The New Moonshots

Distribution — not cash — will power the innovation hubs of tomorrow

Right about now, product leaders at startups are dreaming up, getting buy-in, and allocating budget for “moonshot” projects. And in a few months those projects will be the first ones on the chopping block when a sales target gets missed or priorities shift. I know because I’ve been that product leader, and the person tagged to run the moonshot project. 

The drive to build moonshots comes from a genuine need for companies to transform their existing business, and because it’s fucking cool when it works. Skunkwork stories are the backbone of Silicon Valley lore — Bezos and the Kindle, Jobs and the iPhone, the endless breakthroughs of Bell Labs and Xerox PARC.

Many of the moonshot success stories come from companies that had tons of extra cash: Amazon, Bell Labs, Apple, etc. In fact, when people talk about building skunkworks projects or “the Bell Labs of the future” the assumption is often that the key is to allocate a big sack of cash and make sure it is insulated from the rest of the company. 

But what happens when the cost of developing a new product goes down by 100X or more thanks to AI? I think we’ll see a different scarce ingredient to launching moonshots — not cash cows, but distribution cows. And with any luck that means leaner startups will be able to follow through on their yearly goals of doing something big. 

One pizza slice teams

Amazon famously coined the “two pizza team” as a heuristic for the max size of a team shipping a new product — only the number of people that can be fed by two pizzas. Great teams definitely make the best products, but I think we’ll see a lot more “one pizza slice” teams shipping skunkwork projects at early stages. The mythical man-month is real and getting real-er.

To state the obvious, the speed at which AI is bringing down the cost of product development is truly nuts, especially in software. If you build your workflow end to end with a goal of using AI to move faster, the speed increase is already 10X or more. I know because we are literally doing this all day every day now, shipping complex products for people in a few weeks. It’s wild. Software is the tip of that spear, but speed improvements will tell the story of production in every industry over the coming years.

You would be right to point out that launching a new product requires a lot more than just building the product (it takes marketing, sales, etc) but it’s worth noting that historically those have not been the most expensive part. And on top of that, AI speed increases are coming for the work of building marketing content, creating contracts, and the other things you need for a launch.

So it may not actually be one person teams yet, but that’s where we are headed. As the world of indiehackers will show you, you can ship incredibly fast if you are fully autonomous and have a baked-in audience to shorten the iteration cycles. And the quality and complexity of products you can ship on your own or in a very small team is going up at a mind-boggling rate. I’m sure the amount of money successful AI-augmented indiehackers are being offered from companies to join full time is getting crazy — expect that to accelerate quickly.

There’s no AI for distribution

So if it doesn’t require a ton of money or employees to launch a successful moonshot, what does it require? Outside of a good idea and a talented person or two to ship it, the obvious answer is distribution.

Distribution has always been the silent killer of most new products, and that only gets worse as it gets cheaper to build. Things are about to get ridiculously crowded, and any solution that automates distribution will be quickly commoditized. So the Bell Labs of the future won’t need a cash cow business to spin out moonshots, they’ll need distribution cows.

The real unlock is that unlike cash, distribution doesn’t get “spent” when you use it to launch a cool new product. In fact it’s the opposite, which is an area where creators are actually driving the trend. The pace of new product launches for a creator like Mr Beast would put a lot of Silicon Valley startups to shame, and it’s because he is thinking from a distribution first standpoint — more products that drive distribution, more distribution, more ability to launch products.

So not only will companies with distribution be able to launch moonshots, they might be left behind if they don’t create new products to preserve and extend their distribution advantage.

When cash is counterproductive

When startup nerds talk about distribution advantages, they often point to Google or Microsoft and their huge existing customer/user bases and giant sacks of cash. But while there are some examples of those companies incubating moonshots, it’s hard to argue that they have been super successful in incubating new products relative to the money and effort they’ve put into it. What they’ve been better at is acquiring/fast following new products, which is a separate beast. 

It’s well documented that companies like Google with a money printer struggle to create the same urgency and culture around shipping new products to market. Pressure creates diamonds, and one of the things I’m most excited about is that startups that are strapped for cash should actually be better moonshot factories provided they don’t have to keep killing the moonshot projects when money gets tight. 

Building moonshot muscle

When I think back to the moonshots I helped plan, run, and often axe at previous startups, many of them still feel like innovative opportunities that just never made it to market at all. And maybe if we had the tools available today (or a great roboagency :) some of them would have found the light of day. That’s incredibly exciting to think about.

Of course, this isn’t just a tooling problem. The ability to ship products 100X cheaper will be a breaking change for many industries, and require a whole new cultural approach to what it means to be lean, focused, and fast moving. 

My suggestion to founders and companies is the same advice I’m giving myself. Just work backwards from the ability to ship new products 10X faster than you have been before. However you do it is fine, but the forcing function is what matters at the moment if you want to make sure to get into the right position as this huge wave crashes.