Google, like many other big corporations, is signaling the end of its big ideas innovation lab. Alphabet’s famed innovation and design lab, X, recognized for pioneering projects such as Waymo and Google Glass, is now pivoting towards transforming its projects into standalone startups.
X is a diverse group of inventors and entrepreneurs who build and launch technologies that aim to improve the lives of millions, even billions, of people. Our goal: 10x impact on the world’s most intractable problems, not just 10% improvement. We approach projects that have the aspiration and riskiness of research with the speed and ambition of a startup. - X Company
I was already signaling this move back in January, it's now the last nail in the coffin. This shift is a strategic response to heightened financial scrutiny and the pressing need to align innovative pursuits with viable business models. It's also a testimony of how self-proclaimed boundless creativity doesn't deliver jack if it's not properly connected to strategic goals aligned with the core business.
Like others, the X lab's grand "moonshot" ambitions felt more like an expensive playground for bored (highly intelligent) employees and, at best, a marketing prop to tell stories about the brand. Back to reality, the lavish funding and creative liberty that characterized the lab’s operations are being tempered to conform to corporate profitability objectives. Many high-profile initiatives that symbolized Google's cutting-edge image are being spun off into separate entities or simply scaled back significantly.
This evolution reflects a wider trend across Silicon Valley, where other major tech firms are also rethinking their ambitious projects in light of fiscal constraints and... a lack of impactful deliverables!
- WarnerMedia Innovation Lab: It aimed to integrate AT&T technology with WarnerMedia entertainment, was an ambitious project that has not seen much activity recently, suggesting a scaling back or shift in focus.
- Microsoft’s Silicon Valley Research Lab: Known for its role in advancing computing technologies, this lab was shuttered as part of a broader reevaluation of Microsoft’s innovation strategies.
- Disney’s Research Lab: This lab was responsible for developing cutting-edge entertainment technologies but was closed as Disney refocused its innovation efforts more tightly around its core business areas.
- Coca-Cola’s Founders Initiative: Aiming to incubate new ideas within the beverage sector, this initiative was closed as Coca-Cola shifted innovation back towards its main product lines rather than external startups.
- IKEA’s Space10: The independent innovation lab based in Copenhagen is closing after a decade of operation. Founded in 2014 in collaboration with the Danish design collective ArtRebels, Space10 aimed at exploring and developing future-oriented designs and solutions, particularly around sustainable living and smart home technologies.
I would say I'm not very surprised, as the trajectory of these labs was rather obvious if you'd paused for a minute and considered their overall utility (see above: core business!). But it's going to be a difficult moment for several of the more modest corporate innovation and design labs that used these prominent initiatives as the core justification of their own existence ("See, the big boys are doing it!").
There's an upside, though.
The remaining corporate labs do now have a resounding signal: getting their strategic role together and positioning themselves as key contributors to the core business is now non-negotiable. And the good news is that they're often not that far... they just were never really asked about directly doing that.