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by
Safi Bahcall
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July 20 - September 17, 2019
With P-type loonshots, people say, “There’s no way that could ever work” or “There’s no way that will ever catch on.” And then it does.
With S-type loonshots, people say, “There’s no way that could ever make money.” And then it does.
Deaths from P-type loonshots tend to be quick and dramatic. A flashy new technology appears (streaming video), it quickly displaces what came before (rentals), champions emerge (Netflix, Amazon), and the old guard crumbles (Blockbuster).
Deaths from S-type loonshots tend to be more gradual and less obvious. It took three decades for Walmart to dominate retail and variety stores to fade away. And no one could quite figure out what Walmart was doing, or why it kept winning.
S-type loonshots are so difficult to spot and understand, even in hindsight, because they are so often masked by the complex behav...
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learning to nurture the more subtle S-type loonshots—not just the shiny P-type loonshots—matters.
If you are an industry challenger, learning how to be good at both can help you defeat bigger, stronger competitors, like a middleweight firing off a surprising left hook to knock out a heavyweight.
if you are an astonishingly successful innovator, if you have built a wondrous empire, you need to learn how to watch your blind side—how to spot the loonshots blazing right toward you.
P-type loonshots feed a growing franchise, which feeds more P-type loonshots. And as the momentum builds, so does the tunnel vision: keep turning the wheel, faster and faster.
When ideas advance only at the pleasure of a holy leader—rather than the balanced exchange of ideas and feedback between soldiers in the field and creatives at the bench selecting loonshots on merit—that is exactly when teams and companies get trapped. The leader raises his staff and parts the seas to make way for the chosen loonshot.
The all-powerful leader begins acting for love of loonshots rather than strength of strategy.
“Do not undertake a program unless the goal is manifestly important and its achievement nearly impossible.”
He was a perfectionist, according to a colleague, “but not one of those that irritate.”
(At its peak, in 1953, Polaroid was making six million pairs of 3D glasses per week.)
decades before the idea became popular, both Kennedy and Land understood that diversity enhanced creativity.
A few years later he used this motion-picture instrument to produce the first American short films. (The shorts included cats in a boxing ring, establishing an enduring principle of human nature: cat videos are always funny.)
To them, the idea of filmless digital photography, using a CCD chip, was too far-fetched, too uncertain. Too much of a loonshot.
At a meeting of the president’s intelligence advisory board in April 1971, Land addressed the president directly. He told Nixon that the film-scanner idea was a “cautious step” and that digital technology was a “quantum jump which would give the US an unquestioned technological lead in this field.”
Land, Trippe, and Jobs were all master P-type innovators who never lost their hunger, their taste for bold, risky projects. Their Goliaths disappeared (or nearly disappeared, in the case of Jobs) because all three followed the same pattern into the same trap.
Unlike Bush and Vail, who saw their role as gardeners tending to the touch and balance between loonshots and franchises, encouraging transfer and exchange, those three master P-type innovators saw themselves as Moses, raising their staffs, anointing the chosen loonshot. In other words, they failed on Bush-Vail rule #2: dynamic equilibrium.
Even more dangerous to the company’s future than its string of failures, however, was its string of exits. A stream of departing employees signals serious dysfunction.
Loving your loonshot and franchise groups equally, however, requires overcoming natural preferences. Artists tend to favor artists. Soldiers tend to favor soldiers.
Hooke suggested to Newton how gravity can explain planetary motion. Hooke’s suggestions launched Newton on the path to his masterpiece, Principia. Although Hooke suggested some of the initial ideas, he did not have the skills to create a complete system. Newton did. Newton was a great synthesizer, just as Jobs was a great synthesizer.
Jobs brought together design, marketing, and technology into a coherent whole, as few others could do. But he was missing a key ingredient. Like Land before him, who brought similar skills
Franchise projects are easier to understand than loonshots, easier to quantify, and easier to sell up the chain of command in large companies. The challenge for these sequels and follow-ons is not in making it through the long dark tunnel of skepticism and uncertainty. Their challenge is in exceeding what came before.
the most interesting lesson that was readily visible at Pixar, key to escaping the Moses Trap, was the difference between two ways of leading, which I’ll call system mindset and outcome mindset.
A failed outcome, for example, does not necessarily mean the decision or decision process behind it was bad. There are good decisions with bad outcomes. Those are intelligent risks, well taken, that didn’t play out.
probing wins, critically, is as important, if not more so, as probing losses. Failing to analyze wins can reinforce a bad process or strategy.
Catmull saw his job as minding the system rather than managing the projects.
He had learned to be a gardener nurturing loonshots, rather than a Moses commanding them.
“Some companies are the equivalent of an innovation landfill,” wrote one senior Apple executive, who helped lure some of PARC’s best engineers to Apple. “They are garbage dumps where great ideas go to die. At PARC, the key development people kept leaving because they never saw their products get into the market.”
the weak link is not the supply of ideas. It is the transfer to the field. And underlying that weak link is structure—the design of the system—rather than the people or the culture.
The stories in part one illustrate the first three Bush-Vail rules: 1. Separate the phases • Separate your artists and soldiers • Tailor the tools to the phase • Watch your blind side: nurture both types of loonshots (product and strategy) 2. Create dynamic equilibrium • Love your artists and soldiers equally • Manage the transfer, not the technology: be a gardener, not a Moses • Appoint, and train, project champions to bridge the divide 3. Spread a system mindset • Keep asking why the organization made the choices that it did • Keep asking how the decision-making process can be improved •
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analyzing markets except for the “notably rare exceptions” of bubbles and crashes is like analyzing the weather except for storms and droughts.
