Innovative risk taking or hubris?
Innovation and risk-taking is part of a manager’s job. But sometimes hubris, which is excessive pride or overconfidence, might cause managers to make foolish mistakes. It is sometime difficult to distinguish between smart projects and foolish hubris-driven projects.
Googles founders, Larry Page and Sergey Brin, invested in a number of so-called “moonshot” projects in a special division of Google called X, sometimes called the Moonshot Factory – accounted for as “Other Projects” in financial statements. The 8 most famous moonshot projects are listed in the article below:
- Loon: using high altitude balloons for internet
- Makani: using kites to harness wind for energy
- Google Glass: eye glasses with a virtual reality display
- Free Space Optics: using lasers to transmit internet
- Waymo: self-driving cars
- Wing: flying drones to deliver goods
- Verily: smart contact lenses for medical diagnosis
- Malta: energy storage using molten salt
In 2018, the two founders of Google stepped down as co-CEOs. The new CEO, Sundar Pichai, shut down a number of X projects within 18 months of becoming CEO.
Other Bets lost $4.8 billion in 2019, up from $3.4 billion in 2018. Google had revenues of $160 billion and $34 billion net income in 2019. A number of these projects, costing over $8 billion of investment, were shut down by the new CEO Sundar Pichai. Two examples of shutdown projects are listed below:
Some projects, like Waymo are still active and ongoing:
Waymo is valued at $30 billion, but used to be valued at $200 billion – value has dropped as the difficulties of self-driving cars has slowed implementation. Waymo is currently trialing its technology in San Francisco.
Question: Do you think that the Loon and Manaki projects were high risk mistakes arising from the hubris of the original founders, or were they smart projects with high potential?