Pablos Holman is a hacker, inventor, managing director of venture firm Deep Future and author of Deep Future – Creating Technology that Matters. Holman’s projects include cryptocurrency in the 1990s; AI for stock market trading; building spaceships at Blue Origin for Jeff Bezos; and the world’s smallest PC. Holman helped start the Intellectual Ventures Lab for former Microsoft Chief Technology Officer Nathan Myhrvold. Their team was awarded 6,000 patents on their own inventions, including a brain surgery tool; a machine to suppress hurricanes; a nuclear reactor powered by nuclear waste; and a machine that can shoot mosquitoes out of the sky with lasers – part of an impact invention effort to eradicate malaria with Bill Gates. Holman has spoken at Stanford, the United Nations, the World Economic Forum at Davos, the Microsoft CEO Summit, the CIA, Google Zeitgeist and The Milken Global Conference. His TED Talks have over 30 million views. He recently spoke to The Innovator about his book and how deep tech will disrupt traditional industry.
Q: What are you trying to get across in your new book?
PH: We think we live in a world full of tech but it’s really just a world full of software. There’s lots of good things about that, and certainly a few crummy things, but what I think people don’t realize is we’re missing out on bringing other kinds of technologies to life that could help make the world so much better. An easy way to get your head around this is if you add up the revenue of every software company in the world, including Meta and Microsoft and Salesforce. you get about $2 trillion a year of revenue. Two trillion is a lot of money but global GDP is excess of $100 trillion a year. The delta is all the other stuff: energy and food and water and waste and sanitation and construction and apparel and mining, areas that have been completely ignored by Silicon Valley. Apparel alone is a $2 trillion industry. It’s as big as software, but we don’t think of it that way. What if we could make that business, that industry, 10 X better? There are people in the traditional industries trying to make their business 1% better, but if you apply new technology and reinvent how you do things, that’s where you’re going to get a force multiplier and make it 10 X better, 100 X faster or cheaper or cleaner or more humane. That’s the power of deep tech, the technologies that are not exclusively software that we could be advancing and bringing into the world. There are technologies that people have been working on in obscurity, there’s new scientific discovery coming out of labs, all this has been happening for decades, and then it gets dropped because venture capital won’t touch it. What I’ve been doing is trying to course correct. I’m trying to steer the machinery of venture capital and aim it back at these new deep tech technologies. I have a whole bunch of examples in the book of technologies that may sound crazy but technically work. If we can use these inventions to make industries that are worth trillions of dollars a year 10 X better, we can make a big difference.
Q: Tell us about some of your investments
PH: One of the examples in the book is shipping. We invested in a company called Ladon Robotics that is making cargo ships that can just sail themselves across the ocean. There’s two parts to that. it’s an autonomous ship. The technology for that isn’t that hard. It’s easier than self-driving cars because there’s not a lot of things to run into out there on the ocean. You can just duct tape a Tesla to the front of it and you are done. The second part is wind. Wind power sounds crazy but sailing has been working for centuries so why don’t we use it for cargo? We built this massive shipping industry– which generates $2 trillion a year- which is moving Happy Meal toys from China to Los Angeles and they’re burning the nastiest bunker oil available. Most people don’t realize a cargo ship has two gas tanks. One of the engines burns refined fuel, like what you use in your car. That’s not clean, but it’s invisible. When the ship is over the horizon, out of sight, they switch to burning this nasty bunker oil in the other engine, That explains why cargo shipping accounts for probably more than 3% of global CO2 emissions most years, about the same as air travel. So, could a cargo ship sail itself? Well, it turns out that’s not that hard to do. All shipping uses weather prediction to plan their routes. They do it not to find the wind but to avoid storms because most of these cargo ships can’t handle being in a storm of any kind, they’ll lose cargo, so they route around the storms. What we do is we look for the wind and go that way. The ship has no fuel. It has battery backup. If you do end up in a dead zone with no wind you can use the battery to get back to where the wind is. It’s the cheapest electric you can get, because cargo ships are moving a lot of weight anyway. So you don’t have to make them lightweight the way you would want to in a car or an airplane. The ship can charge its own batteries because it has solar on the sails.
Q: Won’t trips take significantly longer?
PH: Not really. If you have a container ship in Shenzhen and you’re trying to get it to Los Angeles, it takes about 50 days on average. Fourteen of those days are on the water; the rest of the time you’re just waiting to get into a port. Those 14 days of crossing the ocean are 30% slower when you are shipping with wind: your 14 days become 18, 19, or 2 days, so your 50-day trip becomes a 55 day trip, but you don’t need any fuel.
Q: Sounds disruptive. Have any of the big shipping companies bought one of these yet?
PH: We invest very early. Laton Robotic have prototypes and they have all that tech working but they have yet to build the first cargo ship. There’ a class of people, maybe including your readers, who won’t believe in an autonomous container ship that can sail itself before the first one is delivered. That’s why venture capital matters. We can build the first ship. There’s nobody in the shipping industry that’s going to build the ship I described. Shipping executives get sailing because they probably sail on weekends and they probably ride to the marina in a self-driving Tesla,but they’re not going to make a self-driving cargo ship that sails itself. There’s a kind of irony here. What you need to invent new innovations like this is proximity to the problem. But no one in the shipping industry is going to do it and nobody in Silicon Valley’s ever been on a cargo ship so they don’t know what the problems are. They’re focused on the problems they have, like getting weed delivered to their dorm rooms by drone. That’s where we can make a difference and what’s so exciting about working on the things we do.
Q: What are some of the other deep tech technologies that you are working on?
PH: There’s not enough energy and I think we need to get aggressive about making more. Not even counting the needs of AI, we need 10x more global energy production. We have invested in some companies that can help us do that. One of them is a solar farm in space called Virtus Solis.A solar panel in space will get sun 24 hours a day, and then we can beam the energy down to Earth using radio waves. It’s a way to take this highly scaled, super low cost, highly developed energy system of solar and turn it into base load energy that works around the clock. There’s nothing technical about it that we don’t know how to do. The only hard part of this has been that launch cost was way too expensive. SpaceX has reduced the cost enough that putting solar panels in space is starting to be economical. In this decade, thanks to the private space launch market, we’ll get that cost down even further, which means that putting a solar farm in space will be cheaper than putting it on Earth before long. This is a way to make solar into carbon-free base load energy that scales around the world. We can beam that energy anywhere we want and it’ll be cheaper than coal a decade from now. We think we can have the first commercial array up in about four years. The company is getting contracts and off-take agreements already, so they use that to try and help with the fundraising for building the first one.
Another company that really excites me is Deep Fission, which makes SMRs [ small nuclear reactors]. The design uses the same pressurized water reactor tech already deployed in a hundred reactors around America. Deep Fission’s reactor is about the size of a Toyota. It gets lowered a mile deep in a borehole. A pipe in the hole gets filled with water that cycles through the reactor, where it instantly becomes steam that goes back up to the surface into a turbine and turns a generator. Fifteen megawatts of electricity are produced, enough to power about eleven thousand homes, even if a bunch of them are charging Teslas at night. Want more power? No problem, drill another hole. What if it melts down? Most of today’s nuclear reactors require pumps to push water through the reactor core for cooling. Chernobyl and Fukushima are examples of what happens if the pumping stops: the reactor overheats and causes a meltdown. The Deep Fission reactor solves this problem in a very clever way. A mile-deep hole full of water creates the exact amount of pressure needed, just from gravity. The thing will stay cooled for as long as the Earth has gravity. There is another big advantage.The actual specification for nuclear reactor safety is that you have to build so much cement around it that a 747 could kamikaze into it without damaging the core. That containment vessel is one of the biggest expenses in building nuclear power plants. The Deep Fission reactor gets this containment for free. There’s ten billion tons of rock between this reactor and anyone’s backyard so you can put that reactor anywhere- under your house, under a skyscraper, under a data center – and it is safe. The first customers are, in fact, data centers, because they have the most extreme demand growth at the moment. Lots of them are already signed up. I couldn’t be more excited. I think it’s the most pragmatic of all the SMR companies that I’ve seen, and I look at a lot of them.
Q: What is your message to Old Economy companies?
PH: All these older industries that we’ve been talking about like shipping and energy and manufacturing got a free pass because Silicon Valley didn’t come for them. That is not true anymore. The canary in the coal mine might have been Uber. Any taxi company in the world could have made an iPhone app. None of them did. So, we replaced that industry with a startup. Look at Tesla. Any auto manufacturer could have gotten motivated and made an electric car. None of them did. You think your industry is hard? SpaceX did it with space. There’s not a harder industry than that, there’s not a more regulated, more difficult industry to navigate than space, and it’s been disrupted by a startup. So, you shouldn’t need any more evidence that your industry is going to succumb to new technology and Silicon Valley playbooks. It doesn’t all have to come from Silicon Valley. We see deep tech innovation all around the world. The inventions can come from anywhere but we are going to build businesses using the machinery of Silicon Valley. We’re using startups. We’re using venture capital. We’re using the Uber playbook. When my first autonomous cargo ship sails do we sell it to Maersk or do we build the next Maersk? That’s the message for your audience. Your company will be disrupted, and you will not win in a war against technology that’s 10 X better. I want Old Economy companies to recognize this as an opportunity. I know they aren’t innovators. We’ve been telling them the wrong thing. We’ve been telling them they need to innovate or die. The dying part they get but they’re never going to be innovators. That’s not their job. Their job is to engage with the innovators. If you’re a shipping company, go talk to Laton Robotics, find out how you can help them make that happen faster, and how you can be part of the new thing instead of being part of the old.
Take a lesson from the tech industry. Why did Microsoft try to buy or invest in Open AI? They have 1000s of experts on AI hanging out at work all day. They could have done what OpenAI did but they didn’t because they’re too big. Microsoft and other Silicon Valley companies have learned to acquire the innovators and next gen technology. They know they need to disrupt themselves or they will be disrupted. If you are an Old Economy company you have got to learn that lesson too. All it’s going to take is one of your competitors to decide that they’re going to do what I just described and you become the biggest loser of your entire industry. All I need is one player from each industry that decides they want to go to the next level and adopt the new technology to make themselves an exponentially better business. That’s how we’re going to do it in every industry. It’s either going to be one of them or zero of them. That’s it. We’ll make it happen either way. We have technologies for mining, we have them in apparel, we have them in manufacturing and in semiconductor lithography. We have them in almost every industry now. Every week now we are investing in more of these disruptive deep tech companies. We’ll do hundreds of them. Keep an eye on what Deep Future is doing if you want to see the future that is coming.
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