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1-Page Summary of Loonshots

Overview

Your products and services are doing fine. You don’t need to change anything, but you still have crazy ideas about how to make them even better. What if you actually tried those ideas instead of shutting them down?

In “Loonshots,” author Safi Bahcall explains how governments and companies can benefit from exploring ideas that, at first glance, seem too far-fetched or expensive to work. Unlike moonshots, which are enterprising projects with a projected end goal of success, loonshots are dismissed as being too difficult or ridiculous for the general public to accept. Those who promote loonshots often find themselves ignored because their ideas don’t fit into the norm. However, when one survives long enough to be tested in real life situations and is found successful enough to make a difference in some way, it can truly change norms within an organization.

Companies should be willing to take a risk on loonshots. They could end up failing, but the benefits of success outweigh that possibility. To offset losses from failed loonshots, companies can pursue franchise products as well. By doing so, they’ll benefit from both innovation and consumer trends in the market.

Loonshoots are more easily taken on by smaller companies, since they’re more fluid. Larger companies are better suited to franchises, since their structures are solidified and can be expanded upon. A company should balance these two types of work in order to achieve dynamic equilibrium—a state where innovators and franchise-based teams can coexist at the same organization without drifting apart.

All companies go through a phase transition. As they grow, they become more franchise-minded and less likely to create loonshots. However, if the company understands what causes that change in behavior, then it can take steps to prevent creative stagnation by dividing employees into smaller departments and rewarding their progress with promotions.

Businesses often think of loonshots as disruptive technologies. However, a disruptive technology is not necessarily the same thing as a loonshot. A product’s ability to disrupt or change the status quo can only be determined in hindsight, whereas loonshots are identified while their future viability is still in doubt. Instead of looking for products that could cause upheaval in the market, companies should look for ways to solve problems that they didn’t know existed before. By finding employees who are willing to explore new ideas and promote popular ones at the same time, businesses can remain on top without sacrificing their appeal to mainstream consumers.

Key Point 1: Loonshots can be divided into two categories: product breakthroughs and strategy breakthroughs.

Although all loonshots are fragile, some loonshots focus on different types of breakthroughs. Some P-type (product) loonshots don’t believe they’ll ever be viable financially or commercially because the product is too difficult to create. For example, the first telephone was considered useless and a technological marvel in its time because it wasn’t strong enough to carry a signal long distances. It took Theodore Vail’s leadership at AT&T to make phones popular by creating one that could reach someone across the country from another phone in New York City.

There are two types of loonshots: S-type and R-type. The R-type focuses on product innovation, while the S-type focuses on strategy. Facebook was an example of an S-loonshot because it made money off social media, which others dismissed as a viable business model. Walmart was also an S-loonshot in its early days when it focused on rural areas rather than big cities where most department stores were located at that time.