How a MacGyver of the Semiconductor Industry Plans to Rescue Nanosys
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$40 million venture round for Nanosys in 2005. “Jason is quickly commercializing Nanosys’ deep nanotech expertise and attracting great partners in big markets, some of whom will be disclosed soon. I can say he has zeroed in on some really critical high-growth markets including batteries and lighting with urgent pain points that Nanosys is uniquely or exclusively positioned to solve.”
But finding the right pain points to treat has been a long process for Nanosys. The company was set up in 2001 by Larry Bock, a serial biotech entrepreneur (now a special limited partner at Lux Capital, and a San Diego Xconomist), along with founding CEO Calvin Chow and founding business development director Stephen Empedocles. As scientific cofounders, Bock signed up stars of the academic chemistry world, like UC Berkeley’s Paul Alivisatos, Harvard’s Charles Lieber, and MIT’s Moungi Bawendi. The company secured the rights to fundamental patents in areas like nanowires, Lieber’s specialty.
“Larry Bock had a great concept, which was to go out and see what kind of nanotechnology he could gather up from leading research institutions and bring into the company,” says Hartlove today. “He hypothesized that this technology would be very useful, but no one knew what for, at that point in time. It was like real estate. If you see a beautiful piece of land near the ocean, you can hypothesize that people are eventually going to want that, that roads will get built, and all these other things will happen.”
But the road-building in the nanotech field was a lot slower than anyone expected. Government research funds and venture investments, including a $1.7 million Series A round in 2001 and a $38 million Series B round in 2003, allowed the company to pursue what Hartlove calls “directed research” on a wide variety of applications. These included silicon nanowires for more efficient thin-film transistors for liquid crystal displays (LCDs) and semiconductor “nanorods” that, the company’s researchers hoped, would convert sunlight into electricity more efficiently than traditional silicon photovoltaic panels. But despite partnerships with companies like Sharp, Matsushita, Intel, and Micron Technology, the startup wasn’t able to produce materials that had a significant cost or efficiency advantage over existing products.
When the board brought in Hartlove in 2008, “They asked me to have a look at what the company had been doing, where we were at the moment, and give a recommendation on, really, what there was here to do anything with,” the CEO says. “Several different options existed. We could easily have closed the company and tried to find a way to sell the IP rights off to various people and give the cash, which we still had a substantial amount of at the time, back to the investors. We could have scaled the company way down or split it up into a lot of different pieces. What I recommended was that there were several technology areas that we had within the company that were very close to being production-ready.”
Based on his knowledge of the semiconductor and device industries, Hartlove felt that there were two areas in particular where Nanosys had done advanced lab work that could be commercialized quickly. One was quantum dot phosphors, which became the basis of the QuantumRail. The other was silicon nanostructures for battery anodes, which have the potential to double the capacity of lithium-ion batteries within the next few years.
“Having a whole lot of patents and IP is useless if nobody at the company is using the technology,” Hartlove says. “You have to get the technology into the market, and I first and foremost tried to focus on areas where I felt we could do that.” That’s where some of Hartlove’s Silicon Valley experiences, and his improvisational skill, came in handy.
The story of the optical mouse is illustrative. If you have a computer mouse with an optical tracking device on the underside—as virtually all mice do these days—you’re using technology Hartlove helped to pioneer at HP back in 1997. Before that time, … Next Page »