Daniel Colbert in his article says that Nanotechnology is not an industry. He says
" Materials companies have traditionally been low margin, quick to commoditize and generally lacking pizzazz. These are not favored characteristics of venture-financed companies."

I beg to differ:

After reading the book “The next big thing is really small”, I did feel overawed by the range of applications that nano materials can be used. But that doesn’t mean commercial apps (scalable) are eons away.Even though the author says materials are low margin products , which might be shunned by VC’s, I think the following aspects can make a nanotech company fundable from a VC Point of view

1. There are some nano materials which can self replicate and hence the cost of scaling is significantly reduced
2. The notion of low entry barriers is only a myth. In a field where one will find atleast a scientist playing the role of the CEO or the founder, in such a knowledge intensive field, the knowledge itself will serve as the entry barrier. A patented way to produce smart materials will serve as a entry barrier for the initial period of time. Ofcourse the team and the management will obviously will be considerable factors for VC funding.
3. Identifying the applications where nano materials can make a significant impact before the materials become commoditized(if at all). Its like building a company to sell.

I feel the problem with the commercializing of materials is not related to scalability of the products, but related to identifying those 20 % of areas where nano materials can give 80% of benefits. If the initial materials are deployed in not-so-profitable areas, the whole funding wagon from various sources can come to a halt , which is quite worrisome for the future developments of this field.

Link :Small Times: News about MEMS, Nanotechnology and Microsystems