This is a book summary of the business strategy novel, “Loonshots” by Safi Bahcall. In this book she discusses the importance of disruption and how to build businesses that are nimble enough to take advantage herculean tasks.
Loonshots is a book that talks about the idea of “loonshots” which are ideas that have a chance at changing the world. It’s written by Safi Bahcall, who is an entrepreneur and investor.
Are you seeking for a synopsis of Safi Bahcall’s novel Loonshots? You’ve arrived to the correct location.
After reading Safi Bahcall’s book, I wrote down a few significant takeaways.
If you don’t have time, you don’t have to read the whole book. This book synopsis gives you a quick rundown of all you can take away from it.
Let’s get this party started right now.
I’ll go through the following subjects in this Loonshots: How to Nurture the Crazy Ideas That Win Wars, Cure Diseases, and Transform Industries book summary:
What is the purpose of Loonshots?
Safi Bahcall delves into a topic that is critical for both the success of the US military and the success of firms slugging it out on a metaphorical battlefield in his book Loonshots.
He demonstrates through a variety of historical examples that ground-breaking discoveries and innovations are the outcome of groups that nurture creative thought, not of solitary geniuses plowing their own furrows.
Who is the Loonshots Author?
Safi Bahcall is a scientist who is also a bioentrepreneur. After getting his PhD from Stanford in 1995, he continued his academic career as a Miller Fellow in physics at UC Berkeley. After three years with the consulting firm McKinsey, he founded Synta Pharmaceuticals, which focuses in the discovery of innovative cancer treatments. Loonshots, Bahcall’s first book, has been lauded as a must-read by the Washington Post and Business Insider.
For Whom Are Loonshots Intended?
Reading Loonshots is not for everyone. It could be perfect for you if you are one of the following categories of people:
- Inventors with outlandish ideas that may or may not work
- Managers who are battling to maintain their businesses competitive
- Whoever wonders how the Allies were able to win World War Two should read this.
Summary of the Book Loonshots
Introduction
What do Renaissance astronomers monitoring the motion of the planets, military strategists battling Hitler’s U-boats, and American airlines adapting to the newly deregulated market have in common? Their success was due to their pursuit of outlandish ideas — that is, ideas that look absurd until they become unimaginable at the time.
For every world-changing concept, there are dozens – if not hundreds or thousands – of ideas that don’t work out. Failure, according to Thomas Edison, is the yardstick by which progress is measured: each loss eliminates one alternative and puts you closer to the answer.
This is why doing experiments is so important. True advancement, on the other hand, is expensive, time-consuming, and ultimately dangerous.
Those three words terrify risk-averse and efficiency-maximizing businesses focused on the bottom line. As a result, they often miss out on the next great thing. But what options do they have?
By reading this book, you’ll discover that there is a method to strike a balance between innovation and what the author, Safi Bahcall, refers to as franchising – retaining an organization’s existing effective elements. The key to keeping the two activities distinct is to provide creatives with safe, protective surroundings in which to explore their ideas. Consider it a nursery for loonshots.
Lesson 1: Organizational success depends on innovation, which must be cultivated.
Innovation takes time, effort, and money. Before a great concept succeeds, it must fail a thousand times. However, it is a truth that many organizations abandon ground-breaking initiatives before they even begin. In the end, what was intended to be the next big thing turns out to be a pipe dream. Essentially, they neglect to foster ideas that seem to be completely out of control until they flip the world upside down.
What is the most effective strategy to promote innovation? It’s been suggested that it has something to do with culture, or the unwritten standards that govern corporate conduct. However, this reasoning is incorrect. Take the case of Nokia. Finnish multinationals saw a boom from the 1970s until the early 2000s. It became one of Europe’s most lucrative enterprises because to its inventions, which included the world’s first cellular network, vehicle phone, all-network analog phone, and GSM phone.
The company’s success, according to analysts, is related to its culture. Nokia’s egalitarian spirit, according to BusinessWeek, may be ascribed to its workers’ propensity to have fun and go outside the box. This was less true in 2004. Internally, nothing had changed.
The engineers behind all those successes had just reached a fresh eureka moment: an internet-ready touchscreen phone with a cutting-edge camera and an accompanying online app store. Nokia’s management, on the other hand, turned it down. Steve Jobs debuted the iPhone three years later. As they say, the rest is history.
What went wrong? Nokia’s organizational structure has evolved. Growth is generally accompanied by structural changes. Employees have a lot riding on a firm’s success: if a biotech company develops a miracle cure, everyone engaged will not only be very wealthy, but also heroes! Failure, on the other hand, would result in their dismissal. Perks like titles and promotions don’t signify much in this free-flowing, high-stakes workplace.
As a company grows, it undergoes changes. Individuals’ investment in initiatives decreases as the incentives become more appealing. As a consequence, firms adopt a cautious approach, focusing on safeguarding the portions of their operations that are currently profitable.
What’s the end result? Nokia’s prototype iPhone is seen as an unacceptably high risk by decision-makers, forcing innovation to suffer. However, this isn’t a natural rule; companies may create frameworks that encourage creativity. Let’s have a look at how.
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Lesson 2: Because it had not fostered innovation, the US military was unprepared for WWII.
It was the Allies’ century-defining triumph over Nazi Germany. Hitler would have had a greater chance of winning if there had been prediction markets in 1939. Why is that? The drive to build more effective weaponry was dubbed the “secret war” by Churchill, and the Allies fell behind in this race.
They didn’t fail because of a lack of expertise. Even before entering World War Two, the United States owned the secret to winning future epic aerial and naval engagements – they simply didn’t realize it. Unlike their Axis adversaries, the Allies did not encourage breakthroughs.
One example is radar. Hoyt Taylor and Leo Young discovered in 1922 that when a ship passes between a radio transmitter and receiver, the signal power doubles. If the intensity of the signal you’re getting varies, you may determine a hostile ship is moving.
Taylor and Young reported their results to the US Navy, which had the potential to change naval combat forever. What was the response? Nothing!
Young experimented with radio waves for another eight years. He noticed that sending radio signals into the sky had the same effect: they were doubled when they struck passing aircraft and returned to earth.
That worked on aircraft flying up to 8,000 feet in the air, which is incredible. Young wrote to the US military, requesting a $5,000 funding to further explore his prototype for an early warning system for hostile aircraft. The request was turned down.
Projects that were not projected to provide benefits for at least two or three years, according to military strategists, were not worth their time. They risked after Young’s loonshot thawed, but the wait was disastrous. On December 7, 1941, 353 Japanese bombers conducted a surprise assault on the naval base at Pearl Harbor in Hawaii, while the warning system was being tested. The raid resulted in the loss of hundreds of planes and warships. There were 2,403 military men killed in all.
A startling lesson about complacency and the cost of not pursuing innovation was taught. The man who pioneered an altogether new method to military strategy, Vannevar Bush, took it to heart in the following chapter.
Lesson 3: Vandevar Bush established a framework that encouraged innovation and helped the Allies win the war.
So, what did military strategists do that was so crucial that they couldn’t afford to invest on radar research? They were operating a typical franchise business, producing ever-increasing numbers of conventional weaponry. Some generals felt that with today’s weaponry – soldiers, cannon, and bayonets – they could win tomorrow’s battles.
While working with the US Navy after World War I, Vannevar Bush observed this mindset. Nothing, in his opinion, was more detrimental to the nation’s long-term interests. What was his response?
Within a military research department managed by non-military persons, he was free to examine the apparently unusual as he liked. In June 1940, President Roosevelt met with Bush and received what he wanted: a new, civilian-led institution known as the Office for Scientific Research and Development (OSRD).
Bush came up with the bright notion of changing the military’s structure but not its conservative culture. The generals were allowed to concentrate on what they were strong at: marshaling the ranks and fighting for what was right by creating the OSRD as a distinct department.
The plan was successful. By the end of 1940, 19 industrial laboratories and 32 university institutions had undertaken research on behalf of the OSRD. It had also employed Alfred Lee Loomis, an eccentric investment banker who dabbled in technological development.
Exiled European scientists, including Albert Einstein, who had paid a visit to Looomis’ secret laboratory, informed him about Germany’s alarmingly sophisticated weapons development projects. As soon as Bush summoned him, he assembled a top-notch team of engineers and physicists to assist the Allies in catching up.
What is their goal? It is planned to construct a portable radar system based on microwave, a radio frequency capable of producing pictures so exact that minuscule objects such as submarine periscopes may be identified.
One of America’s biggest logistical challenges during the conflict with Germany was keeping supply lines open across the Atlantic. Submarines repeatedly targeted Allied convoy ships, resulting in the loss of 4.3 million tons of cargo in 1941 alone. Each month in 1943, 514,000 tons of cargo were lost.
Only 22,000 tons a month were lost as a consequence of microwave radar between March and June of that year. Germany “lost the Battle of the Atlantic,” according to German Admiral Karl Dönitz.
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Lesson 4: Loonshots are good for more than just winning battles; they’re also good for business.
After concentrating all of his efforts on franchising and forsaking innovation, Vannevar Bush salvaged a huge corporation from extinction. It’s not only about winning battles when it comes to developing loonshots; it’s also vital for commercial success.
Let’s take it from Theodore Vail, a pioneer in the boardroom who did for a telecommunications giant what Bush did for the US military. Before we get there, let’s go back a little bit. A.T.&T, which is also known as AT&T, was purchased by financier JP Morgan in 1907.
Despite its illustrious past, AT&T’s future was less certain, despite its direct decendancy from the very first phone company. Thousands of competitors had eaten into the phone’s margins after the original patent had expired.
Morgan recruited Vail to help him turn things around. Vail boldly claimed shortly after taking office that Americans will soon be allowed to phone everyone in the nation. Long-distance conversations had an unsolvable issue: electric signals diminished as they went over a line, and no one knew why.
When the electron was discovered, quantum mechanics, science’s response to its existence, was still in its infancy. Vail seemed to be on the verge of losing his head in a spectacular fall.
Vail was undeterred, and he created a new department to undertake “fundamental research” with MIT physicist Frank Jewett as its head. A public demonstration of a call from AT&T’s headquarters in New York to its San Francisco headquarters followed eight years later. And that was only the beginning.
Vail’s creation paved the way for a series of remarkable breakthroughs for the next half century. AT&T was responsible for developing the transistor, solar cells, Unix operating system, and C programming language. Its researchers won eight Nobel prizes on the way, and the company became one of the most profitable corporations in the United States!
Here is where our tales converge. When Bush met Jewett during the First World War, he made an indelible effect on him. After the OSRD was founded, Jewett became one of Bush’s first recruits, and his expertise was invaluable to the war effort. In the following chapter, we’ll see how Bush and Vail’s ideas complimented one other and created a model for other companies.
Lesson 5: The Bush-Vail Rules provide a framework for balancing franchising and innovation.
Lone geniuses putting their great ideas into reality are often associated with innovation. The reality is that inventors need a champion to assist them in their endeavors. These loonshot enablers are like meticulous gardeners who make sure the finest ideas take root and grow. As Bush and Vail recognized, this necessitates the application of a few fundamental principles, known as the Bush-Vail Rules.
The first guideline is to keep the soldiers in charge of the highly successful portions of an organization distinct from the artists in charge of the high-risk, early-stage concepts. Soldiers, like military strategists who ignored radar, struggle to see beyond embryonic concepts, and as a result, they typically arrive with warts.
Because products and initiatives must be ready for quick deployment, loonshots that don’t meet the criteria are likely to be buried. Result? Ask the studios that passed on an incoherent screenplay called The Adventures of Luke Starkiller if you want an indicator of Star Wars’ success!
As a result, rule two states that artists and warriors are of equal significance. That was something the corporation had to learn the hard way. The Mac crew was branded “pirates” by Jobs, while the Apple II team, which was working on a less glamourous machine, was labeled “normal Navy.”
Conflicts between the two parties resulted in the demise of both goods and job losses. Twelve years later, he reevaluated his strategy and backed both artists like Jony Ive, who developed the iPhone, and warriors like Tim Cook, who repaired Apple’s financial health.
The third criterion is to function as a liaison between artists and troops rather than trying to direct their work. Bush and Vail did not become engaged in the technical specifics of projects they worked on. They considered their responsibility as controlling the transition from creators to users by managing the weakest link in the chain that leads to breakthroughs.
Consider airplane radar, which is one of OSRD’s most important contributions to the war effort. When it was originally introduced, pilots disregarded it. Why is that? It would be too difficult and fussy to use radar boxes in the midst of an aerial duel. Bush sought a makeover after hearing the complaints. The result was a simpler display, which the pilots really utilized.
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Lesson 6: Businesses that depend primarily on product innovation may face difficulties when their circumstances change.
Until far, we’ve looked at how successful loonshot nurturers have managed to strike a balance between innovation and franchise operations. We’ll look at two types of loonshots in action in this chapter: game-changing goods and inventive tactics.
Where we should start is with product-driven innovation. Pan Am Airlines, more than any other corporation in American commercial history, depended largely on cutting-edge goods. JT Trippe created Pan Am as a taxi service that transported rich Manhattanites to Long Island in the 1920s.
Trippe ran a busy route, but the planes he was flying, which were repurposed World War I planes, only had enough for one passenger. How did he handle it? The engine should be based on cutting-edge French engines, the fuel tank should be relocated to the fuselage’s outside, and a third seat should be installed.
Time and over, he repeated the same tech-driven ruse. Pan Am had become the world’s biggest airline and ushered in the age of affordable mass transportation with the advent of the Jet Age in the 1960s. All of this was explained by the early adoption of new items, particularly new kinds of airplane engines. Pan Am inaugurated their Boeing 747 fleet in 1965, in what was then the world’s biggest corporate contract.
Pan Am thrived until calamity hit. The US government eased airline rules in 1987. For 50 years, a single body had supervised the pricing of everything, from seats to drinks. Prices are now set by the market.
The airline found itself surrounded by rivals that could provide lower tickets and pay their employees much less than it had to before deregulation. Even though Pan Am’s aircraft were the greatest, no one wanted to travel on them. There was no way to back out now. In 1991, the firm went bankrupt.
Other airlines thrived in the new business climate. What was the key to their success? Consider the case of American Airlines. It was more concerned with strategic innovation than with flashy new items. Shortly after deregulation, America’s first two-tier wage structure was implemented.
Employees employed before 1978 kept their former compensation, but those hired after 1978 were assigned to the lower-paying “B scale.” American Airlines was able to acquire new aircraft, expand its operations, and create new employees while keeping on the good side of suspicious unions because to those savings.
To bridge the gap with start-up firms with cheaper overheads but fewer prospects, American took advantage of its scale by cutting personnel expenses.
Lesson 7: Leaders who fail to take a back seat risk leading their organizations into blind alleys.
Organizations lose out on loonshot possibilities for a variety of reasons, but one we haven’t mentioned is domineering executives who will advocate their preferred projects no matter what.
The Moses Trap is when people try to depend on religious leaders. Let’s take a look at one of the twentieth century’s most inventive businesses. Polaroid, which was developed by Edwin Land in 1937, has achieved a number of remarkable improvements in the photographic business. Over the last 30 years, Polaroid has introduced sepia prints, black-and-white prints, automated exposure, instant color printing, the SX-70 all-in-one folding camera, and sonar autofocus.
Polaroid took a wrong turn when Land introduced the Polavision camera in 1977. It was a really amazing piece of technology. Even if it weighed less than an ordinary hardback book, a three-minute film negative might be processed in 90 seconds. Polaroid started mass-producing Polavision cameras, which were recognized as Land’s finest accomplishment.
Why haven’t you heard about Polavision? Consumers were uninterested. It was once prohibitively expensive: in 2018 dollars, the camera cost $2500. The single-use film cassettes, on the other hand, cost just $30 apiece, making normal videotapes and Super 8 film far more accessible. Furthermore, digital cameras, which are the true future product, hit the market immediately after Polavision.
In 1996, Polaroid introduced their first digital camera, a decade after Sony, Canon, and Nikon. According to freshly disclosed US government records, Land knew all about the benefits of digital photography and was important in persuading President Nixon to deploy it for military reasons as early as 1971!
Are you familiar with the Bush-Vail Rules? They were all ignored by Land. He just didn’t care about troops. He was the one in charge of the company’s research laboratories, rather than establishing an atmosphere conducive to the finest ideas. His decisions always came first, even if they were overruled by his team leaders. Film was more essential to Land than cameras.
Land invited a guest to the warehouse where the cameras were housed after the Polavision experiment failed. Land responded by saying he wanted to show everyone a sorrowful image so they could “understand what arrogance looks like.”
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Lesson 8: In the West, the scientific revolution was a stimulus for fast progress.
So far, we’ve looked at organizational internal structures. The goal of this chapter is to zoom out and examine the macroenvironment in which loonshot nurseries work. To get things started, let’s look at Luke Starkiller’s script. The Star Wars series would not have existed in a parallel reality. What was the process through which the phrases “Jedi,” “lightsaber,” and “Sith” came to be associated with the Star Wars universe?
In Hollywood, there were many studios. The scriptwriters simply needed to keep asking until someone said yes to get Star Wars off the ground, as it turned out. This is true for all loonshots. As long as there is another door to knock on, all insane ideas have a chance. This is why the external environment is crucial. The Scientific Revolution, an extreme loonshot, is one of the greatest examples.
Everyone nowadays understands that the universe is controlled by universal natural laws that may be discovered via empirical observation and experiment. Truth, on the other hand, has been defined by governments and religious authority for millennia.
Tycho Brahe, a sixteenth-century Danish astronomer, and his colleague Johannes Kepler, who penned the book that sparked the Scientific Revolution in 1609, are often credited with the discovery. There’s only one problem: more than half a century ago, a Chinese researcher called Shen Kuo came at the same conclusion. However, as we all know, the West expanded while China shrank. What went wrong?
Tycho, like Shen, ran afoul of his overlords when he asked for money to back up his idea. Unlike Shen, who ruled over a single, all-powerful kingdom, Tycho ruled over a continent populated by hundreds of smaller, rival nations.
Shen lost all faith for his ideas when his investors abandoned him — the only studio in town had rejected him down. King Rudolf II of Prague, on the other hand, was eager to find someone else prepared to take a chance on Tycho’s insane idea.
As a result, it emphasizes the need of safeguarding delicate ideas, establishing institutions that encourage unconventional thinking, and enabling artists to perform their work without undue interference.
Final Thoughts
Loonshots — ideas that appear too far-fetched but end up altering everything – may influence the destiny of countries in the worlds of business and war.
Risk-averse organizations often lose out on these possibilities because they place too much focus on quick outcomes and so overlook the value of cultivating a culture that encourages experimentation and innovation.
Separating your creative team from those in charge of running things and providing them with the tools they need to flourish is the greatest way to get the most out of them.
Additional Reading
If you like Loonshots, you may also enjoy the following book summaries:
Loonshots is available for purchase.
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