Quotes of the Day
Sunday, Jul. 11, 2004
Kim Hyung Gyoon Samsung | South Korea
To find Kim Hyung Gyoon's office in Samsung's R. and D. complex, just follow the baskets of dirty clothes. No, Kim is not running the company laundromat. As chief of Samsung's Washing & Cleaning Technology Group, he's the man behind a new washing machine that deposits tiny silver particles — about 1/10,000 the thickness of a human hair — onto clothes to make them bacteria- and odor-free without the need for hot water. The device represents the first mass-produced application of this type of nanotechnology — the science of very small structures — to home appliances. "In summer of 2002, I asked everyone in the office to take off their socks," says Kim, 48, a short, talkative man with large glaring eyes. "I took one sock from each person and placed it in a regular washing machine; the others were washed in a machine with the Ag+ Nano System. The next day, I asked everyone to check the odor of their socks after a day's wear. One began to stink, and the other was odorless."
Kim says he came up with the idea five years ago while on a business trip to Japan, where he learned of a brand of socks that retained their freshness even after many days of unwashed wear and tear. Tiny strands of silver with disinfectant qualities were woven into the fabric. When he got back to Seoul, Kim applied the principle to washing machines.
Here's how it works: a grapefruit-sized device near the tub uses electrical currents to nano-shave two silver plates the size of chewing-gum sticks. The resulting silver particles are sprayed into the tub during the wash cycle. According to the
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No wonder: consumers seem to like a little silver in their spin cycles. Since Samsung's nano-armed products were first launched, they have brought in an estimated $779 million in revenue. Overall, nanotech has been one of science's fastest-growing fields in recent years, with potential applications in fields as diverse as energy production and toothpaste manufacture. The nanotech market is projected to be worth $1 trillion by 2015.
Nanotechnology has its detractors, though. Lee Jo Won, director of Tera-level Nanodevices, a Seoul-based state-run R. and D. organization, believes "there is always danger with new technologies. We've done testing in laboratories with rats, and certain nano-sized particles ended up imbedded in rats' lungs after consistent exposure. However, with silver, I don't foresee problems, as it's a disinfectant."
Because this is such a hotly competitive field — Daewoo has introduced air conditioners that spray vitamin C into the environment — Kim isn't about to divulge what other nanotech projects he's working on. But one thing's for sure — from now on, even his dirtiest clothes will have a silver lining.
Andrew Black Betfair | Britain
In 1999, Briton Andrew Black was making a decent enough living as a professional gambler, concentrating mainly on playing bridge and betting on horses. But he was dissatisfied with traditional bookmakers. By the time they build in their margins, says Black, 41, "you've got to be 20% smarter to make money. And if [you] make a mistake, [you] can't trade out of it. I thought, There's got to be a better way."
So he made a better way by co-founding London-based Betfair, the peer-to-peer cybercasino that's done for gambling what eBay did for garage sales. On Betfair, there's no "house": the site's 250,000 registered customers simply post their bets and wait for someone to take them on. Betfair charges a commission on each winning bet; the more you bet, the lower the commission. When the site launched in 2000 with $1.8 million raised from Black's and co-founder Ed Wray's network of contacts, it was taking less than $90,000 a week in bets; now that figure stands in excess of $90 million a week in matched bets, about 13% of the estimated $35 billion global annual online sports-betting industry. From April 2002 to April 2003, Betfair's pretax profits rose from $1.9 million to $15.5 million. The site has registered users in 85 countries: 70% of their bets are placed on horse races. And if a company can judge its success by the number of people it's upsetting, then Betfair is thriving. The U.K.'s traditional bookmakers are still hugely profitable, but they're grumbling because Betfair permits users to "lay" bets (to back a horse, competitor or team to lose rather than win). Some charge the practice encourages corruption. Says Graham Sharpe, spokesman for old-style bookies William Hill, "If you have a bet on an exchange, you don't know who it's with; if [the person] is offering extravagant odds, you don't know why."
Black counters that his site actually makes strange betting patterns easier to identify. He points out that Betfair has signed agreements with, among others, the Jockey Club in Britain and the English Football Association, promising to inform them of any suspicious wagers. And last month the British government said it didn't think it was necessary to license or regulate those who lay bets — to the chagrin of traditional bookmakers, which had been pushing for such a move.
A big man, Black ambles around Betfair's offices in shorts and a fleece. In his spare time, Black still likes to gamble — and the next wager he'll need to make is when to take Betfair public, something Black insists won't happen for at least 18 months. "We've got to knock the company into shape," he says. "We want to get the timing right." It's the biggest bet of all, and not something even a seasoned gambler would take lightly.
John Thompson Symantec | U.S.
When most people hire a security guard, they don't expect him to be a computer programmer and a secretary as well. But that, or its electronic equivalent, is the range of services Symantec provided at the end of the millennium. Founded in 1982, the Cupertino, California, firm was best known for its Norton AntiVirus software for consumers and small businesses. But during the dotcom boom, it was also hawking software for creating Java applications and managing business and personal contacts. Investors and big corporate clients were confused, so they gave Symantec a wide berth.
Enter John Thompson, an IBM veteran of 28 years who became Symantec CEO in 1999, the first African American to head a major U.S. software company. Convinced that Internet security was the most profitable business to be in, Thompson sold off the extraneous software divisions and replaced his entire sales team and nearly all his vice presidents. (Thompson's favorite movie: The Godfather.) Then he started buying stuff — like ON Technology, a $100-million infrastructure-management company — and he massively expanded the Live Update service, which for an annual subscription automatically downloads the latest antivirus software to your computer. "Security is a process, not a product," he says. In other words, Thompson, an avid amateur chef, is constantly tweaking Symantec's recipe.
The next few years saw a virtual plague: the Love Bug and SoBig spread faster than any other viruses in computer history, becoming household names. Since then virus writers have become terrifyingly shrewd, routinely infecting thousands of PCs, often without users being aware they've been hit. Although damage estimates depend on vague definitions of lost productivity, one report put their cost of these malicious bugs to global business last year at $55 billion; in 2004, a single virus — the Sasser worm — wreaked an estimated $500 million in damage.
The corporate world's losses are the security sector's gains. Symantec's sales rose from $634 million when Thompson took over to $1.9 billion in fiscal 2004, and more than half of the firm's revenue now comes from corporate sales. The company's stock has also soared over 470% since Thompson took control. "Never in my wildest dreams could I have forecast what unfolded," he says, "but we were well positioned for it." Thompson wasn't adverse to cashing in; he made $14 million selling his options in May.
Thompson also announced in May that he was buying Brightmail, an e-mail security firm Symantec had been investing in since 2000. Purveyors of spam are even more cunning than virus writers, and Brightmail sends updated antispam defenses to its client computers at least once an hour. "It's a very natural marriage," Thompson says. "We'd been dating for a long time." Assuming the sale goes through, Symantec will likely incorporate Brightmail's technology in Live Update. Sifting your mail for unwanted stuff while protecting your front door — now that's something you would expect from a security guard.
Miodrag Stojkovic University of Newcastle | Britain
Miodrag Stojkovic's biggest fear is that "people think we're crazy scientists creating the latest Frankenstein." That's because the 40-year-old Serb, a researcher with the Institute of Human Genetics at the University of Newcastle-upon-Tyne, could become the first person to use cells from a cloned human embryo to treat disease — if a British regulator approves the experiment later this year. Stojkovic, who helped clone mammals at the University of Munich before coming to the U.K., fled the former Yugoslavia in 1991 just before the Balkan wars broke out. "I recognized something bad was going to happen," he says. The cloning wars can seem almost as fierce. Using a technique similar to that recently demonstrated in South Korea, Stojkovic plans to create embryos by injecting a patient's own DNA into an egg from which the genetic material has been removed. He then hopes to harvest stem cells — which can develop into almost any organ — and coax them to produce insulin in diabetics. Stem cells also hold promise for victims of Alzheimer's, Parkinson's and heart disease.
Trouble is, Stojkovic will discard the embryos just days after making them, and for many people that's morally unacceptable. Many religions maintain that life begins at conception and that throwing away embryos amounts to murder; "I have a clear conscience," says Stojkovic, who holds that life begins after 14 days, when the nervous system starts to form. Nonreligious groups like the London-based Human Genetics Alert warn that the techniques could be used to clone babies, something that Stojkovic opposes. "I believe in embryonic stem cells," he says. If he can come up with a cure for diabetes, a lot more people will believe along with him.
Reed Hastings Netflix | U.S.
The idea for Netflix, like many great eureka moments in business, came from a very mundane experience. It was 1997, and Reed Hastings was six weeks late in returning a copy of Apollo 13 to his local Blockbuster in San José, California. The late fee was $40, and the former computer scientist thought to himself, Never again. He came up with a simple solution — so blindingly simple, in fact, that Silicon Valley entrepreneurs are still kicking themselves for not thinking of it first. Netflix customers keep a wish list of DVDs they want to see, in order of preference, on www.netflix.com. Netflix then mails out the selected films. The service costs $22 a month, for which customers get to keep out three movies at a time. When they're done with a DVD, they stick it back in the same prepaid envelope in which it arrived. As soon as the nearest Netflix hub receives it, staff send out the next one.
That's it: no late fees, no standing in line, no walking out of the store with a film you didn't really want to see. It's working for Netflix's 2 million U.S. subscribers, almost 1 million of whom signed up in the last year alone. In Northern California's Bay Area, Netflix's largest market, the company accounts for an astonishing 10% of all movie rentals. Launched in 1999, the Los Gatos,
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Hastings, 43, is modest about his firm. "I'm a funny kind of guy to be running a consumer company," he says, admitting he'd just as soon discuss artificial intelligence. He thinks he can win the battle with WalMart, which launched a copycat service in 2002, and Blockbuster, which plans to trial a similar rental program in the U.S. soon. Hastings has an advantage; like Amazon, Netflix relies on ratings by its members, who are asked to give everything they rent up to five stars. These ratings go into the system's algorithm and out come recommendations for movies you never knew you wanted to see — like Whale Rider, which was never a top 10 movie at the box office but topped Netflix's charts. Starting from scratch, Blockbuster et al are five years behind in their online recommendation systems.
Granted, Netflix for now is dependent on the DVD, which will presumably fade when paying to download films becomes widespread. That's Blockbuster's intended path, and Hastings himself is set to start a trial download service next year. But he doesn't expect imminent success. The technology and copyright management make it too daunting for most users, and who wants to watch movies on a PC anyway? "DVDs have got a good decade left in them," he says. For Netflix, chances are it will be a very good decade, indeed.
Scott McGregor Philips | Netherlands
Most technology executives are lucky to be part of one revolution; few would even dream of being involved in two. So envy 48-year-old Scott McGregor, who two decades ago led the development of the Windows operating system at Microsoft. Today, as chief executive of Philips Semiconductors, he is spearheading the Radio Frequency Identification (RFID) movement, which aims to put electronic ID chips on everything from ketchup bottles to army tanks. The RFID chip, says McGregor, "is changing the way people do business and interact."
Sounds like hype, but it's true. RFID tags are tiny devices that transmit information about the objects on which they reside. Relatively unknown just a few years ago, RFID chips are potentially the greatest technology to hit retailing since the bar code, as giant retailers like Metro in Germany and Wal-Mart in the U.S. use them to track shipments and inventory. The U.S. Department of Defense has ordered suppliers to deploy them to help the military keep tabs on stocks of essentials, such as jeep parts, and Las Vegas casinos are snapping them into poker chips to tally bets. Little wonder that market-analysis firm AMR Research predicts a $20 billion RFID industry by 2013.
So far, Philips appears to be on top. McGregor says his firm has shipped about a billion RFID chips, far more than rivals like Texas Instruments. Philips started 10 years ago, selling rudimentary chips to European car companies as antitheft devices. When McGregor took over the semiconductor division three years ago, he identified RFID as a key profit center. His plan is working. A three-year sales slump seems to be over, and after a long string of losses, the 35 billion division has reported two consecutive profitable quarters. What's his secret? "Ease of use is in my blood," says McGregor. Of course, RFID won't approach $20 billion until several problems are resolved — prices have to fall and privacy concerns must be addressed. But its impact is already here — and it makes you wonder what McGregor will do for a hat trick.
Shigeki Ishizuka Sony | Japan
No one likes to have their boss looking over their shoulder. But Shigeki Ishizuka, the head of Sony's digital camera division, says he is unfazed whenever Shizuo Takashino — Sony's executive deputy president and one of the legendary team that created the Walkman — drops by. "I look forward to seeing him," Ishizuka says with a laugh, saying he is always prepared for Takashino's frequent suggestion to "make it smaller."
Ishizuka can get away with a jest; he's got cred all his own. Although many divisions within the Sony juggernaut have stumbled in recent years, Ishizuka has kept his department at the forefront of the exploding digital camera industry by introducing innovative, sexy products. Virtually nonexistent even a decade ago, the market for digital cameras grew to $17 billion in 2003, and sales are expected to soar by another 39% this year,
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Intriguingly, Sony is the only major digital camera maker without a traditional film background. Ishizuka, 45, considers that the company's greatest advantage. With no stake in the 35-mm camera market to protect, Sony was able to apply a fresh approach as consumers began switching to digital. The company's expertise in consumer electronics, video cameras and computers, and its emphasis on in-house design and development, he says, gave it an edge. "When you control every aspect of the parts design, and don't have to buy other companies' off-the-shelf components," Ishizuka says, "you can integrate the whole package much more tightly and elegantly — and often at lower cost," pointing to the pocket-sized DSC-T1 model in front of him as a perfect example.
In the spring of 2002, Ishizuka gathered his senior managers and declared that he was tired of incremental improvements. He wanted a radical leap: a camera roughly the size of a business-card case, but as capable as anything on the market. Cameras that size had been made before, he notes, but with sacrifices in image quality, screen size or zoom capability. "Our credo was: No compromises," Ishizuka says.
Tough talk, but not even Ishizuka realized just how high he had set the bar. Most of the camera's major components — including the battery, chipset and image processor — had to be designed from scratch. Engineers were sent back to the drawing board several times. The team's persistence paid off, however. When the camera (which features an impressive 5.1-megapixel resolution and a 2.5-in. LCD screen packed into an amazingly small body) went on sale in Japan in November 2003, it instantly became the nation's best seller — a phenomenon that has been repeated in virtually every market in which the camera has been introduced.
Ishizuka calls the DSC-T1 camera his personal Project X, referring to the name of a popular TV show that celebrates Japan's industrial and business triumphs of the past five decades. But he realizes that in this fiercely competitive business, the only thing that matters now is Project Y. "Our competitors can introduce similar products almost immediately," he says. Which means he is already planning Project Z, too.
Mike Lazaridis Research In Motion | Canada
It's a classic new-economy fable: university student starts a tech firm in the U.S., never bothers to graduate, and goes on to make billions. The only difference between that legend and the true story of Mike Lazaridis, founder of Research in Motion (RIM), is that it took Lazaridis about a decade to come up with his killer idea and when his epiphany did come, it happened in Canada, not in California.
RIM was a little-known company until five years ago, when it launched its BlackBerry, a handheld gadget for writing and receiving secure e-mail. Before that, Lazaridis tinkered with industrial displays and developed a fast way to read time codes on film, which won him a Scientific and Technical Oscar in 1999. "We've always been innovative," he says. "Whatever we get involved in, we sink our teeth into." Today, the very term BlackBerry is synonymous with wireless e-mail. Over 1 million people use the thumb-operated gizmo, led by a long list of the rich and famous that RIM says includes George W. Bush, George Clooney, Sarah Jessica Parker and the Beckhams. "We got into a market where there was really nothing there," says Lazaridis, 43, an affable teddy bear of a man who founded RIM in 1984 as a student at the University of Waterloo, about 90 km west of Toronto. Last year, the number of people
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Of course, there are breakdowns on any road to success. RIM faces a possible ban on selling in the U.S. if the U.S. Court of Appeals in Washington doesn't overturn a lower court ruling that RIM violated patents held by a rival. And Lazaridis has to worry that his big-name licensees might kill his hardware business — although, even if they do, RIM still has a healthy software and services business, which combined, bring in close to one-third of its revenue. Indeed, BlackBerry's success has made Lazaridis wealthy enough to provide over $100 million in funding to his other passion — quantum computing research — at the University of Waterloo, where the former dropout is now chancellor. One more reason for techies to continue to give him the thumbs-up.
N.R. Narayana Murthy Infosys | India
N.R. Narayana Murthy used to think of himself as a committed socialist, but three days in a Yugoslav lockup changed his mind. Back in the early 1970s, while traveling through Europe by train, Murthy was seized by the police at Nis, a town near the Yugoslav-Bulgarian border. He'd been chatting up a fellow passenger in French, and he thinks her boyfriend complained to a cop. Murthy was kept in a room in the train station for 72 hours and shipped out on a freight car. "There was no going back to communism after that," he says.
Today, sitting in the chairman's office of Infosys, a Bangalore-based software and services company, Murthy's capitalist transformation is complete. The former socialist is one of the people who turned outsourcing into a multibillion-dollar business that has rejuvenated American and European companies by slashing their tech spending. But he has also helped to put the fear of God into software engineers by raising the specter that their jobs could migrate to India, making outsourcing a hot political topic. Murthy and six friends founded Infosys in 1981 with $250 in start-up capital. The company's early years were arduous. In the 1980s, Murthy recalls, it took a year to get a telephone line and a dozen trips to New Delhi to get permission to import a single computer. But the firm quickly established a reputation as a reliable partner for American and European businesses looking to contract out software-programming work. That first-mover advantage has paid off. Infosys earned $1.06 billion in revenue last year, and expects that figure to rise by up to 31% this year.
Although he stepped down as CEO in 2002, Murthy, 57, is still immersed in Infosys as chairman and an adviser to the company's senior management. His biggest challenge: making sure outsourcing continues to thrive in a volatile political environment. As more and more American and European firms send work overseas, some politicians, labor unions and software professionals are demanding that the practice be curtailed. But Murthy thinks he can overcome the anti-outsourcing sentiment. "We can't get angry and shout slogans," Murthy says. "If we focus on delivering value to our clients, ultimately we will win." After building Infosys into an outsourcing behemoth, Murthy is now trying to protect the company from its own success.
Niklas Zennstrom Skype | Luxembourg
Watching Niklas Zennström's young company Skype grow is like driving past a McDonald's back in the '70s — every time you look, another million have been served. Skype's appeal is even more obvious than a Big Mac's: the firm provides software that lets people make free phone calls over the Internet. Since Skype was launched last August, over 15 million people in 170 countries have downloaded the program; according to Skype, about half of those actually use the software. "We don't think you should pay for making phone calls anymore," says Zennström, a serious, soft-spoken Swede. Trouble is, he's not charging for using Skype, either.
It's not the first time that Zennström has pursued a counter-intuitive business model. In 2000, he and co-founder Janus Friis launched KaZaA, a peer-to-peer exchange that allowed users to swap music and videos. Now Zennström is in the vanguard of Voice over Internet Protocol (VoIP), a technology in which voice traffic travels over the Internet. Stockholm-based Gartner, Inc. analyst Katja Ruud estimates that about 100 million people worldwide will use VoIP by 2008. Even giants like AT&T, BT and Verizon realize they've got to offer VoIP. Zennström practices extreme VoIP: free calls and free software. The catch is that Skype users can only call other Skype users. Zennström admits that "we have almost no revenue" and that, eventually, this will be a problem. So he plans to ask Skype users to pay for connections to non-Skype customers, and to license the software, especially to cell-phone makers. If the tech works well in cell phones, Skype could start serving billions.
- From Net entrepreneurs to nanotechnologists, meet 10 leaders of today's tech revolution
Photo: DAVE CAULKIN/AP | Source: Thought the tech revolution came to an end when the dotcom bubble burst? Think again. From nanotech (in your washing machine!) to stem-cell research to Internet businesses, innovations are coming fast and furious. Meet 10 leaders who are helping to shape the future of communications, entertainment, medicine — and Laundromats