Nothing is older than the argument that large companies can’t capitalize on their innovations. Will this be the company that disproves that?
Moonshots are always one part flight-of-fancy, one part brilliance, and 98 parts risk.
“Eventually you’ll fail to fail.” – X Captain of Moonshots, Astro TellerI grew up in an era of moonshots. Few things in history have been more audacious than sending humans to the moon. The feeling at the time was that it we could that we could do anything. Unfortunately, the euphoria was short-lived. One moonshot did not change the world, there were many, even harder challenges that lay ahead.
So, when Alphabet’s subsidiary X (the same company that owns Google) describes itself as a place dedicated to “moonshots” you can be sure that it will grab my attention.
Google X was established in 2011 as a way to make sure that Google would be able to spawn the next Google, maybe even overtake it. In 2015, along with the restructuring of Alphabet as Google’s parent company, X was spun off as its own entity under Alphabet. Three years later its still not clear if the innovations coming out of X will be able to outdo, or even come close to Google. But they are certainly getting more then a bit of attention.
What Google’s parent, Alphabet, is attempting with projects such as Loon and Wing (see video) is risky and some would say a flight of fancy. One of the perennial and most hotly debated topics in business is whether large companies can innovate at scale, or for that matter, if they should.
History hasn’t been kind to many of Google’s predecessors, such as Xerox, who have tried to capitalize on their inventions. But X is taking a radically different approach which may just become the role model for how innovation can be sustained in a large, bureaucratic, self-serving, corporate structure.
However, it’s certainly not the first time a company has tried to build an in-house innovation capability to fuel its growth.
A Bright Idea
Just 12 years after its formation in 1982, and born of Edison’s light bulb, GE put in place its first R&D center in Schenectady, New York, spearheaded by another great inventor, Charles P. Steinmetz. Over the next two decades GE built its research lab into a powerhouse of talented scientists and engineers. It was a centralized and highly coordinated function within GE, and it was also the role model for virtually every other major organization of the day. Companies from around the globe sent their brightest talent to GE to find out how a lab should be set up and run.
The result was a century of nearly identical research labs fashioned after the classic Edison model. The model worked well. It built much of the 20th Century, from transportation to telecommunication, the transistor to the PC. In some ways it still works. You’d be hard pressed to find a tech company without an R&D function. But it also pigeonholed the idea of innovation as something that resided strictly within the R&D function of an organization.
What’s wrong with that? Well, if high-powered R&D is the source of new ideas, then Google, Facebook, Amazon, Netflix, Apple, Tesla, Uber, and myriad other disruptive companies all should have been invented by incumbents. None were! Yes, they all stood on the shoulders of vast research efforts before them. For instance, in the case of search, there were no less than 30 text retrieval vendors in the 1990s. Some of the leading ones, such as Basis and Verity came directly out of Battle labs and well funded research from the Intelligence community. But Google was not one of the 30.
So, why aren’t the incumbents typically the ones who capitalize on great ideas? It’s not that R&D is dead. Far from it. We still need smart people in medicine, engineering, and science to help solve many of the complex problems facing the world. But R&D will always focus on what’s best for the company which it’s part of.Loon and Wing. See also "Managing the Curb: Alphabet Has A Company For That (GOOG)":
The challenge is not to move away from R&D but rather to expand the notion of what R&D is and what it applies to, and, in the process, to create a new role model for research that pursues outlier ideas that can come from anywhere in the global braintrust that we are finally able to tap into, en masse, courtesy of the Internet.
Eagles Soar. Ostriches Kick (really hard)
Still, I’ve often wondered if the role of large companies isn’t to innovate but simply to scale innovation while entrepreneurs and small companies, without a legacy to protect, are left to the task of coming up with the disruptive innovation....MUCH MORE
...I'm beginning to believe that the thinking behindPreviously on Astro Teller:
Google'sAlphabet's corporate naming strategy is to make mentioning them so awkward—Coord, really?—that people just stop talking about them and they are free to go on their merry way to world domination.
I do like Waymo—as in "Kids should have waymo autonomy"—though....
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