Technology Exponentials

Despite a natural human tendency to presume linearity, accelerating change from positive feedback is a common pattern in technology and evolution. We are now crossing a threshold where the pace of disruptive shifts is no longer intergenerational; instead, it begins to have a meaningful impact over the span of careers and eventually over product cycles.

As early-stage venture capitalists (VCs), we look for disruptive businesses run by entrepreneurs who want to change the world. To be successful, we must identify technology waves early and act upon those beliefs. At Draper Fisher Jurvetson (DFJ), we believe that nanotech is the next great technology wave, the nexus of scientific innovation that revolutionizes most industries and indirectly affects the fabric of society. Historians will look back on the upcoming epoch as having no less portent than the Industrial Revolution.

The aforementioned are some long-term trends. Today, from a seed-stage VC perspective (with a broad sampling of the entrepreneurial pool), we are seeing more innovation than ever before. And we are investing in more new companies than ever before.

In the medium term, disruptive technological progress is relatively decoupled from economic cycles. For example, for the past 40 years in the semiconductor industry, Moore's Law has not wavered in the face of dramatic economic cycles. Ray Kurzweil's abstraction of Moore's Law (from its focus on transistors to a broader focus on computational capability and storage capacity) shows an uninterrupted exponential curve for more than 100 years, again without perturbation during the Great Depression or the world wars. Similar exponentials can be seen in Internet connectivity, medical imaging resolution, genes mapped, and solved 3-D protein structures. In each case, the level of analysis is not products or companies, but basic technological capabilities.

Kurzweil has summarized the exponentiation of our technological capabilities, and our evolution, with this near-term shorthand: The next 20 years of technological progress will be equivalent to that of the entire twentieth century. For most of us, who do not recall what life was like 100 years ago, the metaphor is a bit abstract. In the early 1900s, in the United States, there were only 144 miles of paved road, and most Americans (more than 94%) were born at home, without a telephone, and never graduated from high school. Most (more than 86%) did not have a bathtub at home nor reliable access to electricity. Consider how much technology-driven change has compounded over the past century, and consider that an equivalent amount of progress will occur in one human generation, by 2020. It boggles the mind, until one dwells on genetics, nanotechnology, and their intersection. Exponential progress perpetually pierces the linear presumptions of our intuition. "Future shock" is no longer on an intergenerational time scale.

The history of humanity is that we use our knowledge and technical expertise to build better tools and expand the bounds of our learning. We are entering an era of exponential growth in our capabilities in biotech, molecular engineering, and computing. The cross-fertilization of these formerly discrete domains compounds our rate of learning and our engineering capabilities across the spectrum. With the digitization of biology and matter, technologists from myriad backgrounds can decode and engage the information systems of biology as never before. This inspires new approaches to bottom-up manufacturing, self-assembly, and the development of layered, complex systems.