A Product Market Fit Show | Startup Podcast for Founders
00:01:52 · Astro Teller
[00:01:52] S0: Well, I mean, I was a serial tech entrepreneur before I became the co-founder and now the leader of X. The Moonshot Factory here at Alphabet. Before that, I did a PhD in artificial intelligence a long time ago. So I'm slightly academic. I'm a dyed in the wool entrepreneur. I've done quite a few things over the last sixteen years here as the captain of Moonshots, at the Moonshot Factory here at Alphabet. So I'm not sure I would describe myself as a nurturer of moonshots and moonshot takers. I'll start here, taking moonshots is really easy, super easy. If you don't care about efficiency, you find really high energy people who think they're right and are pretty smart. You dump a bunch of money on them and you'll get some moonshots, or anyway, some fairly big companies anyway. It's just not an efficient process and so, what I was somewhat interested in almost since I was a kid but which I've become obsessed with over the last twenty years, is how do you systematize radical innovation? And so what the Moonshot Factory is, is an attempt to explore these over the horizon sort of radical innovation things. That if they turned out to be as good as they seem on the surface, you could turn them into enduring businesses that are really good for the world. But shooting for that kind of thing, mostly the answer is nope, not now, can't be done at all, you can do it but you can't do it profitably, the world doesn't want it, whatever that is. So how do you figure out the one or two percent of the things that you start, that will be once in a generation opportunities for the world and for your investor? In this case, Alphabet is our investor, and how to do that as efficiently as possible. That's really where the Moonshot Factory is coming from.
00:03:46 · Pablo Srugo
[00:03:46] S2: And I think that's the key difference that I was pointing out. Which is most of these classical founders, they have one idea, one moonshot, and they're kind of all in on that thing. And that's the thing they're going to do. Maybe they pivot once or twice, but that's really the company. Your setup is different by design, where you're constantly coming up with new moonshots, trying them out, testing them out, and it's a system to create these outputs. Maybe tell me a little bit more just about the setup of Moonshot Factory. How it's all set up, maybe a little bit of the origin story, just to get us enough of an understanding of the situation and then we're going to go deep on the process that you were just alluding to.
00:04:19 · Astro Teller
[00:04:19] S0: Sure, so we were set up 16 years ago and we were set up because Google at the time was already starting to imagine Alphabet. Though Alphabet hadn't been named and so the desire was for there to be a kind of 21st century Bell Labs. That would park itself next to Google, not solve Google's problems. There are a lot of smart people at Google solving Google's problems. But to go find really new problems for this thing, which ended up being called Alphabet, the parent company of Google. To have, and then hopefully to solve some of those problems. Now, out of this process sometimes we come up with something. Google Brain is the most famous example, where we started and then it turns out to be so important to Google that we move it back to Google. And of course we can be proud of doing that. It's not an independent business, but it's been profoundly important for Alphabet, for the world. Sometimes we make something and we set it up as a separate business inside of Alphabet. Many of your listeners will know about Waymo, the self-driving cars, they came from X, or Wing, the drones for package delivery. That came from X, and so we have set up a number of businesses. Which are these sort of independent entities, but that are still inside the Alphabet umbrella and then increasingly frequently, when it makes sense, we create one of these moonshots when it's ready to graduate from X as an independent business. If Alphabet owns forty nine percent of that thing and doesn't have a board seat, then they're off to the races. We can cheer for them. They're still able to be very strategically involved with Alphabet, but they're in a really independent company at that point and so our job is to try one thousand, maybe fifteen hundred ideas per decade.
00:06:10 · Pablo Srugo, Astro Teller
[00:06:10] S2: Crazy. [00:06:10] S0: And if we get a couple Google Brains or Waymos or Wings per decade, especially if we're really efficient at throwing most of those ideas away early. Then this is really good for our investor Alphabet and really good for the world. [00:06:26] S2: Completely agree and any of those businesses, Google Brain, Waymo. I mean, these are businesses that are once in a generation type businesses. Just about any founder that I know would be more excited to have one of those, let alone multiple of them. What I want to talk to you about is, when I graduated university, I wanted to be a founder, I wanted to be an entrepreneur and frankly, being honest here. The thing I struggled with most was, especially at the beginning. How do I come up with a great idea? How do you actually do that? And now, I've spoken to many founders, and there's many. You know, you've got your classic, I felt a problem myself, I went and fixed it, it just kind of happened. You know, maybe Shopify was built that way. You've got the other ones that are even more serendipitous than that. Facebook is just, I'm building stuff, I'm having fun, I'm having a good time, something clicks and I'm just going to chase that, and execute on it. But when you're going to sit down and you're going to say, I'm going to create a Moonshot deliberately. That just feels harder to me, and I'd love to explore what happens behind the scenes to make that happen.
00:06:26 · Pablo Srugo, Astro Teller
[00:06:26] S2: Completely agree and any of those businesses, Google Brain, Waymo. I mean, these are businesses that are once in a generation type businesses. Just about any founder that I know would be more excited to have one of those, let alone multiple of them. What I want to talk to you about is, when I graduated university, I wanted to be a founder, I wanted to be an entrepreneur and frankly, being honest here. The thing I struggled with most was, especially at the beginning. How do I come up with a great idea? How do you actually do that? And now, I've spoken to many founders, and there's many. You know, you've got your classic, I felt a problem myself, I went and fixed it, it just kind of happened. You know, maybe Shopify was built that way. You've got the other ones that are even more serendipitous than that. Facebook is just, I'm building stuff, I'm having fun, I'm having a good time, something clicks and I'm just going to chase that, and execute on it. But when you're going to sit down and you're going to say, I'm going to create a Moonshot deliberately. That just feels harder to me, and I'd love to explore what happens behind the scenes to make that happen. [00:07:21] S0: Yeah, so I'm going to pretend that I'm recruiting you to come to X, because I think that'll help. You don't actually have to quit your job, though maybe you will. It's happened before. [00:07:31] S2: Maybe I will, yeah.
00:07:33 · Astro Teller
[00:07:33] S0: But pretend that we were in this dialogue. You're a founder and you're thinking of coming to X, but you kind of want to know, what am I signing up for here? So one of the fundamental things I would want you to know is, if you have something you just really believe in, please do not come to X. I would analogize that, I know this doesn't sound super friendly. If you want to go to Vegas and you just believe that seventeen is your lucky number, and you want to bet on seventeen on the roulette wheel. Okay, more power to you, I guess, and it might come up seventeen. And you'll make a lot of money. So I'm not saying no, I'm just, but I'm telling you for sure, that's not what happens at X. At X, we're trying to be the card counters of innovation. So it is a very different process. If you come to X, I want you to work on making a moonshot. But I also want you to understand you will be wrong over and over and over again. What I owe you, what all of X owes you, if you're going to join us, is that we have to be serious about not punishing you when you're wrong. That as long as you're pursuing potential moonshots in really smart, scrappy ways and being intellectually honest about how it's going. If the answer is nope, this is not pulling our average up, let's just put a bullet in its head and move on. Bad news, you get no equity while you're here at X. But the good news is you haven't bet your kid's college fund on the teleporter. So if the teleporter turns out not to be the right thing for us to do, and we're actually going to celebrate you for stopping it. Because you're being intellectually honest, you just get to try again and maybe the time machine will work out if that's the next project that you try. So if it appeals to you to be more of a card counter, to be part of a process with zero friction and high flow. Where we're collectively exploring which of the things that we're currently looking at might be a Waymo, might be a Google Brain. If that excites you, come here and do it and the amazing news is at the end of, you might try several, they fail. Finally you try one and it actually gets all the way through X. You graduate, we give that team founders shares. A lot of the company goes to them, and you took no risk the whole time while you were doing it.