Butler and Anderson reply: We appreciate Peter Foukal’s comments and the examples that he provides. However, based on interviews over the past four years with physicist founders of 91 companies, we believe that physics startups are high-risk ventures in today’s economy, and those that succeed today must focus on more than research. Foukal’s two examples were founded in 1958 and 1985 during a different economy, when even corporate giants like AT&T and GE funded blue-sky, pure research. We described the move away from that economy in our previous article “Industrial R&D in transition” (Physics Today, July 2009, page 36). Our data on more recent startups indicate that in today’s economy, companies committing substantial funds to pure research are essentially betting on the lottery. Are there winners? Yes, but they are sufficiently rare that they don’t provide an effective business model for physicists starting their own companies. Recent changes in Small Business Innovation Research and government grant policies further discourage funding a company based on pure research that has little or no focus on commercialization.

The companies that we investigated probably provide a better example of current practices. Our database suggests that for better or worse, most companies operating as Foukal advocates have already gone the way of Bell Labs. Nor would we expect PerkinElmer to continue Cambridge Research and Instrumentation’s blue-sky research practices. They have, after all, fiduciary obligations to their investors. Nor do we think that the physicist founders of the companies we studied would agree that their business models have “limited the appeal of entrepreneurship as an alternative career path.” Many physicist entrepreneurs we interviewed told us they would prefer to transform their research into commercial products affecting the lives of millions than to publish papers read by only a few.