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Nathan Myhrvold looms as one of today’s great polymaths. Master’s degrees in geophysics and space physics at age 19, doctorate in mathematical and theoretical physics and an apprenticeship under Stephen Hawking, presidency of a software company-and all this before becoming Microsoft’s chief technology officer. He spearheaded the founding of Microsoft Research, one of the world’s most influential computer science labs, and played a leading role in a number of the company’s development projects, including some that contributed to Windows NT and Windows CE. Along the way he found time to train as a gourmet chef and learn to drive race cars. More recently, Myhrvold’s been digging for dinosaurs and mastering photography: his office is adorned with photos from trips to Hawaiian volcanoes, Alaskan tundra and the California desert.

But for Myhrvold, now 42 and with a fortune of several hundred million dollars, it is only a beginning. In January 2000, even before formally leaving Bill Gates’s fold, he cofounded Intellectual Ventures with former Microsoft chief software architect Edward Jung. Not exactly a venture capital firm because it’s funded by the founders, mainly to pursue their own ideas, the company is exploring everything from new forms of computing to biotech and genomics. Myhrvold is also thinking about launching the Invention Factory, an effort to unite leading inventors and change the way inventing is done (see “The Invention Factory,” TR May 2002). TR editor at large Robert Buderi visited Myhrvold in Bellevue, WA, to learn about his vision of a world in the midst of an unprecedented explosion of technological growth.

TR: I’ve seen Intellectual Ventures described as a biotech company, an incubator, a venture capital firm. What are you doing?

NM: The reason I decided to leave Microsoft is, I wanted to do whatever I wanted to do. So our mission here is about as eclectic as I am. One of the areas I’ve been very interested in is biotech, and no matter how broad a scope I can carve out for our research group at Microsoft, biotech was just a little too far out. So I’ve met lots of people, I’ve gotten smart on a bunch of areas, I’ve invested in some companies, I’ve talked about forming other companies, and that’s the stage I’m in.

I’ve [also] gotten very interested in the economics of technological revolutions, and how is it that we’ve had such enormous growth in technology over the past 30 years or so. I’ve spent a lot of time comparing the differences between the technological revolutions of the current century and latter part of the 20th century to the revolutions in, say, the 19th century. What I’ve found is it wasn’t just the technology that caused enormous economic change, because in the 19th century, between Edison and a whole host of other inventions and tremendous industrial growth, there were huge, huge changes. I believe there is something more fundamentally different. And it’s fundamentally different because of the emergence of exponentially growing technologies, where the next step is as big as all the previous steps put together, and you are dealing with changes that happen by factors of millions or billions. In the tech industry, we talk about Moore’s Law and the drastic changes in the price/performance ratio of processing power every 18 months or so. However, I’ve found that exponential growth can happen in other industries when certain criteria are in place. So I’ve been trying to put some order to this notion, since no aspect of classical economics really captures this idea.

TR: Can you explain this further? I would have thought that if you’re looking at electric power or telephony it would have exhibited exponential growth for a time.

NM: If you look at the number of homes connected to electricity, or the number of homes connected to a telephone, yes, you could say that the growth was exponential. [But] if you look at it from the perspective of the price/performance ratio, the cost of electrical power per kilowatt-hour or the cost of a minute of phone service, those costs really didn’t decline very much.

The cost of shipping was dramatically affected by the railroad, but we’ve hunted up all the records on what was the cost of shipping a ton of grain, all throughout the 19th century. It improved by about a factor of ten. The price of steel improved by maybe a factor of three. All of those things went through a price/performance ratio change. But typically less than a factor of 10. Whereas from the first transistor to today, the improvement was something like a factor of a billion.

There are dozens of areas undergoing a similar kind of exponential growth. The technological revolution for the 21st century is going to be based on which areas those kinds of exponential growth rates catch hold in, and which ones don’t. That is the key issue for the 21st century in technology.

TR: Besides semiconductors, what other technology areas have you identified as undergoing exponential growth?

NM: If you look at hard disks, the number of bits you get for a buck on a hard disk grows at about 125 percent per year. Mass-market software has an exponential price/performance curve. If you bought Microsoft Windows or Adobe PageMaker or-pick any other application you could possibly imagine-and you look at it over a period of time, you’re paying almost the same amount or even less in real dollars for an increasing amount of technology-an exponentially increasing amount.

The tools of molecular biology are on that kind of a path. Genomics is going through an exponential revolution. So regardless of whether you’re a doctor trying to save somebody’s life, or you’re trying to make new cosmetics, genomics and proteomics and the tools associated with them become indispensable. The Human Genome Project was a gigantic project, eight years, $12 billion, to sequence the entire human genome. And I claim it’ll be down to the $10 range to sequence individual genomes.

TR: To sequence your own genome?

NM: Not just your own genome, but every economically important plant and animal needs to be sequenced. Everything that eats us, all these disease organisms and parasites need to be sequenced so that we can develop cures and better protect ourselves. We’re on the cusp of so many interesting advances in so many parts of science and industry, but based largely on the fact that you have these incredible technologies that continue to be cheaper and cheaper and cheaper and cheaper.

TR: What areas will Intellectual Ventures-or the Invention Factory-be targeting?

NM: I’m very open minded as to what topics we’re going to look at. I have a background in computing. And I was once a physicist. So those areas are near and dear to my heart. Biology is interesting because you have a variety of breakthroughs, conceptual and instrumentation breakthroughs, that have made biology a symbolic, information-rich science.

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