Wednesday, March 24, 2004

Nanomatic for the people

Lisa Napoli, senior reporter for public radio's "Marketplace" did an admirable job of injecting a wide range of ideas about nanotechnology in such a short amount of time in Tuesday's report. (Here's a RealOne Player link.) I told her so, and she responded, "That one was a bear!"

During our 30-plus-minute interview last Friday, Napoli was almost apologetic about how radio is such a superficial medium and she's sorry that her report could not go more in-depth. Personally, though, I think it takes a lot more skill to condense complex ideas into a three-minute radio story than it does to write a 3,000-word essay on the same topic – if the story is aimed at a wide audience.

Those of us who are deeply and daily buried in the minutia of nanobusiness, nanoscience and nanopolitics might pooh-pooh those kinds of radio reports, yet I'll bet more average citizens (and eventual consumers of nanotech products) learned more about nanotechnology through those sound bites than they could have in any of the thousands of white papers and reports floating about.

One particular part of the report that I'm proud of is Napoli's focus on Bruce Baughman (aka, "Mr. Bionic Crotch") and his nanotech-enhanced mesh device for hernia surgery. Small Times reporter Jeff Karoub, the man who also found a Sept. 11, 2001 World Trade Center techno-hero in the C-Leg, again did something that is lacking in lab- and business-heavy nanotech reporting – he found a real person whose life is measurably better because of nanotech's ability to improve on a medical device. My wife mentioned that Jeff's story was one of the few she's read in Small Times that seemed to resonate into everyday reality. And "Marketplace's" Napoli correctly picked up on that connection and ran with it.

If you sneezed, you would have missed my sound bites, but basically I provided the "industry expert" analysis. We talked about quite a bit more, so here's a brief rundown of other points I had made that were left on the cutting-room floor.

She had asked me why so much venture capital money was going into nanotechnology these days. Small Times' reporter David Forman, who follows the VC trail, had briefed me on some points the day before, so I came prepared. I said that one thing to remember is that, for the past couple of years, venture capitalists have been hanging on to their money. They haven't been investing it into anything, across the board. So, now that VCs have sufficiently recovered from the '90s hangover, they have more money to spend.

One thing we discovered in looking at the numbers, though, is that while the dollar amount went down in 2002, the numbers of deals stayed steady. So, venture capitalists, at least the smart ones who have been following nanotechnology for years, are not just blindly throwing their money at it. They've been researching, carefully investing and now, with the economy picking up and some of the technology ready for the investment phase, you're seeing this increase.

But the impression that VCs are falling all over themselves to get in on the nano action isn't really true.

Government money, though, is a totally different story -- DARPA, NIST ATP, SBIR, the whole alphabet soup. It's really not the private sector that's boosting the industry right now. It's government spending. And that's a fairly normal phenomenon for an industry in its early phase. The government props it up, encourages it, gets R&D moving in the lab, helps it along into the startup phase, and then the Darwinian world of business kicks in.

Even there, though, startups can live to see another day primarily through government grants. And right now, the military is where the money is at. Shop your nanomaterial around and tell a VC that your superstrong, superlight nano-enhanced polymer would be useful for garage doors, and you might be shown the door. But go to DARPA and say it can help reinforce tank or aircraft or cockpit doors and can stop a speeding bullet, and you might have an easier time getting some dough.

The difference now, though, is that public relations people have taken over the business of nanotechnology, and so there's a perception that VCs just can't seem to stop blindly throwing their money at anything with the n-word as a prefix. That's what creates buzz and gets nano names in the news during evening drive times.

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