How the secretive Silicon Valley lab is trying to resurrect the lost art of invention
By Derek Thompson
Photos by Justin Kaneps
This article about X was the cover story of The Atlantic November 2017 issue.
Copyright The Atlantic 2017
Excerpt below. Read the full article on TheAtlantic.com
III. The Fail
Astro Teller likes to recount an allegorical tale of a firm that has to get a monkey to stand on top of a 10-foot pedestal and recite passages from Shakespeare. Where would you begin? he asks. To show off early progress to bosses and investors, many people would start with the pedestal. That’s the worst possible choice, Teller says. “You can always build the pedestal. All of the risk and the learning comes from the extremely hard work of first training the monkey.” An X saying is “#MonkeyFirst”—yes, with the hashtag—and it means “do the hardest thing first.”
But most people don’t want to do the hardest thing first. Most people want to go to work and get high fives and backslaps. Despite the conference-keynote pabulum about failure (“Fail fast! Fail often!”), the truth is that, financially and psychologically, failure sucks. In most companies, projects that don’t work out are stigmatized, and their staffs are fired. That’s as true in many parts of Silicon Valley as it is anywhere else. X may initially seem like a paradise of curiosity and carefree tinkering, a world apart from the drudgery required at a public company facing the drumbeat of earnings reports. But it’s also a place immersed in failure. Most green-lit Rapid Eval projects are unsuccessful, even after weeks, months, or years of one little failure after another.
At X, Teller and his deputies have had to build a unique emotional climate, where people are excited to take big risks despite the inevitability of, as Teller delicately puts it, “falling flat on their face.” X employees like to bring up the concept of “psychological safety.” I initially winced when I heard the term, which sounded like New Age fluff. But it turns out to be an important element of X’s culture, the engineering of which has been nearly as deliberate as that of, say, Loon’s balloons.
Kathy Hannun told me of her initial anxiety, as the youngest employee at X, when she joined in the spring of 2012. On her first day, she was pulled into a meeting with Teller and other X executives where, by her account, she stammered and flubbed several comments for fear of appearing out of her depth. But everyone, at times, is out of his or her depth at X. After the meeting, Teller told her not to worry about making stupid comments or asking ignorant questions. He would not turn on her, he said.
Hannun now serves as the CEO of Dandelion, an X spin-off that uses geothermal technology to provide homes in New York State with a renewable source of heating, cooling, and hot water. “I did my fair share of unwise and inexperienced things over the years, but Astro was true to his word,” she told me. The culture, she said, walked a line between patience and high expectations, with each quality tempering the other.
X encourages its most successful employees to talk about the winding and potholed road to breakthrough invention. This spring, André Prager, a German mechanical engineer, delivered a 25-minute presentation on this topic at a company meeting, joined by members of X’s drone team, called Project Wing. He spoke about his work on the project, which was founded on the idea that drones could be significant players in the burgeoning delivery economy. The idea had its drawbacks: Dogs may attack a drone that lands, and elevated platforms are expensive, so Wing’s engineers needed a no-landing/no-infrastructure solution. After sifting through hundreds of ideas, they settled on an automatic winching system that lowered and raised a specialized spherical hook—one that can’t catch on clothing or tree branches or anything else—to which a package could be attached.
In their address, Prager and his team spent less time on their breakthroughs than on the many failed cardboard models they discarded along the way. The lesson they and Teller wanted to communicate is that simplicity, a goal of every product, is in fact extremely complicated to design. “The best designs—a bicycle, a paper clip—you look and think, Well of course, it always had to look like that,” Prager told me. “But the less design you see, the more work was needed to get there.” X tries to celebrate the long journey of high-risk experimentation, whether it leads to the simplicity of a fine invention or the mess of failure.
Because the latter possibility is high, the company has also created financial rewards for team members who shut down projects that are likely to fail. For several years, Hannun led another group, named Foghorn, which developed technology to turn seawater into affordable fuel. The team appeared to be on track, until the price of oil collapsed in 2015 and its members forecast that their fuel couldn’t compete with regular gasoline soon enough to justify keeping the project alive. In 2016, they submitted a detailed report explaining that, despite advancing the science, their technology would not be economically viable in the near future. They argued for the project to be shut down. For this, the entire team received a bonus.
Some might consider these so-called failure bonuses to be a bad incentive. But Teller says it’s just smart business. The worst scenario for X is for many doomed projects to languish for years in purgatory, sucking up staff and resources. It is cheaper to reward employees who can say, “We tried our best, and this just didn’t work out.”
Recently, X has gone further in accommodating and celebrating failure. In the summer of 2016, the head of diversity and inclusion, a Puerto Rican–born woman named Gina Rudan, spoke with several X employees whose projects were stuck or shut down and found that they were carrying heavy emotional baggage. She approached X’s leadership with an idea based on Mexico’s Día de los Muertos, or Day of the Dead. She suggested that the company hold an annual celebration to share stories of pain from defunct projects. Last November, X employees gathered in the main hall to hear testimonials, not only about failed experiments but also about failed relationships, family deaths, and personal tragedies. They placed old prototypes and family mementos on a small altar. It was, several X employees told me, a resoundingly successful and deeply emotional event.
No failure atx has been more public than Google Glass, the infamous head-mounted wearable computer that resembled a pair of spectacles. Glass was meant to be the world’s next great hardware evolution after the smartphone. Even more quixotically, its hands-free technology was billed as a way to emancipate people from their screens, making technology a seamless feature of the natural world. (To critics, it was a ploy to eventually push Google ads as close to people’s corneas as possible.) After a dazzling launch in 2013 that included a 12-page spread in Vogue, consumers roundly dissed the product as buggy, creepy, and pointless. The last of its dwindling advocates were branded “glassholes.”
I found that X employees were eager to talk about the lessons they drew from Glass’s failure. Two lessons, in particular, kept coming up in our conversations. First, they said, Glass flopped not because it was a bad consumer product but because it wasn’t a consumer product at all. The engineering team at X had wanted to send Glass prototypes to a few thousand tech nerds to get feedback. But as buzz about Glass grew, Google, led by its gung-ho co-founder Sergey Brin, pushed for a larger publicity tour—including a ted Talk and a fashion show with Diane von Furstenberg. Photographers captured Glass on the faces of some of the world’s biggest celebrities, including Beyoncé and Prince Charles, and Google seemed to embrace the publicity. At least implicitly, Google promised a product. It mailed a prototype. (Four years later, Glass has reemerged as a tool for factory workers, the same group that showed the most enthusiasm for the initial design.)
But Teller and others also saw Glass’s failure as representative of a larger structural flaw within X. It had no systemic way of turning science projects into businesses, or at least it hadn’t put enough thought into that part of the process. So X created a new stage, called Foundry, to serve as a kind of incubator for scientific breakthroughs as its team develops a business model. The division is led by Obi Felten, a Google veteran whose title says it all: head of getting moonshots ready for contact with the real world.
“When I came here,” Felten told me, “X was this amazing place full of deep, deep, deep geeks, most of whom had never taken a product out into the world.” In Foundry, the geeks team up with former entrepreneurs, business strategists from firms like McKinsey, designers, and user-experience researchers.
One of the latest breakthroughs to enter Foundry is an energy project code-named Malta, which is an answer to one of the planet’s most existential questions: Can wind and solar energy replace coal? The advent of renewable-energy sources is encouraging, since three-quarters of global carbon emissions come from fossil fuels. But there is no clean, cost-effective, grid-scale technology for storing wind or solar energy for those times when the air is calm or the sky is dark. Malta has found a way to do it using molten salt. In Malta’s system, power from a wind farm would be converted into extremely hot and extremely cold thermal energy. The warmth would be stored in molten salt, while the cold energy (known internally as “coolth”) would live in a chilly liquid. A heat engine would then recombine the warmth and coolth as needed, converting them into electric energy that would be sent back out to the grid. X believes that salt-based thermal storage could be considerably cheaper than any other grid-scale storage technology in the world.
The current team leader is Raj B. Apte, an ebullient entrepreneur and engineer who made his way to X through parc. He compares the project’s recent transition to Foundry to “when you go from a university lab to a start-up with an A-class venture capitalist.” Now that Apte and his team have established that the technology is viable, they need an industry partner to build the first power plant. “When I started Malta, we very quickly decided that somewhere around this point would be the best time to fire me,” Apte told me, laughing. “I’m a display engineer who knows about hetero-doped polysilicon diodes, not a mechanical engineer with a background in power plants.” Apte won’t leave X, though. Instead he will be converted into a member of the Rapid Eval team, where X will store his creative energies until they are deployed to another project.
Thinking about the creation of Foundry, it occurred to me that X is less a moonshot factory than a moonshot studio. Like MGM in the 1940s, it employs a wide array of talent, generates a bunch of ideas, kills the weak ones, nurtures the survivors for years, and brings the most-promising products to audiences—and then keeps as much of the talent around as possible for the next feature.
Derek Thompson is a staff writer at The Atlantic, where he writes about economics, technology, and the media. He is the author of Hit Makers and the host of the podcast Crazy/Genius.
Copyright The Atlantic 2017