The interesting thing is how far Loon got before Alphabet plugged in. When Teller first heard the idea, he says, it gave him about a 1 or 2 percent chance of success. When it launched in 2013, which I traveled to New Zealand to attend, after some of its first internet-connected balloons, it had reached around 10 per cent. When he graduated in 2018, Teller thought it was 50 to 50.
But in the last six months, the odds have been restored, as has some version of Grim-Reaper-Ish New York News needle. Loon had two challenges: the technological leap to offer balloon internet and make the business case that people would pay for it. While the technological side solved problems, the business environment became less favorable. In the last decade, much of the underserved world has connected: Internet availability has gone from 75 percent of the world to 93 percent. The rest of the areas are populated mainly by those who cannot afford 4G phones that receive Loon signals or are not convinced that the Internet (which in some cases has little content in their own language) was worth it. Teller realized that Loon was unlikely to ever contribute to Alphabet’s profits. And so the bet was lost.
Loon does leave a legacy. Probably no one has ever spent more money and intelligence on balloon technology, and Loon is constantly setting records to keep them high. He began using sophisticated algorithms, as well as meteorological data from the U.S. government’s Oceanic and Atmospheric Administration to figure out how to circulate wind currents and navigate the sky at 60,000 feet. Just last month, Loon engineers had published a paper on it Nature describing how his technology pioneered deep learning techniques to help his balloons autonomously form networks that thrived in a challenging environment. Another advance of Loon, the sending of high-speed data through light beams (such as fiber-free fiber optics), initiated a separate X project, Taara.
The Fall of Loon is a good opportunity to take a look at X’s successes. Last year, the Moonshot Factory celebrated its first decade. At that time, he was a pioneer in autonomous driving, which is now the basis of the other bet called Waymo; another project, Google Brain, now drives much of Google’s technology with deep learning; and Alphabet still has high hopes for X graduates, such as its medical bet Verily and its drone delivery company, Wing. And still within X are projects that involve robots and food. But it has also populated a lot of costly failures, including now Loon.
But Teller will not call it a failure. Loon, he says, was “a successful experiment.” Considering I had just killed an expensive, high-profile company, I asked him what aThe successful experiment might seem like it. “The real failure is when the data tells you that what you’re doing isn’t right and you’re doing it anyway.” Loon was a success, he says, because once it became clear that it would never become a viable business or solve Internet connectivity, he stopped doing it.
Crazy? That’s the X-shape. “We can’t have access to these truly exceptional opportunities unless we’re willing to make a mistake a lot of the time,” Teller says. Their heads are fine with that. He receives regular criticism from Alphabet CEO Sundar Pichai and CFO Ruth Porat, and says they both continue to support him. How does Teller himself value X’s performance? “Eight out of ten,” he says.
Still, it’s never fun to finish a project. “We wanted Loon to be a beautiful solution to a seemingly insoluble problem,” Teller says.