Tim J. Smith, PhD
Founder and CEO, Wiglaf Pricing

Published April 1, 2002

Chicago is getting some good hype in Nanotechnology. For those of us used to IT, let’s discuss the basics of nanotech.

A nanotech device has dimensions on the order of a nanometer to thousands of nanometers. While this sounds like a huge range, 1 or 1000, the critical dimension is always on the order of an atom or a few atoms. It will be some time before we craft machinery smaller than the atom size. Electrons, neutrons, and protons are hard to hold in one place and move by the rules of quantum mechanics far more than classical physics. Hence, for the next fifty to hundred years, nanotechnology could be it for the frontier of tech business.

A device on the order of a nanometer is a device that is the size of a molecule with only a few atoms. A typical atom is about 1 Angstrom long, or 1/10th of a nanometer. It takes around ten atoms lined up to make a device that is on the size of a single nanometer. A thousand atoms are needed to create a large nano device.

Devices have been built in the few nanometer range but clearly not with Caterpillar earth moving machinery. Rather, devices that fit in the 1 – 50 nanometer range are often made using molecular chemistry techniques catalysts, reactions, purifications, distillations, semi-permeable membranes, etc. The advantage of producing devices of this size is that they are smaller than a cell and closer to the size of a cell component such an organelle or lipid bilayer. In fact, a nanometer device could be masked in a protein or a carbon nanotube (Buckminster Fuller and Richard Smalley, thank you.) At this size range, the nanodevice could enter a cell to perform some piece of work such as killing a cancerous cell. Not bad for nanotech a possible method to bring a new therapeutic regimen to market. Who is likely to do this? Well, let’s look at the track record of gene therapy firms to make that decision and realize that we are playing in the backyard of the Abbotts and Mercks.

On the other end of the nano scale are micron to sub-micron devices that can be made using silicon techniques. Making large nano devices is out of the realm of molecular chemistry and into the world of wafer fabrication. However, instead of producing logic gates that can manipulate ones and zeros for the IT shop, these silicon devices are tiny motors and generators. To create these devices, engineers and scientist have to sculpt three-dimensional silicon using photolithography, masks, photoresist, clean rooms, vacuums, silicon substrate, etc. The advantage of machinery of this scale is the ability to imbed moving devices on the same platform as an analog or logic circuit. (Others have come up with more unique value propositions, see Again, who is likely to do this? Well, let’s look at the state of the semiconductor industry in 1970 and think of Motorola, Intel, and TI before they were giants.

What are the biggest hurdles of creating useful devices on this scale? There are many, but the fundamental physics of thermodynamics is an area that causes one of the greatest concerns. Nano devices have to consume and create energy that is near the energy scale of the thermal bath in which they operate. This greatly limits their ability to perform much useful work. One of the advances that generated a lot of interest has been to create molecular structures that have an imbedded ratchet mechanism thus allowing for only one way movement along a line. Ratchets are simple when working with large objects but difficult to make with just 20 atoms held together by molecular forces.

Why do I list the big guys in a review of new ideas that is being worked on by new ventures? As the ideas get flushed out, I expect the big guys with the marketing, finance, and large scale manufacturing excellence to get involved. Last I checked, a state of the art DRAM factory costs about $ 4 B. It will be hard for a small firm to scale-up that much. Licensing and buyouts are a better exit plans for these youthful Chicago firms.

The May Report, TECH BUSINESS BRIEFS, April 1, 2002

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About The Author

Tim J. Smith, PhD, is the founder and CEO of Wiglaf Pricing, an Adjunct Professor of Marketing and Economics at DePaul University, and the author of Pricing Done Right (Wiley 2016) and Pricing Strategy (Cengage 2012). At Wiglaf Pricing, Tim leads client engagements. Smith’s popular business book, Pricing Done Right: The Pricing Framework Proven Successful by the World’s Most Profitable Companies, was noted by Dennis Stone, CEO of Overhead Door Corp, as "Essential reading… While many books cover the concepts of pricing, Pricing Done Right goes the additional step of applying the concepts in the real world." Tim’s textbook, Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures, has been described by independent reviewers as “the most comprehensive pricing strategy book” on the market. As well as serving as the Academic Advisor to the Professional Pricing Society’s Certified Pricing Professional program, Tim is a member of the American Marketing Association and American Physical Society. He holds a BS in Physics and Chemistry from Southern Methodist University, a BA in Mathematics from Southern Methodist University, a PhD in Physical Chemistry from the University of Chicago, and an MBA with high honors in Strategy and Marketing from the University of Chicago GSB.