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I'm surprised you are allowed to take your work from within Google and turn it into a personal startup.
They might have gotten permission, and /or gave Google a %.

I think in most companies, what you do in company time, belongs to them. That's very reasonable, since you are getting paid already

Google Ventures has invested in the company so I suppose they made a deal.
The whole premise for the purpose always bothers me; the argument that with population projections what we have to do is accommodate unsustainable growth with "sustainable" buildings.

There is something really weird about humanity's inability to even bring up the fact that we are reproducing at rates that are inherently unsustainable and could even lead to become a catalyst for extinction. There is no sustainable building method or process that will do anything more than prolong the inevitable. It's a rather odd perspective in, at least the USA, that "green", environmentally friendly, and "sustainable" are nothing of the sort. "Green" means using images of leaves on high gloss unnecessary packaging; "environmentally friendly" means using some wood with abandon as to where it's from; and "sustainable" means simply continuation of anything, whether good or bad.

The sustainable design issue has actually already been solved in many ways; it's just that the solutions don't fit in with people's unwillingness to give up anything.

Can you name a modern state that is reproducing at above levels that sustain the population numbers? (Immigration doesn't count)
NZ's fertility rate is below replacement (it needs to be a little more than 2.0).

If you look at raw deaths / birth, Japan only crossed into negative growth in 2008. But it's had lower fertility (below 2.0) since the mid 1970s.

If natural increase is driven by people living longer, it's only going to happen for a while.

Fertility rates are actually dropping and have for a few decades [1]. It takes time for that to actually translate into stabilising population. Its like throttling down the engine on a spacecraft, your total altitude (population) will continue to rise even though the acceleration (fertility rate) has dropped.

So we have to equip the world to provide for the great grand children of the fertile people from forty years ago. That growth is unavoidable, even with lower levels of fertility. Sustainable design is just the optimal most efficient way of dealing with that growth.

[1] http://en.wikipedia.org/wiki/Total_fertility_rate

We are already at unsustainable population levels and the majority of populations are still growing and countries with negative population growth are constantly urged to promote population growth. I realize that fertility rates are dropping and I realize there is inertia, but decreasing acceleration is still not negative acceleration.
But my point is that there is very little you can do to alter a growth that is already baked into the system. A country with a large youth population will continue to increase in size even if they only have two children per family.

I agree that humanity has a very negative ecological impact. But that is a basic facet of human society, not population growth. All industrial economies devastate the native ecosystem in which they exist. Forcing people to abandon the chance of children does not change that. Your argument is trite and does not offer any real insight.

Even at zero population growth, old buildings wear out and need to be replaced. Especially when we build them like most postwar US construction. Likewise, especially in harsher climates, replacing worn-out older buildings with passivhaus-grade buildings will reduce energy consumption in the long run, and it's impractical to upgrade many older buildings to such a level of insulation.
Is anyone else slightly disappointed about this coming out of Google X? Don't get me wrong, it's a good business idea, bringing together otherwise disparate data sources, capturing tailwinds of sustainable building trends, seems like a differentiated product etc. etc. but it's not really the "moonshot" or game changer that Google X purports itself to be developing (potentially why they spun it out?).

I read this article recently which I thought was very good, but it paints a very different picture of the types of things that should be coming out of Google X. This type of Company is something I would have expected out of an incubator.

http://techcrunch.com/2014/03/28/meet-astro-teller-head-of-m...

Anyone else feel this way?

Maybe that's why it's no longer part of Google X.
Have you heard of marketing?
Your condescending sarcasm aside, there is no reason for them to over market themselves or pursue pedestrian projects here (again, I agree this is a good business, but just relatively pedestrian for the Google X mission statement). Here are the reasons that would make no sense:

1) This is a pure cost center for Google (and a small one by their standards) and it doesn't report separately, so there is no reason for them to take lower risk projects to try and make it look like they are generating success (like there would be at a VC or incubator who is concerned with profitability). And for the Google X mission statement, I wouldn't even consider this a success (this would be like a VC fund backing a small business that was profitable but never had a chance of generating exponential growth, it's just not in the investment / research profile)

2) They have Google Ventures to fund something like this if it was an idea they want to pursue (and as I said up top and was seconded below, that may be why they are spinning it out). But that raises the question of why this was ever something they undertook at Google X in the first place? Another possibility here is they took a shot at something much bigger and found that wasn't viable, and fell back on this portion of it which was viable, then decided to spin it out. That would actually make a lot of sense (just thinking as I'm typing here)

3) If for some reason they are just over marketing Google X and it's just really a pedestrian incubator for some projects... well, going back to the original question I posed, i would find that very disappointing!

Well the way I see it (speculatively from the outside), the "moonshot" (throws up in mouth) is just the thing you write at the top of the whiteboard. But what you're really up to is solving the 50 relatively smaller, domain specific problems that need to be solved in order for the "moon--hghhh" to be achievable.

This green architecture software is likely a solution to one of those smaller problems. The team was probably so happy with their work they decided they wanted to pursue it as a standalone company. Google let them spin it out and invested seed money as well.

It's funny that you mention moonshots. Check out this list of products that spun off from NASA research:

http://en.wikipedia.org/wiki/NASA_spin-off_technologies

The list includes stuff like invisible braces, longer-lasting radial tires, foam mattresses, cordless vacuum cleaners, and remote control ovens. Maybe useful-but-not-game-changing projects are an expected byproduct of moonshots.

Making sustainable design the norm may well be a moonshot. I guess it's not glamorous, but it is the sort of thing that badly needs to be done.