Smartcuts: The Breakthrough Power of Lateral Thinking

by Shane Snow

they could produce each unit: $25. One thousand times less than the cost of a NICU incubator.

Let’s step back for a moment and talk about innovation. Over the last several years, we’ve bastardized the word. Today, we equate it with change or general improvement, a buzzword meaning “bigger” or a synonym for creative. But the word used to mean “upheaval” or “transformation.” It comes from the Latin innovare, in meaning “into” and novus meaning “new”; the word innovate in Middle English meant to “renew” or “refresh.” Innovation is about doing something differently, rather than creating something from nothing (invention) or doing the same thing better (improvement). Harvard management professor Clayton M. Christensen furthered this concept in the mid-’90s when he coined the term “disruptive innovation.” Disruptive innovation is when the introduction of a lower-cost product steals market share from existing players, like when e-mail usurped postal mail (how much would you spend a month if every e-mail cost the price of a postage stamp?) or when Craigslist replaced costly classified newspaper ads with free Internet listings. The key feature of disruptively innovative products is cost savings (either time or money). But the key ingredient behind the scenes of every disruptive product is simplification. E-mail is not just cheaper, but simpler than postal mail. USB flash drives were not just less expensive than compact discs, but simpler to use. And cloud storage became even simpler than flash. Automobiles won out over horse-and-carriage because they made transportation sim...

He leveraged his Gizmodo cred (Frank Sinatra style!) to launch a small website called TheWirecutter, a gadget-review site that takes simplicity seriously. If you want to know which type of wireless speakers to buy, a typical blog—or store—will show you scads of options. Brands. Versions. Specs. Upgrades. Pros and cons. Features! Benefits! STRESS! Blam will simply tell you that Logitech’s UE Mini Boom speakers are the best. And then he’ll go surfing. Rather than worrying about inventories and shipping and cost-of-goods-sold and all the other headaches of a typical electronics business, his website sends you to Amazon. When you buy those Mini Boom speakers there (as I recently did), TheWirecutter gets a small kickback. With simplified costs and no full-time employees, Blam was soon working one day a week, living in paradise, and making more money than he ever did at Gizmodo. Most important, he was a lot happier.

Apparently, patience and willpower, even creativity, are exhaustible resources. That’s why so many busy and powerful people practice mind-clearing meditation and stick to rigid daily routines: to minimize distractions and maximize good decision making.

Apple’s iPod won the MP3 player war with breakthrough simplicity, both in physical design and how the company explained it. While other companies touted “4 Gigabytes and a 0.5 Gigahertz processor!” Apple simply said, “1,000 songs in your pocket.”

Here’s a fact: Creativity comes easier within constraints.

Constraints make the haiku one of the world’s most moving poetic forms. They give us boundaries that direct our focus and allow us to be more creative. This is, coincidentally, why tiny startup companies frequently come up with breakthrough ideas. They start with so few resources that they’re forced to come up with simplifying solutions.

In Finland, on the other hand, there are no school sports teams. As sad as that may sound to those of us who grew up cheering on the football team, the lack of in-school athletics allowed Finland to focus minds and resources and sprint forward academically. Kids can play intramural sports on their own and on the weekends, but they go to school to learn. Classes were small, yes. But more interestingly, students often had the same teachers for several years in a row, developing rapport and allowing teachers to focus heavily on individual students’ needs. Students start learning vocations like engineering and business as soon as they hit high school. They skip many of the general education courses most of us forget. And they actually like school.

Perhaps that’s why Steve Jobs referred to simplicity as “the ultimate sophistication.”

Musk figured a first-class noticer could build those components himself—a generic acetaminophen to Boeing’s Tylenol—and perhaps even improve upon them. Musk built a factory designed to input aluminum and spit out rocket parts. Rather than paying NASA prices for engine nozzles and manifolds and heat shields, SpaceX manufactured its own at a fraction of the cost. The happy side-benefit of this was greater control over inventory, as aerospace delivery times for parts from manufacturers were notoriously bad. Next, Musk sought simplification. He reduced complexity by making the various stages of his rocket the same diameter, with the same engines. Whereas most rockets used fuel tanks of diminishing fatness (the Shuttle, for example, had two small boosters and one big booster, which required different tools, parts, and procedures to build and maintain), Falcon’s two stages could be built with the same jigs and tooling, the same electronics, and the same engineers. The strategy lowered costs, says Musk, “by at least a factor of two, and perhaps as much as three or four compared to similar vehicles elsewhere. This came despite the conventional wisdom in the space industry, academia, etc., that rocket costs couldn’t be reduced by more than a few percent.”

Musk realized that in order to gain support for his big vision, he would himself have to step into the public spotlight. In other words, he had to get people to believe. So the geek brushed up on speaking skills and started talking big. This-is-the-future-of-mankind big. He did television appearances and magazine interviews. He told the world he was going to die on Mars. Musk isn’t the first in history to use over-the-top demonstration to create buzz, and therefore harnessable momentum. Pop star Lady Gaga gained unprecedented support for her music and mission to “foster a more accepting society” through the stir generated by her outrageous costumes and music videos. Being hoisted into the 2011 Grammy Awards inside a giant egg, then hatching on stage wasn’t eccentricism, it was brilliant marketing. Twenty-four million albums later, it’s clear such artistic brinkmanship worked. Energy-drink maker Red Bull spurred enormous word-of-mouth when it sent daredevil Felix Baumgartner to the edge of space in a balloon, then recorded his supersonic freefall. His skydive broke the record for first human body to break the speed of sound, and the highest freefall distance (127,852 feet). Creating your own wave and then catching it is as old as ancient Greece: Alexander III rallied the Macedonians with his hyperbolic quest to reach the “ends of the world and the Great Outer Sea,” conquering the entire Persian Empire along the way. Of course, such spotlight-snatching only produces real mom...

“A lot of people start companies and say, ‘Hey, I’m gonna make a billion dollars,’ and that’s fine,” Grammatis told me. “I’m gonna connect the entire human race to the internet.” In 2010 only 2 billion of earth’s 7 billion people had Internet access. “The Internet taught me nearly everything I know,” Grammatis wrote in a personal manifesto. “It is the modern-day equivalent of the library of Alexandria, except it’s much harder to burn to the ground. It is indispensible for realizing human rights, combating inequality, accelerating development, and quickening the pace of human progress.” He theorized that information access would be the fastest route to world peace.

If you think “I’m gonna connect the entire human race to the Internet” sounds crazy, you’re right. When you realize that he may have already done it for half a million people before age 30, Grammatis’s story becomes a mini case study of the smartcut that makes Elon Musk world class. It’s called “10x Thinking.” 10x Thinking is the art of the extremely big swing. To use a baseball analogy: instead of trying to get on base—or even aiming for a home run—it’s trying to hit the ball into the next town. No amount of weight lifting or swing practice will get you there. Such a goal requires you to think radically different. The apostle of 10x Thinking is a man with perhaps the coolest name ever: Astro Teller. Teller is the goatee-and-ponytailed head of a rather secret Google laboratory in California called Google[x]. He holds a PhD in artificial intelligence. Teller’s job is to dream big. 10x big.

The secret sounds a bit crazy. Says Teller, “It’s often easier to make something 10 times better than it is to make it 10 percent better.” Hmm. Math would seem to suggest otherwise. Let’s let the man named Astro explain himself: “The way of going about trying to make something new or better often tends to polarize into one of two styles,” Teller says. “One is the low-variance, no surprises version of improvement. The production model, if you will. You tend to get ‘10 percent,’ in order of magnitude, kind of improvements.” “In order to get really big improvements, you usually have to start over in one or more ways. You have to break some of the basic assumptions and, of course, you can’t know ahead of time. It’s by definition counterintuitive.” Incremental progress, he says, depends on working harder. More resources, more effort. 10x progress is built on bravery and creativity instead. Working smarter. In other words, 10x goals force you to come up with smartcuts. “I joke that this is a moon-shot factory,” Teller says, of Google[x]. “Our belief is that if you can get people to let go of their fear, and to be more intellectually open, intellectually honest, more dispassionate about being creative, trying new things, and then being honest about what the results are instead of having all these other issues cloud their judgment, you can get to radically better solutions in honestly about the same amount of time, about the same amount of resources, as making the 10-percent impro...