How to Build a Company That Never Grows Old: Lessons from Loonshots

Unlock the Blueprint for Lasting Innovation and Agility

Why do so many companies lose their creative spark as they grow? The answer, according to Safi Bahcall’s 'Loonshots,' lies not in the personalities of leaders or the culture of a company, but in the hidden science of group behavior. Drawing from the physics of phase transitions—the same principles that explain why water turns to ice—Bahcall shows that organizations can suddenly snap from flexible and innovative to rigid and bureaucratic with only minor changes in incentives, structure, or group size.

The magic number, Bahcall notes, is often around 150. Below this threshold, teams are nimble and creative; above it, bureaucracy creeps in. This insight is crucial for leaders who want to build organizations that stay young at heart. The solution isn’t just about hiring creative people or fostering a fun culture. It’s about structuring teams so that the incentives of artists (those who dream up loonshots) and soldiers (those who scale and execute) are aligned but distinct. Both groups are essential, and both must be respected.

The Bush-Vail rules, inspired by legendary leaders like Vannevar Bush and Theodore Vail, provide a blueprint for balancing these needs. Separate the phases of innovation and execution. Create dynamic equilibrium by cycling ideas and feedback between the two groups. Avoid letting one side dominate: too much chaos, and nothing gets done; too much order, and nothing new emerges. The most successful companies, from Bell Labs to Pixar, have mastered this art of organizational gardening.

Bahcall’s examples are vivid. During WWII, the military’s innovation engine succeeded not by centralizing power, but by creating small, focused teams with clear missions and the freedom to experiment. Bell Labs, the birthplace of the transistor and the laser, kept its creative teams separate from its operational arms, allowing each to thrive.

But dynamic equilibrium isn’t just for giants. Startups, too, must avoid the trap of becoming either too chaotic or too rigid as they grow. By recognizing the signs of an impending phase transition—slowing innovation, rising politics, or growing silos—leaders can adjust structures and incentives before stagnation sets in.

The lesson is clear: to build a company that never grows old, you must engineer serendipity, respect both loonshots and franchises, and manage the delicate handoff between the two. The future belongs to organizations that can balance the wild and the disciplined, the new and the proven. 1 2 4