we’re not interested in something where we’re not going to find out for 5 or 10 years if we’re on the right path we’re obsessed with tight learning loops so tell us a story about how this would change the world sounds like you have that and then for a small amount of money and a small number of months certainly under a year how are we going to find out that we’re we have evidence as not progress evidence that we’re on the right track if you don’t have if your moonshine isn’t structured that way doesn’t mean you shouldn’t do it guess it just means it wouldn’t fit at X because it’s not we’re obsessed with efficiency and you can’t drive efficiency if you don’t have tight learning rules which by the way makes a bunch of healthcare stuff pretty hard for us to do and a massive transformative purpose is what you’re telling the world it’s like this is who I am this is what I’m going to do this is the dent I’m going to make in the universe Astro you do not disappoint my friend and it’s so I could listen to you and I have and uh and thank you for the
[00:01:01] wisdom my pleasure um you know it’s wisdom that uh I want you all to internalize if it were easy it would have been done already if you think you know how to do it probably not a moonshot or else you’re really lucky um there’s a couple of things and please go to the uh to mics but I I’ve got to pull out a few more things from you one of the things I learned from you that I love is the idea of a premortem do you want to uh share what that is sure so there we get excited about what we’re doing and that is an emotional process that is hard to fight and so finding intellectual architecture to give to teams to help them get out of those emotions for just a little bit and sort of structure their thinking differently we have lots of those at X I would recommend that you practice some of them but one of the ways to do that that is
[00:02:00] to ask them to come up ahead of time with what’s going to go wrong if you’re really excited you can end up with blinders about what’s going to go wrong so there are different ways to do premortem but here was an example that um I really liked it was about two months before Wing was going to do its first public launch so this is maybe 2013 2014 and I could feel that the team was suffering from launch fever where they were just kind of excited about how great it was going and maybe it was going to go great maybe and I got them in a room and there was pads of paper and pens in front of the seats everyone sat down and I said it’s three months from now one month after our launch and it was an unbelievable failure I mean just gut-wrenchingly bad so bad we can’t even look each other in the eyes when we walk down the hallway and you know why it was so bad you knew it the whole time this is a test two minutes write
[00:03:01] down why the whole thing blew up in our face and that like 16-year-old I want to get an A on the test kicks in and everyone starts scribbling frantically all of the things that are going to go wrong and afterwards we spent several hours like organizing the thoughts and talking about it and nothing went wrong maybe nothing would have gone wrong but I seriously doubt it because we then did two months of work to get ahead of all those problems that’s an example there are other ways to do preor but that’s I love so simple is that a nugget you guys can bring back to your companies it’s extraordinary uh one more thing that we’ll go to your questions here uh I asked you at our Patron lunch uh how many companies you killed now as entrepreneurs we you know we love our Darlings and and being proud of how many companies you kill is not typically what people think about what was that number again 2,000 2,000 roughly and we have a graveyard we keep track of them because they do come back
[00:04:02] they’ve come back several times um you know technology changes technology changes so one of the ones that was the most painful for us to kill the internal name for it was called fog horn we were so proud of this we had a working system it was about the size of a couch for turning seawater into methanol using green energy you could stick it right in a gas tank and it would go unbelievable save the world kind of stuff except we couldn’t convince ourselves this is about six years ago that the cost gallon of gas equivalent was going to get down below $15 even if we were kind of optimistic about a bunch of things so we shut it down and the team was awesome about that we published in the international um Journal of greenhouse gas control the sort of science side of what we did we published in Fast Company what the business side of why we killed it so that other people could build on top of this and then we went on with our lives but we’d also been working on green hydrogen for a long time and it’s now
[00:05:00] turned out that we might have a real breakthrough in how to make green hydrogen way cheaper but wait a second the reason we killed that thing like five six years ago was that the single most expensive part of making a synthetic fuel was getting the hydrogen oh wait a second maybe we could go back there amazing can you describe is it weekly or monthly when you kill you have your your ceremony to kill your companies um it’s more mixed now there isn’t a single day when we have descri describe what it’s like so most typically these are projects sometimes we’ve closed down projects as big as you know 50 or 70 people um and there’s a lot you know a 50 person team at X is usually functioning like something at least double its size because we have a lot of shared infrastructure so that we don’t have to find jobs for you know 100 people if we close down a 50% team that was using a lot of that infrastructure we only have to help 50 people find new
[00:06:00] jobs around X more typically it’s 3 four five people we’re going to need to find jobs for that sort of functionally when they show all the people working on the teleporter project or whatever it is there might be 20 faces on the slide but only maybe three four five people are going to need to find new jobs full-time and we will at our All Hands which happens every two weeks celebrate them give them a chance to describe what excited them about the idea in the first place what experiments they ran why they’ve decided to kill that thing and then we celebrate them as part of that that gets their the failure into the moonshot compost it also allows for people to see that a failure is not a bad thing it is an experiment where we have successfully decided not to do more of it for good reasons awesome kickass it was a gorgeous idea super well executed stopped at the right time what could be better than that but you have to practice that and celebrate that in
[00:07:00] front of everybody for people to start to feel it yeah so much wisdom ultimately you’re giving back to the company the time you would have wasted going forward all the money would have wasted so celebrating that is extraordinary George let’s go to you first okay hey asro that was awesome um okay great the mic sign um so I run a emerging Venture Studio here in La uh we’re just bringing to Market our first two moonshots so uh hearing everything you said was just totally awesome um I have a two-part question so the first one is as Google’s kind of like the the okr’s king and you talked a lot about habits not outcomes so I imagine you’ve kind of reframed your okrs around driving the habits I’d love to hear how you approach that from top down what is Google x’s okrs and down to the individual how how have you guys reframed that from maybe the classic Google model and then great great question I think there are probably situ ation in which okrs can be a good way to
[00:08:01] drive things I think it is a horrendous way to drive mood shots what really an okr is like something that you pretty much care about but if you get 70 or 80% of the way you celebrate it I find that really bizarre especially with moonshots and I think maybe more generally in life whatever you’re trying to do there are actually two buckets and neither of them is 70% is okay there are like no messing around we have to get these things done even if we’re in total experimental mode if you want to run an experiment but you’re expecting something from me 2 months from now like I need to deliver that to you not like 70% delivered to you you can’t run your experiment there’s like the no messing around stuff that’s not really an okr like 70% is okay that’s like get it done that’s a should be a small set of things that are these non-negotiables beyond that everything else should be an audacious goal it should be an experiment you don’t even know what the right answer is how can you set your key results most of the time when the real thing is I don’t
[00:09:01] even know if we should go over there and I don’t know what we’re going to find you should have a reason to go looking over there but you shouldn’t be determined to find something that just blinds you to the the thing you’re trying to learn so we structure what we do around audacious goals and try to help people practice learning where they say we’re going to try to do this thing I bet it doesn’t work we’re going to bust our ass trying to accomplish this or learn this or head in this direction and we’re going to report report back to you all of X next quarter on how that went and frequently they’ll just give themselves a zero or say you know what halfway through the quarter we realized that wasn’t even the right thing to be working on and we just headed in this other direction instead and that’s okay Patrick Mike three thank you George thank you Astro that was awesome um as a bootstrapped company with the team having Equity I struggle with the balance between the moonshot we drive habits to hey we
[00:10:01] actually need to succeed on a monthly basis why we grow into that how do you find that balance right we choose not to go the VC route so you you know they and they know the financials there’s full transparency so how do you find that balance I mean I’ll give you the answer I I don’t mean to be depressing but I want to be transparent with you I I don’t know that you can do a moonshot while people have to be worried about their kids college fund at the same time I think that that is rational and so as a result while you’re at x five six seven years probably till you’re at least 100 people as a team you don’t have equity in what you’re doing if it turns out that this option not a business we’re exploring we’re answering the question we’re buying options on the future for alphabet if we then decide to turn it into other bet at that point there can be equity and you the founding team can get Equity alongside of alphabet and own this business business
[00:11:00] once a lot of the risk has been removed because then your interests and their interests haven’t diverged but it doesn’t make any sense for me to say Kill Your Darlings and you’ve been paid for the last couple of years in darling stock options like that becomes impossible to kill but but think about what that means that means that intellectual honesty becomes harder in the face of financial incentives so you had better not give anyone Financial incentives while the single most important thing is exploration and intellectual honesty once it’s flipped and you’ve done more than 50% of your exploration and you want to harness entrepreneurial Zeal then stock options then Equity makes sense there will still be some intellectual honesty but it will go down some relative to the blast through the walls attitude that stock options are Equity drives Astro we need to hit one other thing you’ve talked about in the past we didn’t touch on today which is you have an organization
[00:12:00] with number of people running medium and large siiz companies and I want to do moonshots inside my organization and it’s like no no no no it’s need to put the moonshot organization on the outside and and your key point that you made and i’ like you to amplify on is this is my 10% people and this is my 10x people can you play on that a little bit sure I mean I don’t think that’s totally fair to Google I I think Google is still a very inventive organization in lots of ways not saying not saying alphabet well but I am actually I’m saying the reason that X can do what it can do is because we are part of a company that does have people working incredibly hard to make sure that over the next year or two good things happen and the lights are kept on and we are the 10% not the only 10% but one of the important 10% as it were for alphabet so if I were running a large company and I wanted to start up a moonshot factoring within my company what I would do isn’t say to the people
[00:13:00] who aren’t in that like you stop being Innovative now that’s not a thing but to say to this relatively small group of people relative to the size of my overall company I’m going to create a meaningful barrier between you and the rest of this company don’t worry about what our company is now and there barriers to protect you from all of the antibodies and innovators dilemma that contend to kill organizations like this I want you to go figure out what problems we should be solving in 10 years and how to solve them that’s your job moonshot Factory that’s my job for alphabet is to help them get into new uh areas where we have at least some you know the beginnings of some solution one of the things I heard you you say as well which is want to I want membership here to hear is if you’re in the moonshot group I don’t want you thinking about 10% I want you thinking about crazy you know the day before something is truly a breakthrough it’s a crazy idea for sure when someone brings an idea at X the
[00:14:02] single most likely reason we would stop doing it is because it’s too obvious and it will probably work as soon as somebody brings something to us that doesn’t sound crazy we’re like yeah that probably work nope not interested because if we can all say yeah that would probably work everyone in else in the world is going to say yeah that would probably work once you’ve proposed something that fits with those three circles huge problem with the world radical proposed solution breakthrough technology you have a hypothesis we could go to test and it sounds Bonkers and I’m sure you’re wrong the answer is awesome gorgeous idea you’re probably wrong what is the fastest cheapest way you can explore that idea verify that you’re wrong so we can move on to the next thing because if you have a 1% chance of being right which is sort of typical of moonshots if your pride is going to be connected to being right you have a 99% chance of being miserable at X you like have to get into the mode of being being proud of killing things for
[00:15:00] good reasons not being proud cuz you were right about your idea cuz you’re probably not right about your idea Mike yes so I was wondering is that space elevator in your opening um slide one of your moonshots no we did investigate it um we weirdly we investigated it somewhat seriously after the New York Times erroneously this is like 2011 or something said we were making one and so we just went a couple rounds sanity checking can we make one and the strength to weight ratio isn’t there yet to make a space elevator You’ need to have something that could make you know tens of thousands of miles of something as strong relative to its weight as carbon Nano tubes we’re just not there yet so let’s go to zoom Francois what’s your question my friend hey so wonderful uh implementation we enjoyed it um we have started uh a company in the oncology space and our
[00:16:01] moonshot is to cure head and neck cancer and uh it’s a you know Wonderful opportunity lot of genetics behind it um lot of very very smart people helping us doing that from you you see more cancer center and and NYU um and we have a couple of platform technology that we’re working on that are very promising like a a very super duper animal model for head and neck cancer my question to you as a startup um and and looking at the world the possibilities here in terms of therapeutic development you know I understand you know maybe it’s not the time for moonshot but if I really want to transform the world and develop something extraordinary in a very difficult cancer to treat and that’s what I like to do I like to experiment and so on so forth where do you find the source of money to do that I suppose that this is difficult but have you had opportunities with philanthropies to
[00:17:00] found this first part of of the moonshot how how does it work well I’m not sure if this is clear I mean we don’t raise money from the outside that’s not really how it works we get money from alphabet and we run a process which as as I was describing it produces a lot of what looks like waste at least after the fact because things didn’t work out but you know roughly once a year we produce something that alphabet’s pretty excited about like more recently intrinsic or Everyday Robots which have now become have graduated from X in the last year or two so we don’t go out and seek for money if your effort was at X and I’m not pulling you into X or telling you have to do it this way but if your effort was at X then we would say we’re not interested in something where we’re not going to find out for 5 or 10 years if we’re on the right path we’re obsessed with tight learning loops so tell us a story about how this would change the world sounds like you have
[00:18:00] that and then for a small amount of money and a small number of months certainly under a year how are we going to find out that we’re we have evidence as not progress evidence that we’re on the right track if you don’t have if your moonshot isn’t structured that way doesn’t mean you shouldn’t do it I guess it just means it wouldn’t fit at X because it’s not we’re obsessed with efficiency and you can’t drive efficiency if you don’t have tight learning loops which by the way makes a bunch of healthare stuff pretty hard for us to do Nora when you take an idea out of the freezer do you have a resurrection ceremony and if so what does that look like we don’t what an awesome idea God it’s a Miss I love of the idea of a resurrection ceremony let’s here’s Resurrection I’ll give you a hug afterwards and we’re going to do that at our next di moros yeah thanks there you
[00:19:03] go happy Easter you’re right we should do it at Easter that’s even better Daniel Mike seven thank you loving this session so you’re an idea Factory how do you start to think about Capital allocation on an idea by idea basis I get that there’s kind of a meritocracy around the best ideas earning more weight but you know you’re allocating capital and focus with a lot of competing uh you know new ideas to pursue so how do you start thinking about Capital allocation and do you have any like concentration concerns is there a certain point where you say okay we’re too heavily weighted on this idea or this type of idea yes certainly that the conversation oh how did we get to the place where almost a third of our total resources on one project that has happened before and that’s not a good thing it ends up being a little bit feeling too big to fail which is dangerous given the process I just described that that stopped being a problem for us like this is one of the many things we did wrong learned about
[00:20:01] it got ahead of and now that doesn’t happen anymore I would say here’s the most nonobvious and an uncomfortable part of our Capital allocation process everyone at X hears me say what I’ve just said to you and they nod they feel somewhat inspired and they kind of go back and at least sort of do business as usual because they’re really used to just being an entrepreneur and I’m really smart and I’ll build some cool stuff and so we are purposefully under resourcing the teams because I don’t want them to do it the normal way and it is crazy making for them because they think they have a great idea and if me and Astro would just give me like twice the resources I could do it but I could do it is shorthand often for I could do it the normal way I don’t want them to do it the normal way I would rather turn it off it is our job to look for cheats in the video game game of life that is what we’re being paid by alphabet 4 to find
[00:21:02] these kind of end runs around the problem not to spend a huge amount of money blasting through the middle of the problem but that is a very painful thing when you’re on the receiving end of that Capital allocation and have maybe intellectually but not in your heart or in your gut really gotten what we’re doing yet you can feel like I don’t love you we’re not supporting you because you’re under resource that is an example tension that happens at xant thank you let’s go to edwi Mike four this is this is great so refreshing uh so I’m working on a moonshot to um to reinvent the the broken recruitment industry with a a blockchain smart contract which is inevitable it’s going to happen um but a a leading crypto researcher with a you know million followers posted a tweet saying well whoever does this is going to be a unicorn within a year and so I’m I’m going through all of the the respondents I think there might be 50 teams all working on the same thing the thing we’re working on is a unification of of an entire industry to align
[00:22:01] incentives so I’ve written a white paper people are all excited but every time I’m talking to potential co-founders they’re posturing around why they’re the best to do it and almost wanting to compete and I want to try to unify and collaborate with people so just what general advice do you have for me to how to take you know your talk to people who actually want to uh in a way like posture and say like you know I’m the best person to do this alone um I don’t know I mean collaboration is a very powerful tool that is massively underused in most of the world I think exercising a lot of trust you’ll get hosed semi-regularly if you exercise what is thought considered too much trust but I also think you will get paid back you will net to the positive with the opportunities for collaboration so finding even a few people who will join that club might be a way to get the ball rolling I would also say that at X you know you could look at alphabet and
[00:23:00] say it’s like the ultimate platform building business surely everything that X is doing like could be very platformy so they’re probably building a platform from the beginning it’s actually kind of not like that what we would say on every single thing we’re doing is let’s aspire to a platform that can help the world but let’s also shoot for a beach head where we don’t have to boil the whole ocean to to prove we can boil the first bucket of water let’s get a bucket of water let’s boil it show that we can do that then we’ll get a swimming pool we’ll boil that so I would also try to design some way for you not to need everybody to participate in order to win like find a way where you can win design it so that when one person joins you you and they are better off I think that’ll be a faster path to everybody joining you than trying to get everyone to join you from the beginning beautiful let’s go to zoom Andrew thank you Peter Arthur is been one of the best talks I’ve heard in my
[00:24:00] whole career it’s been really amazing thank you for that [Applause] [Music] let’s I mean you inspired me for a lot of ideas for sure for me and my team and I’ll make sure that everybody in my team sees this goal I I have a global team located in many countries Brazil Uruguay San Francisco China Singapore I wonder how you think about Global Talent in your case and does X work mainly in one area of the country do you how do you diversify across the globe to still keep you know the ideas flourishing but at the same time Harvest maybe a higher diversity great question great question this is an awesome example of how we Harvest you know open-mindedness and everyone having the opportunity to be right and to prove me in particular but all of us at X wrong I was I I’ve been on this thing for a long time I wish we could have offices around
[00:25:01] the world but I don’t know how to do that I can’t even get people in the same floor of the same building that I’m in to be doing what I’m talking about like what I’ve described to you is aspirational we’re doing a weak version of what I’m describing it’s probably better we our joke is that we’re the worst moonshot Factory in the world except for all the other ones which is like you know we could have some pride in what we’re doing but we have a long way to go still so I’ve been resisting having offices we have people sprinkled all over the place but we haven’t really set up a proper office it’s mostly been these sort of Rogue groups I’m like G fine I won’t fight that one and finally someone convinced me about a year ago that we needed to try it and she was just so persistent and she’s been at X for a long time and I said fine so she’s now set up our first real X satellite office which happens to be in Tel Aviv and I told her I don’t care what you do
[00:26:00] I don’t care what you produce I don’t there’s no measure of success for me in this experiment other than how exy are they if you can get those people in Tel Aviv to be at least as XY as least with the program that I’ve described as the people who are in our building you win and no matter what they produce if that’s not true you lose you it wasn’t a sucess I’m not mad at you but it won’t be a success and we’ll close the office down it’s only been 9 months and I was totally wrong I think what I have learned is I was right big asterisk unless a really exy person goes to that office and opens it themselves she was so personally sold on the things that I’ve been talking about that she’s actually been more successful than me CU she has like eight or 10 people right now and day and night she’s with them talking like this and that’s more successful than having like hundred plus times as many people of passionate Israel we go to our last question here from
[00:27:01] Yi H thank you thank you for setting the office in Israel you know we really need it so that’s good for us and unfortunately in Israel we all the time have to reinvent ourselves on a Bas but short question okay I want you to tell us the story of the what happened with Google X because I think it’s coming back now if I’m not mistaken so it’s a resurrection story can you tell us about that um you mean literally how the word Google left our brand no no no no no no Google Glass what Google Glass yes sorry um I mean the very short version of that is we had a vision of how AR would work into people’s lives professional lives into their personal lives and I think and it’s fine it’s how it is we or to early that part I’m not at all sorry about that’s kind of our job to be somewhat too early the part that that we got wrong was we pretended we were done
[00:28:00] when we weren’t done we had built an awesome learning platform and somewhere along the way cuz X was still young we started kidding ourselves and kidding the rest of the world that it was a product when it was not yet a product and that then set expectations really high that we couldn’t meet that was really bad so it looked like Google Glass went away but that’s actually not what happened it was focused on the B2B Market it’s been at X for on and off actually for the last like 10 11 years it’s been in the rest of Google the rest of time Google Glass is still produced it is being used in professional settings like doctor’s offices and wherever it’s actually being used in prototyping for some of our moonshots and um yeah I I don’t think it’s dead so maybe that was what you’re referring to ladies and gentlemen give it up for astr tell thank you everyone this is Peter again before you take off I want to take a moment to just invite you to subscribe to my weekly Tech blog today over 200,000
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