Wednesday, November 29, 2023

Alphabet makes the loonie fail, but won’t call it a failure

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What’s interesting is how far Loon got before Alphabet pulled the plug. When Teller first heard the idea, he says, he gave it about a one or two percent chance of succeeding. By the time it launched in 2013 – which I traveled to New Zealand to witness the sequel to some of its first internet balloons – it had dropped to around 10%. At the 2018 graduation ceremony, Teller thought he was fifty-fifty.

But in the past six months, the odds have been reset, like a grim version of the New York Times needle. Loon had two challenges: the technological leap to deliver the internet by balloon, and the business case that people would pay for it. As the technical side solved the problems, the business environment became less favorable. Over the past decade, much of the underserved world has become connected –internet availability has increased from 75 percent of the world to 93 percent. The remaining areas are mostly populated by people who cannot afford 4G phones that receive Loon signals, or who are not convinced that the Internet – which in some cases has little content in their own language – is worth it. hardly. Teller realized that Loon was unlikely to contribute to Alphabet’s profits. And so the bet was lost.

Loon leaves a legacy. Probably no one has ever spent more money and intelligence on balloon technology, and Loon has consistently set records to keep them in the air. He broke new ground using sophisticated algorithms along with weather data from the US government’s National Oceanic and Atmospheric Administration to understand how to overcome wind currents and navigate the sky at 60,000 feet. Last month, Loon engineers had an article in nature describing how their technology pioneered deep learning techniques to help their balloons autonomously form networks that thrive in a harsh environment. Another breakthrough from Loon: sending data at high speed via brays of light (like fiber optic without fiber) – started a separate X project, Taara.

Loon’s Fall is a good opportunity to take a look at X’s accomplishments. Last year, the Moonshot Factory celebrated its first decade. At this time he was the pioneer of autonomous driving, which is now the basis of the Other Bet called Waymo; another project, Google Brain is now powering much of Google’s technology with deep learning; and Alphabet still has high hopes for X graduates like its medical bet Verily and its drone delivery company Wing. And still inside X are projects involving robots and food. But he also populated a bunch of expensive chess, now including Loon.

But Teller won’t call it a failure. Loon, he says, was “a successful experience”. Considering he had just killed an expensive and prestigious company, I asked him asuccessful experience might look like. “The real failure is when the data tells you that what you’re doing isn’t the right thing, and you do it anyway.” Loon was successful, he says, because once it was clear that it would never become a viable business, nor resolve internet connectivity, he shut down his business.

Crazy? This is the X way. “We can’t have access to these truly exceptional opportunities unless we are willing to go wrong for a decent amount of time,” Teller says. His bosses are cool with it. He receives regular criticism from Sundar Pichai, CEO of Alphabet, and Ruth Porat, CFO of Alphabet, and says the two continue to support him. How does Teller rate the performance of X? “Eight out of ten,” he says.

Still, it’s never fun to finish a project. “We wanted Loon to be a nice solution to a seemingly intractable problem,” Teller says.

Now someone else will have to fix the problem. A few dozen Loon balloons are still in the air. Over the next nine months, the remaining Loon-atics will painstakingly collect them when they sink into the sunset. X will be on its next crazy project, and Alphabet will keep rolling the money. “You can’t make loons,” Teller said, “unless you’re ready, when they’re not working, to just say, ‘Okay, let’s start over and do something else.’”


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