So it’s like building from the inside-out?
“We call it from the bottom-up,” Von Ehr says. “It’s the way nature does it. A tree basically builds from the bottom-up. It takes dirt, water, and air and rearranges the molecules and builds a tree. Nature has been doing it since the beginning of time, so we know it’s doable. It’s just not yet an engineering discipline.”
If Von Ehr wanted to fund a major nanotech company, he’d have to build one himself, from the bottom-up.
On July 1, 1997, Zyvex’s first hire, a Californian physicist, showed up for work. The office and the lab were one and the same—a 400-square-foot room in Richardson. Outfitted with an atomic-force microscope, Zyvex was up and running.
Von Ehr continued his tour of universities and research facilities, and when he returned from one of his trips, he discovered the downside of giving a physicist too much free reign.
“I gave him an unlimited budget, and he exceeded it,” Von Ehr says. “He spent an incredible amount of money buying toys. Physicists will buy expensive toys.”
As the payroll increased, so did the expenditures. Because Von Ehr wanted results quickly, he gave his scientists a generous budget, which they used in a manner different than Von Ehr himself would have preferred. “Their mentality was, ‘Let me get all the resources that I can imagine having and then maybe some thought will occur to me what to do with them,’” Von Ehr says. An alternative would be to figure out what one intended to do first, then take comfort in knowing resources would be easily gained. It’s the difference between looking at a recipe to see what ingredients you need to cook dinner versus buying as many groceries as possible then deciding to make a simple sandwich. It’s also the difference between scientists spending “OP money”—as in “other people’s money”—versus an entrepreneur footing the bill on his own. Since 1997, Zyvex has raised more than $40 million, some from grants but much of it coming directly from Von Ehr’s pocketbook.
Dr. Harold “Skip” Garner, an innovator and professor at UT Southwestern, is impressed. Garner and his team have numerous ideas for nanomedicine, applying nanotechnology to improve diagnostics, treatment, and understanding of the human body, and are currently collaborating with Zyvex.
“Jim is a self-made guy, a scientific adventurer,” Garner says. “He made some money then decided against all standard business wisdom to undertake the formation of a basic research company in an out-there area.”
Such an undertaking does have its downside. Von Ehr admits he was easily fooled in the past, but the lengthy shopping lists were a learning experience. About three years ago, he hired Dr. Tom Cellucci as president and COO to keep an eye on the day-to-day business affairs. And whereas Von Ehr originally thought he could trust the brainy PhDs to lead him to his grand vision, in retrospect he should have given them more direction. Von Ehr has since taken it upon himself to become even more knowledgeable about nano. “For a CEO, I sound more like a scientist sometimes. But it’s my money that we’re spending here. I want to be a good steward of my own money,” he says.
Fiscal progress has been steady, but Zyvex has yet to turn a profit. Von Ehr won’t forecast the break-even number publicly, but he says last year’s revenue of $10.3 million came close. Zyvex expects to achieve cash-flow break-even this year.
Von Ehr hopes to commercialize some of the work Zyvex has done in the past, putting price tags on some of the tools the scientists have developed internally. Zyvex makes the tools that make the tools to work on nanotechnology. In their labs, they’ve created Microsystems that help them operate on a scale smaller than anything possible in a machine shop, making tools that will enable even smaller tools for even more precision. “Our ultimate goal is to move down to a scale about 1,000 times smaller than this,” Von Ehr says, holding a chip encased in a promotional piece of plastic that sits on his desk. The chip is about the size of a number key on a cell phone. Von Ehr is ready to share some of those tools with the rest of the world and reinvest profits in R&D.
“I do feel frustrated sometimes at the fact that we’re not as far along as we should be,” Von Ehr says. “I think it’s because I haven’t been able to tell the scientists exactly what to do. I have told them approximately what to do. They’d say, ‘Tell me exactly.’ I’d say, ‘Take this machine and use it to put together the parts to build a similar such machine. ‘Well tell me what those parts look like. How big are they? What force do they need to have?’ You’re the PhD. I’m just the business guy.”
Atomically precise manufacturing will happen; Von Ehr is convinced of it. “With our push, we can make it happen sooner than it would with drift,” he says. But to what end? What would a molecular assembler assemble? Besides stronger bicycle frames and super fibers for space elevator ribbons, what’s nanotechnology good for? Scores of scientists have their own ideas. [See “Small World,” p. 39.] Von Ehr isn’t so sure, which suits him just fine.
“I think I may sound like either a fool or a naïve person when I say, ‘I don’t know.’ You tell me what the important product is going to be in 10 years, and I’ll tell you how we’re going to make it with our technology. But let’s go back 10 or 12 years to the Internet, which most people hadn’t even heard of at the time. Tell me, from the perspective of 1994, what are the killer products going to be in 2006? I think the exercise is foolish for me to tell you what I’m going to be making. What I can tell you, though, is our system will probably have just a handful of chemical reactions and we can build rigid things with atomic precision. The most important product of this system is the system itself and the technology that goes with it.”
