videoconferencing or video telephony? And if there’s a recapitulation, then you’re absolutely right, the videophone will drive video rather than video-on-demand movies.

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