3 Takeaways - Loonshots: How Lunatic, Moonshot Ideas Become Real and Change the World (#222)

Episode Date: November 5, 2024

It’s not easy for huge, breakthrough ideas — the kind that truly change the world — to see the light of day. Here, physicist, entrepreneur and author Safi Bahcall talks in detail about the creativity and determination required, plus the obstacles to overcome, and cites fascinating examples including James Bond, Lipitor, Apple, Airbnb and others. 

You would think that the first time someone had the idea of using an invisible sound signal to detect ships and planes, or a drug to kill tumors by choking their drug supply, or a drug to reduce cholesterol, that these ideas would be immediately recognized as brilliant and adopted. But are the most important breakthroughs immediately recognized as brilliant, or are they written off as crazy? And how do we nurture more of the breakthrough ideas that win wars and cure diseases? Hi everyone, I'm Lynn Toman and this is Three Takeaways. On Three Takeaways, I talk with some of the world's

best thinkers, business leaders, writers, politicians, newsmakers, and scientists. Each episode ends with three key takeaways to help us understand the world and maybe even ourselves a little better. Today, I'm excited to be with Safi Bacall. Safi is a former public company CEO, physicist, award-winning entrepreneur, and author of the wonderful international bestseller Loon Shots.

Safi co-founded a biotechnology company which developed new drugs for cancer. He led its IPO and served as the CEO for 13 years. He worked with President Obama's Council of Science advisors. Safi's book, Loon Shots, was selected as the best book of the year by Amazon, Bloomberg, the Financial Times, and the Washington Post. His book was also recommended by Bill Gates, Danny Kahneman, and Malcolm Washington Post. His book was also recommended by Bill Gates, Danny Kahneman, and Malcolm Gladwell. As a biotech founder and entrepreneur,

as well as the author of Loon Shots, Safi is just the person to ask about, as he says in his book, how to nurture the crazy ideas that win wars, cure diseases, and transform industries. Welcome, Safi, and thanks so much for joining Three Takeaways today. Thanks for having me, Lynn.

Happy to be here. It is my pleasure. I really enjoyed your book. Thanks for saying so. Can you talk about some examples of the greatest loonshots and how they actually happened? When you look at some of the biggest ideas that have created some of the biggest businesses and industry in the last two decades, it's cloud services. The idea that you can take every company's IT budget, every company in the world, the tens of millions or hundreds of

millions or billions that they spend on computers and technology, and give it to one of two companies on the planet. That's a lot of money. That's roughly a trillion dollars in revenue. And 15 years ago, 20 years ago, if you would have said, here's my idea, I'm going to go to every company in the world. And you know your IT budget that you're buying these metal boxes and these software things that you buy. Forget it. Just give it to one company or maybe two companies, throw away all your computers and they'll do everything in the cloud for you. People would have said, you're nuts. That's a crazy idea. And not just old established companies, but really good companies. people would have said, you're nuts. That's a crazy idea.

And not just old established companies, but really good companies like Microsoft and Google, who were dominating cloud IT at the time, 15 or 20 years ago, or dominating business to business. Those companies said, yeah, nobody's gonna do that. It took a tiny little player, someone that was nothing in the business to business world, a company that was known for selling diapers online, which was called Amazon at the time. It was basically a mail order catalog that was splashed onto the internet.

And they said, what if we try this crazy thing? And they came from nowhere in this space versus much, much bigger business to business competitors and clobbered them. So that's an example of a recent business where everybody wrote the idea off as crazy. And if you go back in time, so many of these ideas were written off as crazy from funny examples of Airbnb.

Who's gonna rent out their room to have people sleep in their bedrooms or whatever? All the way back to the transistor, nobody's gonna believe that you can make a switch out of a tiny little metal sandwich, which of course transformed the last century with all the rise of electronics. So if you look over time, the biggest businesses in the world, the biggest ideas that changed society,

most of them were written off as crazy. So interesting. And Andy Jassy, who created that cloud business at Amazon, of course is now Jeff Bezos' successor as CEO. And if you look broadly at these inventors of Loon Shots, who is it that comes up with them? Well, it's funny you mentioned the Andy Jesse example, because Andy Jesse was not the originator of the cloud services idea. He was the guy who led the business after it started getting some traction. Another example is Steve Jobs. Oh, he invented the iPod. Well, not really.

There are quite a few people who, I mean, there were hundreds of music, little devices and a bunch of people came in with that idea. He created the system. He helped design the system which allowed that idea to flourish. And in some ways, that's what Loonshots is about. It's less about you as a leader or a manager need to be the person coming up with the idea. Steve Jobs didn't invent the iPod. Andy Jassy didn't create the concept for web services. Neither did Bezos.

What Bezos did extremely well was create the conditions under which crazy ideas could flourish inside his organization. Very often, the biggest ideas have multiple contributors. There are multiple parents of the iPod. So it's less about one individual invention or inventor and more about creating the conditions inside your team or your company or your organization or your nation where those crazy ideas can flourish as opposed to

the conditions where those crazy ideas get killed. What do you think about the idea of failing fast? Failing fast is an oversimplification. In some ways, it's misleading. It's the wrong point that it's just about the speed of your failure. And it's not about the speed of your failure, it's about the quality of your failure. And it's not about the speed of your failure, it's about the quality of your failure. And so what I often talk about with companies and with teams is first, learning to distinguish between good fails and bad fails. And then second, learning to celebrate good fails.

Because one of the biggest things holding teams and companies back is a fear of failure. So I'll often do a half dozen or dozen or more, two dozen interviews before showing up. And usually within about 10 minutes, you can tease out what are the stumbling blocks for a particular team and company. And fear of failure is almost always on that list. There's about five F's that I think of, but fear of failure is absolutely one of them. And failing fast isn't really the right message.

It's a misleading message. You could throw spaghetti on the wall really fast and it will fail. And you're thinking that you're doing something, but you're not, you're just throwing spaghetti on the wall really fast and it will fail. And you're thinking that you're doing something, but you're not, you're just throwing spaghetti on the wall. What you wanna do is make sure you have a system for running experiments at pace and scale. Because if there's one thing that distinguishes

the truly great companies from all the others, is that the truly great companies run experiments at pace and scale, and the others tend to run on opinions. I was fascinated that many seemingly brilliant ideas, at least in retrospect, are dismissed as crazy. Can you talk about your example of what James Bond and Lipitor have in common? Sure. So James Bond was an idea,

it was a character obviously created by Ian Fleming, a British who had been in British intelligence during the war. And he'd written some novels that were getting some popularity in the UK, but he wasn't having any luck translating it into TV or film. I guess there was one TV show and it did terribly. All of the studios that approached him or were approached on his behalf said,

wait a minute, your idea is a metrosexual British spy who saves the world? Forget it. Nobody's going to buy it. The word metrosexual didn't exist back then, but it's the basic idea. And they said, there's no way. And it was turned down by every studio for years and years and years until Fleming had a heart attack one point and he started to think about his own mortality. And he really wanted entry into this high style life that he was describing and he wasn't quite there. So that's why he was pushing really hard. So then he gave it to these pair of producers who actually did not have much track record at all. He was kind of giving up. They took it to this one studio, finally agreed to do it. But it was such a lousy idea. The first script was the bad guy was like an evil

monkey who would go around on people's shoulders and all these actors turned down the lead role and they finally found some guy who had been a milk truck driver and had been in two movies and nobody had heard of him. His name was Sean Connery. The movie was called Dr. No. And the studio said, good God, this is a disaster. We're not going to open it on many screens. We're just going to find two movie screens in the United States. I think it was in some random places and not even big markets, an opening weekend and who knew? People loved it and it grew into the longest running film franchise of all time. So that was an example of a loonshot and

one of the lessons there is all these ideas look really crazy in the beginning but that's the reason they're such big ideas, because everybody else writes them off. And the first person that breaks through is going to do very well. So what does the statin drugs have to do with that? That was the same idea. The statin drugs are the drugs that, as you probably know, lower cholesterol.

They're responsible for preventing tens of millions of heart attacks, maybe other than antibacterials or vaccines, responsible for the most lives saved over the last 30, 40 years. And when it was first suggested by a Japanese guy named Akira Endo, who just passed away actually this year, people said, no, that's a dumb idea. There's no way you can take a pill to lower cholesterol. That's the stupidest idea we've ever heard. And so what James Bond and

the statin drugs have in common is that they were all loon shots. They all had multiple deaths and they all became the most successful franchise of their field. Large organizations have the people and the money to back big ideas. Why don't large organizations innovate more? I'll give you three of the F's. Fear, Focus, and Framework. Fear we just talked about, but it becomes directly related to your ability to run experiments where if you punish people for failing, I ran an experiment and it didn't work, oh you demoted or you don't get a bonus, what are they gonna do? They're only gonna run experiments that

work. What's an experiment that you know in advance is gonna work? Nothing. It's not a real experiment. It's playing it safe. You're not innovating. The second F is focus. Very often leaders will say, we need to, you know, I want everybody to innovate. Innovation is good. Come back to me with your ideas. And then people come back with,

well, I'd like us to build a train set. I'd like a credit card. I'd like to do a t-shirt. I'd like to open a feet parlor. It's like, what are you talking about? We run a tractor company. What are you talking about credit cards and t-shirts and theme parks? So then says no to all these ideas. And what happened? People become demotivated. They're like, oh, I'm not taking my ideas here anymore. So the lack of focus is a big problem.

And a third one is framework. If you don't have a framework, eventually you're just throwing, again, just throwing spaghetti on the wall, people doing a bunch of ideas, and then now what? All right, I did an idea, I get that you want to experiment, it worked. And now what? I don't know. So if you don't have a framework for advancing projects and ideas along a pipeline with a system of here's where it goes from a one day $100 experiment to a five week $5,000 experiment to a 50,000 five month experiment and here's a little group that's going to be making the decisions, unless you create that system, it's just going to be gunk. So once you can work on these three things, that ends up making a big difference. Can you talk about the barbell structure, what you call the soldiers and creatives?

In every group that I've spent time with, you see what I like to think of as the beautiful baby problem. So you have inside the organization what you can think of as the artists or the creatives who are coming up with their new idea. And it doesn't matter if it's like, oh, here's a chemist with a new molecule or a biologist with a new pathway in the cell or an engineer with a new algorithm or coffee machine designer with a new molecule or a biologist with a new pathway in the cell or an engineer with a new algorithm or coffee machine designer with a new design. They love their new idea. And then you have the soldiers who are responsible for scaling things up and reducing risks

and mitigating flaws and on time, on budget, on spec, consistently with quality to our customers. And those two groups usually don't understand each other and don't like each other. The group often that's making the money, let's say the soldiers who are delivering to customers and collecting checks, don't necessarily like the group that's spending the money, which is the people who's running experiments and spending that money without seeing anything and vice versa. And I think of it as a beautiful baby problem because the one group, the creatives, see their new ideas full of potential like a beautiful baby.

And the soldiers just see a shriveled up raisin covered in vomit and poop. And that's the problem. You have a beautiful baby and sort of vomit and poop. And the thing is, they're both right. The early stage ideas do have a lot of potential, but they also have a ton of flaws. And what leaders miss is like, oh, let's all just come together and hold hands and sing kubaya. No, you actually want that tension.

You want to lean in that tension because you want the creatives super excited and focused on the potential of the idea. And you want the creatives super excited and focused on the potential of their idea, and you want the soldiers looking for the flaws so that they can mitigate them and de-risk them as they scale it up to millions or tens of millions of products or services to customers. So the artist and the soldiers, the message for leaders is you need to love both groups equally because very often a leader is biased towards one or the other, and if you're biased towards one or the other, you will sink the ship.

You need to have balance, just like you love all your children equally. You need those groups to work together. Let's talk about Apple. Steve Jobs was amazingly creative with the iPhone, music, the app store, iPads and MacBooks. Apple under Tim Cook doesn't seem as inventive, yet Apple is thriving and it's now the largest company in the world by market capitalization. How do you see Apple? Steve Jobs saw his greatest creation out of any single product, but the system that he built.

And I think Jobs was a more flamboyant character and personality, so people connected to that. And Tim Cook is a less flamboyant, less hungry for publicity character. But if you look at what Apple has done, they've created some pretty amazing products. And some innovations are very splashy and some innovations are very important, but you don't see them. Jobs' introduction of the iPod was flashy, but actually one of his most critical innovations was to close the Apple ecosystem. That's not a very sexy phrase, or you don't even know, wait a minute, what are you talking about?

But if you go back to what he did when he came back to Apple the second time in 97, Apple had opened up its ecosystem and everybody was making Apple clones and they were really struggling and he paid a lot of money to shut that down, take all those licenses away right off those contracts. And what that did was it created a walled off garden where they could do what they wanted

and they could create an environment that they optimized for their customer. It's easy to say, oh, the iPod was kind of flashy and the iPhone was kind of flashy. Many of his flashy things didn't work. The next cube before Apple was a disaster and many of his other ideas were disasters. But actually some of the biggest breakthroughs that he did were the non-flashy things like closing off the ecosystem, charging 99 cents for a song at the time when Napster was out there and everybody thought that was a stupid idea because you could just pirate songs for free. People just didn't understand

that there were some other things going on once they launched that idea, people wanted the security. So the message is Apple has done a lot of things under Tim Cook, because Tim Cook, I think, kept a lot of the same system that Jobs had. And Apple has done a lot of things underneath the hood that have been very important for their business. And one of the things I talk about,

love your artists and soldiers equally, well, Jobs saw himself as this ultimate artist and designer. And he got really into the fonts and look. And he worked very closely with Johnny Ive about the design. And so that's kind of the world that he was coming from. But he had learned in this interim period between his first time in Apple and the second time in Apple, he had learned from the movie business, Pixar, that you have to combine

artists with soldiers. And in the movie business, you have directors and writers who are the artists and actors, but there's no movie if you don't have a producer and a budget and money. So every movie is a lesson in combining artists and soldiers. And he brought that back to Apple.

And so he encouraged beautiful artistry and beautiful design, you know, with Johnny Ive's group. But one of the first thing he did was bring in a guy way back from Compact Computer, who was known as the Attila the Hun of inventory. And if there's sort of a better word for a soldier inside a company, I don't know it. And that guy was Tim Cook. And Jobs led not like this Moses that was coming up with ideas, but he led really by managing the touch and balance between the Johnny Ives and the Tim Cooks. And if it wasn't for Johnny Ives' group coming up with a beautiful iPad design, that would have been a problem. But if it wasn't for Tim Cook, lowering the cost from $5,000 to $600,

there would be no Apple today. So you need both. And Jobs understood that, even though he saw himself as this ultimate artist, the person who took over when he died was not the ultimate artist, it was the ultimate soldier. I think the lesson that Tim Cook took from that is balance

your artists and soldiers, love them both equally. And I think he's done that and there's been a lot of behind-the-scenes innovation from that organization that's made it into the company that it is today. So you believe that the support and execution of Lunsat ideas is what's critical, not necessarily the idea itself? You need both. There are two types of innovative ideas.

And I talk about S-type and P-type. There's the product, iPod was sort of a product, but then there's a strategy. And both are important. And the product one will make the cover of Time Magazine. The strategy one usually doesn't. You needed to have both product innovations and strategy innovations to build a really successful and powerful moat as an organization. And that's what he did. And I think Apple has a good track record of having done both product and strategy innovations very well. Amazon,

Kindle, Alexa are all product innovations, but they've done brilliant strategy innovations, shifting from being a pure business to consumer player to business to business infrastructure, selling these services and why they work, and the reason that business succeeded. All of those were strategy innovations. So the companies that can do both product and strategy, both what I call P-type and S-type, are the ones that end up building a really big moat against their competitors. So interesting that companies like Apple and Amazon have both the product type and the strategy innovations, whereas some other companies may have just the product type innovation or just a strategy innovation, like American Airlines and the frequent flyer programs.

Safi, what are the three takeaways you'd like to leave the audience with today? Number one, run experiments, both in personal life and in professional life. In business, the companies that do well are the ones that run experiments at pace and scale. But I've also found over the years, it's very important in personal life, even in your relationships. It's easy to get into a rut or there'd be some friction. And if you want to get out of it, you're not going to get out of it unless you try something different.

Second takeaway, be a border crosser. That has worked very well for me in my life, which is I've crossed borders from science to big business, to entrepreneurial business to writing to the kind of new things that I'm doing now. And what's helped me is that I look for the best and most interesting and most fun in each world that I've been in, whether it's the physics world or the entrepreneurial world or the big business world world and look at what's

interesting in each of those worlds and cross borders between those worlds. Most people stay in one world, play in one sandbox with one set of rules. And when you're willing to liberate yourself and try to cross worlds, you can find a lot of ideas and power and energy. worlds, you can find a lot of ideas and power and energy. The third takeaway would be let curiosity be your superpower in every area of life, professionally, but also personally. This has been wonderful. Safi, I really enjoyed our conversation and your book, Loon Shots.

Thank you. Thanks very much, Lynn. I hope you enjoyed today's conversation with Safi Bakal. If you're interested, we have two related episodes. Episode 161 with Harvard Business School's Amy Edmondson on failing well and also episode number 28 on Amazon. The episode is working for Jeff Bezos and the secrets of Amazon's success. If you're enjoying the podcast, and I really hope you are, please review us on Apple podcasts or Spotify or wherever you get your podcasts. It really helps get the word out. If you're interested, you can also sign up for the Three Takeaways

newsletter at three takeaways.com, where you can also listen to previous episodes. You can also follow us on LinkedIn, X, Instagram and Facebook. I'm Lynn Toman, and this is Three Takeaways. Thanks for listening.