Leaps of faith
For 25 years, Mike Lazaridis has been perfecting the technology behind Canada's most popular invention:the BlackBerry. Now he's using his curious mind—and his money—to help discover the next Einstein
Friday, April 25, 2008
When he knows he's on to something, his small blue eyes light up behind Benjamin Franklin-esque bifocals. The founder and co-CEO of Research In Motion is trying to explain the importance of pure research in the realm of theoretical physics and, sensing that the subject matter is difficult to grasp, Mike Lazaridis, eyes alight, launches into a one-man skit starring none other than Albert Einstein.
"Let's go back to 1905," he says, "a record year for Einstein." That was Annus Mirabilis for the physicist, who published four major papers detailing, among other things, his theories on special relativity and the particulate nature of light. "Here's a guy going into the grants department"—and here Lazaridis drops into a German accent. "I vish to have a small stipend to pay for my blackboard, my house, a supply of tobacco for my pipe and for a few trips I'd like to make and the letters that I send."
"Because I have this idea that light is an absolute speed limit and that it's made up of these little corpuscles that I call quanta."
"They're gonna go, 'What is this guy talking about? So how is this going to help with horse production?'" Lazaridis bangs the table with his left hand. "It's 1905. What is the current imperative? Horses! We needed horses. We were trying to figure out how to make more stagecoaches! Think about it!" He pauses.
"Quanta, that breakthrough that Einstein got the Nobel Prize for, that's semiconductors, that's lasers, that's fibre optics, that's everything," he says. "Relativity theory—GPS wouldn't work without that," he says. His lesson concluded, Lazaridis sits back in his seat and spreads his hands as if to say, "Think about that."
It's not the kind of impassioned speech you'd expect from the co-CEO of one of Canada's biggest companies. Even compared to his notoriously media-wary counterpart, Jim Balsillie, Lazaridis is known as "the quiet one." He'd much prefer sitting down for Q&A with an irreverent science journal like New Scientist than with a business magazine. In his mind, he's the guy behind the scenes, the guy whose singular mission is to make sure RIM keeps pumping out more of its highly addictive BlackBerrys (as the magazine went to press, rumour had it that the company would soon release a touchscreen version to go up against Apple's iPhone).
So, outbursts, especially in front of journalists, are rare. It's just that the pervasiveness of short-term thinking—worrying about building better stagecoaches instead of dreaming up satellites, or pandering to earnings-obsessed analysts rather than laying the groundwork for future innovations—gets him fired up. Lazaridis, more than anyone else, knows that nothing he has achieved in the past 25 years—certainly not the invention of a handheld e-mail device such as the BlackBerry—would have been possible without the pioneering work of theoretical physicists like Einstein.
That's why he's here at the Perimeter Institute for Theoretical Physics in Waterloo, Ontario, a haven for some of the world's top minds in scientific research and a place that may well harbour the next Einstein. It's noon, and the blackboard-lined hallways are eerily quiet (most of the staff and students are nocturnal by nature). Lazaridis is seated in one of the few enclosed corners of the open-concept building. Down the hall, in the Black Hole Bistro, a tableful of young physicists are discussing matters of light, energy and atoms over bowls of onion-and-pear soup. Most of the lounges show no signs of life, save for the alien scratchings of the world's hardest math problems on the blackboards. In the Mike Lazaridis Theatre of Ideas one floor down, the muted applause following a presentation can just barely be heard. Lazaridis, in his blue shirt and tie, is smiling. His snow-white hair is, as always, combed into an immaculate wave.
Whenever he can, Lazaridis likes to roam the halls and talk with the math whizzes who work here—guys like Rob Myers, one of the nation's foremost experts in string theory, and Lucien Hardy, whose contributions to quantum teleportation are known around the world. Lazaridis is not looking to glean any scientific tidbits to take back to his headquarters—most of the pure research going on here will never lead to any practical commercial applications. "He wants to see the activity," says Myers, the institute's interim scientific director. "He's a fan of science and excited by it."
That's one reason why, in 1999, Lazaridis donated $100 million of his nascent fortune to seed the institute. Another, he says, is "because people take theoretical physics for granted." No kidding. This world of equations and chalk dust is about as far away as you can get from the world of commerce. Why anyone would hand over such a massive amount of money—at the time, close to one-fifth of Lazaridis's net worth—to a collection of wild-haired math freaks is lost on most of the folks on Bay Street. Sure, Lazaridis knows that quarterly earnings are important. (In its most recent quarter, RIM posted a higher-than-expected profit of $412.5 million and shipped 2.2 million new BlackBerrys, the first time in the company's history that it broke through the two-million-mark in a quarter.) But he also knows that without the kind of work being done at Perimeter, chances are slim that someone will develop another world-beating technology like RIM's 60 or 80 years down the line.
"There's a tendency to say, if this stuff isn't practical, why should we fund you?" says Lazaridis. "It becomes an issue of faith."
Mike Lazaridis knows a thing or two about faith. When he left the University of Waterloo in 1984, just shy of a degree in engineering, he could hardly have predicted what the future had in store for Research In Motion, the company he was preparing to launch with Doug Fregin, a childhood friend from Windsor, Ontario. They were each just 23 years old. With a small government grant and a family loan of $15,000, the pair knew only that they were pretty handy with a circuit board, and that their talent had to be worth something.
RIM's first contract was with General Motors: For $500,000, the two-man outfit delivered a networked display system that scrolled messages across LED signs at GM's factories. It was a neat project, but hardly revolutionary. "You have to understand, the BlackBerry didn't happen overnight; it happened over a decade," says Lazaridis, now 47. "It's not like one day we woke up and said, 'Eureka!'" Lazaridis isn't a fan of this notion of "aha" thinking. It doesn't work that way, he says. Rather, innovation is iterative, one thing built on the back of another. Were it not for the seemingly disconnected contracts RIM was picking up in those early days, the technology that would one day power the BlackBerry might not have come together.
This is especially true of RIM's contract with Rogers Cantel Mobile Communications in the late '80s to design connectivity products for a data network called Mobitex. The deal made RIM the first wireless data technology developer in North America to do this. And while wireless technology would eventually become the singular vision for the company, Lazaridis was busy designing all manner of products: One of the most surprising was the DigiSync film reader, a device used in motion-picture labs. (For this, Lazaridis snagged both an Emmy and an Oscar in technical achievement.)
By the early '90s, RIM was rolling out a steady stream of wireless data management products: wireless point-of-sale terminals, wireless modems, even a system and method for "pushing" packets of information across wireless networks, called RIMgate, which grew out of the Mobitex contract. The tools needed to create something like the BlackBerry were slowly coming together.
Along the way, a fundamental shift in the company's structure took place. Lazaridis, realizing he was a better engineer and dreamer than he was a finance guy, decided to hive off the financial duties from his R&D role. In 1992, Jim Balsillie, a chartered accountant from a Kitchener-based customer of RIM's, was hired as co-CEO. (Fregin assumed the role of vice-president of operations.) Balsillie would deal with the day-to-day business and the shareholders, and Lazaridis would provide the overall vision for the company. In other words, the co-CEO structure not only allowed Lazaridis to focus his time on development and engineering—the kind of stuff he really loved—but it signalled that precisely one-half of RIM's mandate would be innovation.
And, boy, did Lazaridis have something big up his sleeve. RIM had developed a prototype of a two-way messaging pager, and soon he noticed that employees were taking the prototypes home with them to stay in touch at the shopping mall or as they picked up their kids from soccer games. "The more we interviewed them, we noticed that, even when the battery life was only a few hours and the device was the size of a hamburger and had wires sticking out of it, they still carried it everywhere," remembers Lazaridis. "When you see something no one else is doing that your employees find that addictive, you jump on it."
He focused his nearly 100 employees on perfecting the pager technology. Its big moment wouldn't come until he decided they had everything they needed, says Lazaridis. Once they did, "we bet everything on it." In 1998, RIM released the Inter@ctive Two-Way Pager. A year later, Lazaridis dropped the BlackBerry on the world (the Smithsonian has permanent exhibits for both devices).
Dozens of models later, BlackBerrys are RIM's sole focus. More than 14 million customers twiddle their thumbs over the device's miniature keyboard, and Research In Motion is now the sixth-largest cellphone manufacturer in the world. Last year, it had revenue of $6 billion (U.S.) and a market value of some $67 billion (U.S.). As for Lazaridis, he's one of the richest people in Canada, with a personal fortune estimated by Forbes to be $3.6 billion (U.S.). Not a bad payoff for the $15,000 gamble he made in 1983.
The way Lazaridis sees it, the key to the BlackBerry's success rests in large part on the fact that RIM relies on the device to keep its own operation running. "There are two types of companies," says Lazaridis. Once again, his eyes twinkle behind the bifocals. "There's one company that makes products that other people use, but they don't actually use them themselves. Then there are companies that make things they actually use and depend on. We fall squarely in that space—we build things that we use every day." The BlackBerry is the real-time nervous system by which RIM managers and engineers collaborate, trade ideas and monitor customer feedback—just like it is at companies the world over. That means self-motivation is the key to RIM's innovation process: Its employees are driven to dream up bigger and better products, in part because there's a personal payoff at the end—a cooler, more powerful BlackBerry.
Even as the company has grown—from less than a dozen employees in those early days to more than 8,300 today—Lazaridis has kept all of its operations squarely in his sights. From his office on Columbia Street in suburban Waterloo, it's a pebble's toss to the engineering facility; another building houses customer support; further down the street is the manufacturing plant. (RIM has other manufacturing and sales facilities around the world, but "we have a microcosm here," he says. "That's the core.") Lazaridis could make a tour of his entire organization in an afternoon. On foot.
And he does. Once every couple of weeks, Lazaridis holds what he calls "vision meetings." With so many research groups each working on their own cog—the display group, the software group, the standards team, the radio crew—the meetings are key to keeping them on task. They're by invitation only, and Lazaridis uses the time to rally the troops and let them know how the battle's going.
Jim Balsillie is fond of saying that RIM's product pipeline extends about a year to 18 months out. Actually, says Lazaridis, "it's longer than that." But what there is to glean about future handsets resides in the world of blogs and rumours. There's a prototype 3.5G BlackBerry that Lazaridis has previously admitted he's played with. As well, a patent has allegedly been filed for RIM's touchscreen answer to the iPhone, which analysts predict will be directed not at the company's business-oriented core but at the more casual consumer. You can be sure that whatever Lazaridis is planning, it will be researched meticulously. "We have people making sure we choose the right technologies three years out, four years out, and so on .... People say, 'Well, don't you have a five-year vision?' And I say, well, not really. That's a long time, and at the rate we're going, things change a lot."
The hundreds of scientists, physicists and mathematicians at the Perimeter Institute are on a slightly longer schedule. Most of the research they're doing—whether it's formulating a new theory on quantum gravity, trying to prove whether teleportation is possible (it is, sort of), or looking at what happens when matter enters a black hole—will have to be published, peer reviewed, edited, revised and supported before it even gets to the experimental stage. And that's supposing the tools needed to test their hypotheses have even been invented.
For Lazaridis, this place is the fulfillment of a dream he's had since his university days. As a student of engineering, there wasn't a lot of theoretical physics on Lazaridis's curriculum, and what little there was had much more to do with history than with actual research. "I had an amazing physics teacher," Lazaridis remembers. "He said, 'During the day, I'm going to teach you the curriculum, but I'm going to hold a night course once a week, and I'll talk about the latest developments.'" The result was a sort of Dead Poets Society, a close-knit group of Waterloo students who spent their evenings learning about the latest developments in string theory—guys like Alain Aspect, who was by then working with crystals to produce entangled photons. "I couldn't believe my ears," Lazaridis says. "We really got turned on during that time."
An idea began to take shape among the group: What if Canada had its own dedicated centre for theoretical physics?
Nearly 20 years later, Lazaridis had amassed a large enough fortune to make it happen. He'd already helped transform this sleepy college town into the nation's largest tech cluster, attracting attention from major U.S. companies. There were dozens of small companies orbiting Lazaridis's mothership, those that were either started by RIM alumni or were dedicated to providing services and applications for the BlackBerry. Now, at last, the stage was set for Lazaridis to help turn Waterloo into one of the premier destinations for future thought in the world.
But what would make the best physicists in the world come to Waterloo? There are no oceans or mountains to gaze at. Income taxes are high, and the weather—well, it's Canada after all. The answer, as hokey as it may seem: If you build it, they will come. "It was the fastest, most affordable, brandable thing we could do," says Lazaridis. "The building is the brand."
In October, 2004, a few dozen scientists and mathematicians moved from a temporary facility in an old post office into the new Perimeter building, which looks like a massive blackboard plunked down in the centre of suburban Waterloo (or maybe it's supposed to mimic the monolith that appears among the apes at the beginning of 2001). Inside, the staff found everything they needed: a peaceful collection of light-filled offices, each equipped with a floor-to-ceiling blackboard; comfortable lounges where groups could meet to hash out solutions; long hallways to roam and courtyards to sit in; and a cozy café.
Meanwhile, across Waterloo's Silver Lake, plans for yet another world-class research facility were unfolding. For a number of years, the University of Waterloo had been trying to get an Institute for Quantum Computing off the ground. Lazaridis was just the guy to make it happen. Unlike Perimeter, a place where mathematicians could operate in the untethered realm of pure thought, the university wanted to provide students and scientists with a facility where they could test some of the quantum predictions being generated at places like the Perimeter Institute.
In 2002, IQC opened in a temporary facility on RIM's main campus, with a modest (by comparison) personal donation of $50 million from Lazaridis and a provincial endowment of $50 million. Thanks largely to Lazaridis, Waterloo is a kind of end-to-end innovation hothouse, from the very conception of theoretical ideas, to experimentation and refinement, culminating with the companies that will one day provide new technologies born from those ideas. But to say Mike Lazaridis is expanding his empire is missing the point. The idea is to apply the same kinds of strategies that have made RIM so successful to the task of expanding our knowledge of the universe. If this happens to spark a quantum leap in technology along the way, well, that's just a bonus.
If there's one area of research Lazaridis is watching, it's quantum computing. All the advances in computing made so far revolve around the digital bit, a tiny electrical pulse that can either be recorded as a one or a zero—a system we know as binary. According to Moore's Law, every two years we'll figure out a way to double the number of transistors on a computer chip. This explains the shrinking nature of your BlackBerry and the fact that Apple now makes a laptop that slides into a manila envelope. The problem is, if Moore's Law is followed to its natural conclusion, in as little as 10 years, those bits we pack into our iPods will be the size of atoms. This is where quantum computing takes over.
Quantum computers employ quantum bits, or qubits, that behave in very strange ways. For starters, unlike bits, they don't have to be recorded as either a one or a zero—they can be both at the same time. So with only 40 or 50 qubits (we're talking the size of molecules), a quantum computer may one day perform the same tasks the world's most powerful machines now perform with hundreds of megabytes. If you could just jam that kind of power into your BlackBerry...who knows what it could do? "Think about the Industrial Revolution," says Raymond Laflamme, director of the IQC and one of the pre-eminent scholars on the matter (he's actually credited with changing Stephen Hawking's mind about the nature of time). "Suddenly, people see steam and they are able to harness it, control it and make machines. Locomotives changed the landscape of cities and, at the same time, the fabric of society itself...when we think of quantum computing, that's the vision we have," says Laflamme.
It's a tall promise, and one that is unlikely to pay off—at least in any tangible, commercial sense—in Lazaridis's lifetime. But for him, when those results happen is irrelevant. Rather, it's about providing a solid foundation for a future generation of innovators. And it's about faith.
"If I were to say, 'Tell me right now what this stuff is going to be used for in the future before I give you another dime,' that would be the biggest mistake I could ever make," says Lazaridis. "You have to remember, it can never be predicted. That's a fact of theoretical physics."