Book SummaryLoonshots, by Safi Bahcall

1-Page Summary1-Page Book Summary of Loonshots

Loonshots, by Safi Bahcall, is about the kinds of ideas that are so original and so ambitious that they and their creators are initially dismissed as crazy. The word itself is a combination of “loony” and “moonshot,” two terms that capture the ambition and scope of these kinds of ideas as well as the response they typically receive at first. Bahcall argues that innovations as wide-ranging and world-changing as radar, [restricted term], and computer animation all share a similar trajectory: They began as flawed, incredibly fragile ideas. They were repeatedly shot down or ignored, and if not for a lot of luck and persistence, they would never have made it.

Bahcall’s big idea is that it’s possible to deliberately and systematically nurture loonshots. To do so, he says, requires a specific...

Loonshots Summary Anatomy of a Loonshot

Before we delve into Bahcall’s four rules for nurturing loonshots, it’s worth exploring why loonshots require special care. We’ll briefly discuss the two types of loonshots that Bahcall identifies and why loonshots are so fragile as well as why organizations tend to leave loonshots behind as they grow.

Two Types of Loonshots

Bahcall explains that loonshots come in two varieties: product loonshots and strategy loonshots.

Product loonshots are new inventions or new technologies. For example, Karl Benz’s Patent-Motorwagen is a product innovation. Though others had experimented with self-propelled carriages before, Benz engineered what is generally considered the first practical modern automobile.

Strategy loonshots are new ways of doing business or of tackling a problem. For instance, Ford’s assembly-line production of the Model-T is a strategic innovation. Henry Ford invented neither cars nor the conveyor belt. But by combining the two to massively cut production times and manpower, he created a way to mass produce cars that were consistent and, crucially, affordable to the general public.

Bahcall stresses the importance of paying attention to both types...

Loonshots Summary Nurturing Loonshots: Rules 1-3

Bahcall’s core idea is a set of four rules for protecting and kindling loonshots and for sustaining innovation as a company grows. Bahcall calls these the Bush-Vail rules because he derives them from the examples of Vannevar Bush, creator and head of the US’s Office of Scientific Research and Development (OSRD) during World War II, and Theodore Vail, president of AT&T from 1885-1889 and 1907-1919. To keep things simple, this guide will just refer to Bush while describing the rules.

(Shortform note: We’ve added a fifth rule to Bahcall’s four and included it at the end of this guide. This fifth rule is based on an idea Bahcall develops separately from his four rules. We think it’s important enough to loonshot success to be considered an additional rule.)

Bahcall’s first three rules are geared toward nurturing innovations and helping grow them into finished products. We’ll explore those rules as a group before moving on to rule four, which is more concerned with maintaining innovation as an organization grows.

(Shortform note: Bahcall’s first three rules, in particular, overlap with a lot of other literature on strategy and innovation. Throughout this section, we’ll flesh out...

Loonshots Summary Rule 4: Balance Stake and Rank

Whereas the first three rules all have to do with nurturing innovation, Rule 4 is about how to maintain innovation as a company grows. As noted earlier, once loonshots are successful, they tend to evolve into franchises, replacing all-new innovation with incremental improvement. But Bahcall argues that if you pay close attention to the relative weight that stake and rank have in your organization, you can balance growth with continued innovation. We’ll explain what stake and rank are and how to manage them, but first, we’ll look briefly at the theory behind Bahcall’s ideas.

(Shortform note: Maintaining innovation is only one concern for organizations as they grow. In Start With Why, Simon Sinek points out that growth can cause an organization to forget about the purpose that brought it success in the first place. But even if innovation isn’t your central purpose, the principles Bahcall outlines might help you keep your eyes on whatever it is about your organization that really matters to you.)

Phases of an Organization

One of the central ideas in...

Loonshots Summary Traps That Kill Companies

If you’re trying to build an organization around loonshot ideas, Bahcall’s rules can help—but only if you follow them carefully. Otherwise, you can fall into one of several traps.

Blindspots

Bahcall warns that sometimes, proponents of product loonshots focus on only the newest, biggest, best products or technological innovations and thereby become blind to the innovative strategies that allow seemingly lesser competitors to outdo them.

For a dramatic example of blindspots in action, we can look at the US’s fortunes in the wars that followed World War II. World War II, as Bahcall notes, was in part a war of technological innovation, a race for the newest, best airplanes, tanks, and armaments. The US got good at this game, thanks to the OSRD, and have continued to develop powerful military technologies ever since. But in Vietnam, they encountered for the first time a new strategic innovation in the form of guerrilla warfare against a nebulous opponent rather than open combat against a regular standing army. They were unprepared for this new strategic paradigm, and no amount of technological superiority could carry the day.

(Shortform note: Blindspots can afflict...

Loonshots Summary Shortform Bonus Rule 5: Build a Critical Mass

Separate from his four rules, Bahcall introduces the idea of critical mass as a final component needed for sustainable loonshot development. To explain the idea of critical mass—and how it benefits both innovators and implementers—let’s return to our example of the drug industry as a symbiosis between biotech startups and pharmaceutical giants. As this industry demonstrates, critical mass has two aspects:

One, you need enough loonshots to have a reasonable chance of success. A small percentage of loonshots work out. Those investing in them need to invest in a large number of loonshots to hedge their bets against failure. This is one way that a phase-separated company—or industry—benefits both sides. The ongoing success and stability of the franchise side funds the experimentation of the loonshot side.

(Shortform note: In Antifragile, Nassim...

Shortform Exercise: Does Your Workplace Nurture Loonshots?

Bahcall argues that the balance between loonshots and franchises depends on his four rules. Let’s explore those rules in the context of your own workplace. Remember, some organizations combine both phases, and some industries have both loonshot businesses and franchise businesses that work together. If that’s the case for you, keep that in mind as you answer each question.

Overall, would you say that your workplace is in the loonshot phase or in the franchise phase? Or does it combine both phases in some way? Explain how you reached your answer.