Google’s parent company Alphabet has announced that it is spinning out its experimental Project Wing and Project Loon programmes to become fully independent businesses.
Wing becomes Alphabet’s drone delivery company, while Loon will create WiFi balloons for mobile internet access.
The latter made headlines last year when it came to Puerto Rico’s aid after Hurricane Maria hit the country and wiped out 90 percent of the cellphone infrastructure. Loon will now work with mobile network operators worldwide to bring internet access to people in remote or poorly connected areas.
Loon’s first commercial deal will be with Kenya Telkom to beam high-speed connectivity over rural and suburban populations.
Project Wing’s market explorations to date have included studying whether defibrillators delivered by air can save lives, delivering lunch to hungry Virginia Tech students, and goods to people in the suburbs of Canberra, Australia.
Wing’s aim now is to improve the speed, cost, and environmental impact of transporting goods, while also creating an unmanned-traffic management platform to safely route drones through crowded skies.
Both ventures have been part of Alphabet’s research division X, previous ‘graduates’ from which include self-driving unit Waymo, cybersecurity company Chronicle, and Verily Life Sciences.
“Now that the foundational technology for these projects is built, Loon and Wing are ready to take their products into the world,” wrote X CEO (aka ‘Captain of Moonshots’) Astro Teller in a blog post. “This is work best done outside of the prototyping-focused environment of X.
“In a lot of ways, they’re representative of any X team’s path to a moonshot: the journey is rarely predictable and it’s never easy,” he continued.
“Today, unlike when they started as X projects, Loon and Wing seem a long way from crazy – and thanks to their years of hard work and relentless testing in the real world, they’re now graduating from X to become two new independent businesses within Alphabet.”
Alastair Westgarth becomes Loon’s CEO. Westgarth joined Alphabet last Spring and previously headed cellular antenna company, Quintel.
James Ryan Burgess is the new CEO of Wing. Burgess was co-head of the project within X alongside Adam Woodworth, who now becomes CTO.
Alphabet currently reports these businesses under Other Bets, which collectively brought in revenues of $150 million in Q1 2018, with operating losses of $571 million. Now, as standalone companies, Wing and Loon will manage their own finances.
Internet of Business says
Like Google before it, Alphabet has a history of allowing innovation to flourish throughout its organisation, rather than imposing it in a traditional ‘top down’ structure. This hothouse approach means that new ideas can be nurtured until they begin to bloom, after which they are moved into a hothouse of their own and given the space and nourishment to thrive.
By comparison, the ‘maverick CEO’ approach – of which Elon Musk of Tesla, Space X, and the Boring Company is the current poster boy – is a riskier proposition, as it aligns a leader’s ventures too closely with his or her own ideas, charisma, and drive, the flip side of which is often a desire to control their own image, micromanage, see outspoken voices as threats, and be constantly in the spotlight.
And if and when the maverick leaves, what then?
In this sense, Alphabet is like Silicon Valley itself, where a portfolio investment culture allows for multiple failures in the hope that any singular success will more than compensate backers. There are single venture capital offices in the Valley that plough more money into startups than entire nations do.
The US remains the world’s largest economy, though China is hot on its heels: in the 1990s, the US economy was 15 times larger than China’s, but today it is only 1.5 times larger. However, the Silicon Valley/Alphabet model remains the US’ big advantage over China, where the government is, in a sense, the equivalent of a controlling, micromanaging CEO.
Other nations and companies could do well to learn from Alphabet: from the concept of a company as a collective, a shared innovative venture in which anyone with a good idea can succeed.
That’s not to say it’s perfect. As Internet of Business reported recently, Google was recently shamed by its own employees into adopting a more ethical stance on AI. But arguably that proves the point: employees felt they should speak out, and did, and the company listened.
Not that the maverick CEO is automatically a bad idea, however. Sometimes it takes an imaginative, driven leader to see that received wisdom is not always right. Being the tail that wagged an old, tired dog has a long history in the Valley, too.