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Comment by jpm_sd | Hacker News Reader

As an Xoogler, I can tell you that promising products that "will never be a billion-dollar business" get killed all the time. $100M in projected revenue? Yawn. Kill it.

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The odd part is that this doesn't select for billion-dollar businesses, it selects for billion-dollar businesses that can be developed with revenue growth that doesn't pass through $100m for more than x-years. Essentially billion dollar rev with discontinuous growth through lower revenue - this seems unnecessarily constrained for any business that plans to be around for the long haul.

Another way to look at it is, how good is your estimator of a billion dollar market, vs how good the estimator of the same is with a prior that the good/service can make at least $100M?

That was true when I was there as well. Organically Google needs to figure out how to create 100M businesses within itself that pay for the organizations that enable them, and staff them for long term success. Doing so would incrementally add a small bit of margin for each one. I expect though they are caught up in scarcity thinking, which leads to bad choices overall.

> $100M in projected revenue? Yawn. Kill it.

They should at least tell us what those projects are so someone can pick up the scraps.

Google inbox. Please. Anyone?

Although I love Inbox, it had no chance of being a $100 million dollar business. It would have been lucky to clear $10 million, even ignoring the fact that nearly all of its revenue would be cannibalized from gmail itself.

The odd part is that they developed a successful blueprint for how to beat their existing Gmail product and are apparently walking away from it. Anecdotal, but I don't know anyone who I introduced Inbox to that does not prefer it to standard Gmail. I wish they would focus their consolidation efforts on their awful messaging mess and leave Inbox alone.

Ah, but worry not, they've introduced many of the Inbox features back into Gmail! Except, you know, they didn't implement bundling, probably the single most useful feature of Inbox.

(If anyone can't tell, this is incredibly frustrating for me, since Inbox is going away soon.)

Ugh, the decision to kill of Inbox is what frustrates me the most. I don't think I can go back to regular mail after this. I'd love a self-hosted Gmail client that functions identically to Inbox, though (and perhaps is pluggable to other mail providers).

I really didn't like Inbox at all.

How on earth does this make economic sense? Normal business operates on return on capital or margins, not overall size.

Google did over $100B in revenue last year. A $100M revenue product would move the needle 0.1%. And that's just revenue - it's pretty unlikely the net margins would beat Google's existing business lines. Meanwhile, it would require a significant amount of manpower, marketing, and support that would otherwise be spent on much larger profit centers. At a high level it just doesn't make sense - you'd need to be running dozens of such products to get any kind of return investors would care about, gumming up the org in the process.

That is what spin offs are for. Let it be an independent company that you still own 49% of. If it fails, at least you got to sell the 51% stake first. If it succeeds, you still own 49% of it.

That doesn't solve the underlying problems of profitability and minimal bottom line impact. A $100M company is unlikely to be profitable for several years, during which time Google has to spend money to get it off the ground and suffer a brain drain from existing profitable products to an unproven subsidiary. Meanwhile, "success" here would still mean < 1% impact to anything shareholders care about... years down the line. It makes more sense to just add some funding to Google Ventures.

Maybe that's opportunity cost working.

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