PALO ALTO, Calif. -- Nanotechnology has been hyped as the engine of the next industrial revolution, when molecular computers will supplant silicon chips and cheap "nanobots" will perform tasks now handled by billion-dollar factories.
Nanosys Inc., a 35-employee Silicon Valley startup that's quickly gaining strength in the nascent industry, isn't counting on such visions to stitch themselves into reality anytime soon. It's building a business on near-term possibilities, hoping to make money and lay a foundation.
But that doesn't mean its view is narrow. Nanosys is working on applications as diverse as solar cells, sensors and nano-engineered fibers and electronics while developing and licensing core technologies it hopes will build business muscle.
"Today, our focus is on very simple things," said Stephen Empedocles, a co-founder and director of business development. "Things that we can do in the next couple years to get into the market so that people will have valuable nanotechnology at their fingertips."
The pragmatic approach may not be as dramatic as some sci-fi visions -- but it's attracting considerable attention and investment.
This year, Nanosys led most nanotech startups in capturing venture capital investments, closing $39 million in financing for a total of $70 million in equity and nonequity funding since its founding two years ago.
Privately held Nanosys and its scientists regularly top lists of up-and-coming companies and researchers. It has struck deals with corporations like Japan's Matsushita Electric Works, and recently received investments from Eastman Kodak Co. and others.
It also has agreements with defense and intelligence communities, including the CIA-backed venture capital group In-Q-Tel and defense contractor Science Applications International Corp. No details outside those agreements themselves have been released.
Most experts agree that nanotechnology -- usually defined as the creation and manipulation of materials no larger than a billionth of a meter, or 1/100,000th the diameter of a hair -- has the potential to change everything.
The question is who will capitalize on it first, and when.
President Bush recently signed a bill to invest nearly $3.7 billion for work in nanotech. Corporate labs are investing heavily, and universities have set up more than 100 research institutes across the country. Nanosys is among more than 400 startups playing the field.
Nano-size particles have unique qualities that make them especially enticing. Nanotech can make materials faster, better and cheaper by building materials up atom by atom through chemical reactions in $10 beakers and flasks, rather than in the multibillion-dollar factories of today's semiconductor industry.
Nanosys' goal is to become a provider of nanotechnology-based devices that its corporate partners can commercialize without needing to know the details -- much like computer makers integrate an Intel Corp. microprocessor into their products.
Empedocles is careful not to oversell what's feasible in the near future. Molecular computers may be distantly possible, but Nanosys isn't counting on replacing Intel Corp. tomorrow.
"Our vision is different -- it's basically looking for the low-hanging-fruit opportunities along this path," he said.
In Nanosys' lab, researchers work on nanomaterials that repel water so well that drops of liquid literally bounce from the surface. The company also is making strides in electronics that don't require the superheated vacuums and clean rooms of traditional semiconductor technology.
The photovoltaics it's developing -- the technology converts sunlight into electricity -- are different from today's expensive crystalline silicon solar cells. The hope is that, through nano-engineering, they might someday be molded into construction materials -- or even painted onto surfaces.
Nanosys is not trying to reinvent the wheel with more exotic and unproven creations like the carbon nanotubes championed by others.
Carbon nanotubes are a promising technology, offering stronger-than-steel strength at a fraction of the weight and excellent electrical properties, but they're far from ready for prime time.
"The problem with carbon nanotubes is you can't manufacture them with any sort of control," Empedocles said. "Even the most bleeding-edge nanotube synthesis processes produce all types of nanotubes at once."
But even with a dream team of researchers, a strong patent portfolio and simple near-term applications, Nanosys -- and nanotechnology in general -- must now deliver something to match the high expectations of investors or risk popping the growing bubble of interest, said Stan Williams, Hewlett-Packard Co.'s director of quantum science research.
"They got the talent. They got the money," he said. "Now it's an issue of execution."