26 Scientific American, April 2020
VENTURES
THE BUSINESS OF INNOVATION
Wade Roush is the host and producer of Soonish, a podcast
about technology, culture, curiosity and the future. He
is a co-founder of the podcast collective Hub & Spoke and
a freelance reporter for print, online and radio outlets,
such as MIT Technology Review, Xconomy, WBUR and WHYY.Illustration by Jay BendtSome global crises, such as climate change, are too big to over-
come through individual action or even through government-
level policy change. To survive this century, we are also going
to need some huge science and engineering breakthroughs—
especially in areas such as energy and transportation. Unfortu-
nately, the systems we have built to encourage in no vation are in
a dismal state.
Federal investment in R&D as a share of the overall econo-
my is lower than at any point in the past 60 years. And venture
capital—the industry that is supposed to take risky ideas from
government or university laboratories and turn them into valu-
able businesses—has instead spent the past decade investing in
low-stakes tech that helps us order takeout, avoid taxis, swap
selfies and overpay for desk space. Many of Silicon Valley’s “uni-
corns” are doing no more to improve the world than their myth-
ical namesakes [see my column “The Big Slow-
down,” Scientific American; August 2019].
There is, however, at least one bright spot in
the world of tech investing. I got a glimpse of it
on a recent visit to The Engine, a for-profit ven-
ture firm set up in 2016 by the Massachusetts
Institute of Technology. It is designed to fund
ambitious ideas in areas it calls “tough tech”:
energy, nanotechnology, quantum computing,
immunotherapy and other fields where the tech-
nical and regulatory challenges are too daunting
for most venture capitalists.
A case in point: Commonwealth Fusion Sys-
tems. The En gine-backed start-up has turned a
former Radio Shack down the street from M.I.T.
into a lab where it tests components for future
fusion reactors that could produce nearly inex-
haustible, economical, carbon-free energy with
vastly less radioactive waste than conventional
nukes—an elusive goal that scientists have been
trying in vain to accomplish for more than half a
century. Chief operating officer Steve Renter says
Commonwealth’s “Kitty Hawk moment”—when
it proves its demonstration machine can gener-
ate more energy than it consumes—could come
as soon as 2025.
“To get technologies at a scale that impacts
what’s happening in our climate, in the time frame in which
we need it, it’s go ing to require some pretty incredible teams,”
says Ann DeWitt, a general partner at The Engine. “In areas
like energy delivery, it means figuring out how you make that
thing a business and how you integrate it into existing infra-
structure. Those are areas where I think it’s really hard for clas-
sical investors to go.”
Part of what sets The Engine apart is the timescale of its
$200-million fund. Limited-partner investors know they might
not get their money back for 18 years or more, compared with
the eight- to 12-year life of a typical venture fund. Plus, the firm
provides lab space and equipment in addition to mentorship
and networking. And it welcomes companies that hopscotch
across disciplines in ways that might puzzle other investors.
“We’re not afraid to look at a founding team with a physicist, an
optical engineer and a stem cell biologist,” DeWitt says.
There are 20 start-ups at The Engine right now, and the firm
is renovating an old Polaroid building that will soon hold 100
companies and 800 entrepreneurs. Researchers come to The
Engine not because they are trying to make a quick buck but
because they have an idea they can’t bring alive anywhere else,
DeWitt says: “They’re compelled into entrepreneurship because
of what they’re trying to achieve.”JOIN THE CONVERSATION ONLINE
Visit Scientific American on Facebook and Twitter
or send a letter to the editor: [email protected]Tackling the
Toughest Tech
A few brave investors are backing
start-ups that aim to solve the world’s
hardest problems
By Wade Roush
© 2020 Scientific American