Google’s Greatest Strength May Be the Luxury of Failure
blogs.wsj.com
blogs.wsj.com
That would be an interesting conclusion if there was a good reason to believe it, but the article didn't make much of a case. How many of Google's off-the-wall projects are contributing to their 30% year-over-year quarterly revenue growth? Most of the projects mentioned were either market failures or haven't been released yet. Android was clearly a success, but it wasn't a great example of innovation: it was basically a clone of a successful existing product.
There's probably a more prosaic explanation for Google's success relative to Facebook. Both companies make most of their revenue from advertising, but Google developed AdWords, which leveraged Google's search infrastructure to became an essential piece of infrastructure for the buying and selling of ads. It's hard to name any other company that got rich off of web ads besides Google. Google is entrenched in the fabric of the internet, while Facebook is an upstart that's primarily just a website, like Yahoo was 15 years ago. At that time, Microsoft was the giant that owned the critical infrastructure, and they were doing very similar things as Google is now: Microsoft created MSN to compete with AOL and Yahoo; Microsoft leveraged its infrastructure to crush a threat from an upstart competitor -- Netscape. Building out, as much and as fast as you can, seems to be the winning strategy when you are in a position of overwhelming dominance as a result of owning essential infrastructure.
The "Luxury of Failure" is the actual lesson here. You get the luxury of failure when you own a revenue stream that's big and entrenched enough that you have the luxury to do essentially anything you want, even lose money. It's hard to compete against that.
I think the safest way for Google to make money would be to not innovate or create any off the wall projects, and then just return the money the money to shareholders through dividends or share buybacks.
Just looking at the current stock price of Google $909 and Earnings per share of $33, this means that IF Google returned the entire earnings to shareholders it would take 27 years for the shareholders to get their money back and THEN after this 27 years they would start to get a return on their investment. This assumes no growth, and Google has grown significantly but there is no guarantee they will grow in the future. Even if they do grow significantly it will still take a very long time to get your investment back.
There are unknowns that could completely disrupt Google's business models for example what if all search became voice based (siri-like) with better AI. Or what if a competitor develops much better AI capabilities into their search.
You figure, basic economics says that if the cost of failure is low, you should expect lots of failures. It's not the "luxury of always succeeding."
>> There are unknowns that could completely disrupt Google's business models for example what if all search became voice based (siri-like) with better AI. Or what if a competitor develops much better AI capabilities into their search.
Google has fended off serious competition before, and if a start-up came out with a better search idea, Google would acquire them.
Considering that the author points to Motorola and Facebook Home as wins, his grasp of the tech scene seems rather weak.
For example, the utter recklessness involved in deploying calibration scores and shuttering 20% time is deplorable. That's an extreme lapse of professional responsibility.
(Sorry if this irritating, but as a matter of principle, I must keep doing this until Google does the right thing and one of the two founders issues a formal apology, and not only to me but to thousands of other affected people.)
I have an important job to do, which is to try to save Google (although I will probably fail) from the people who are trying to destroy it. Even though I left that place and will almost certainly never go back, it's too important a company to let it fall to ashes.
The heart of science is running experiments, and if Google can't run experiments or pilots, it will fail to the innovators dilemma. Our democracy is similarly unable to run experiments to test out policy, which was another thing Larry talked about, as a result, we argue over the effects of policy without doing anything. States were supposed to be the laboratories of democracy, but even on the state level, hardly any experiments are conducted.
The idea that you should only launch services you plan to run forever is a plan for stagnation and death.
Calibration scores (secret performance reviews that happen in the Perf Room-- yes, Google has a physical place for "calibration" that is actually called "The Perf Room") are not experimental technology or product. They're an experiment (and a failed one) on people. Different rules together.
I realize you worked there for a few months a few years ago, but I think someone might have been pulling your leg if they told you that phrase. (But you're right, like most meetings at Google, calibration meetings do happen in rooms. They're just normal conference rooms, though. Nothing special.)
For everyone else: calibration is a process where other managers at Google cross-check the performance scores given to employees across different teams and parts of the company. We do this so that an individual manager can't introduce undue bias or play favorites, and so an engineer at a given level in one part of the company is more or less the equal of an engineer at the same level in another part.
Calibration is one part of the system I think works really well, much better than any other place I've worked. In fact, I think more companies might want to emulate it.
If people actually get together in conference rooms to conspire against their employees and wreck peoples' careers, as you've admitted they do, that's not only wrong but a sign that lots of time is being wasted.
From the description, calibration seems to address the issue of consistent assessment across the company. Open allocation, whatever else it might have going for it, doesn't seem to do that (and for open allocation to work effectively in a large organization, consistent assessment would seem to be, if not essential, highly desirable; even without headcount concerns, churn between projects and getting new people up to speed is a cost that needs to be justified by expected value.)
> If people actually get together in conference rooms to conspire against their employees and wreck peoples' careers, as you've admitted they do
That's actually not what the poster above you said, and I really think that if you can't read anything about Google without being distracted from what is actually said by the white-hot heat of your pre-existing hatred (however justified that hatred moght be), you probably should just avoid participating in any discussions about Google, because you aren't going to be able to contribute productively.
Its probably not healthy to delude yourself into thinking you have an "important job" that centers around your -- clearly quite bad -- relationship with Google.
If you want to show the error of Google's ways, the approach you've been taking on HN simply isn't it; if you could manage the emotional distance to try rational analysis and argumentation I'd suggest that, but it doesn't seem like that is likely. Perhaps try doing something unconnected with Google that demonstrates a better way, and point to that.
Dude google is not going to change or issue an apology because a former employee rags on them on the internet... you do realize this right?
"I must keep doing this until Google does the right thing and one of the two founders issues a formal apology, and not only to me but to thousands of other affected people."
I don't mind his Google bashing all that much. I just hope that he's accepted the futility of it. He can't really do any more damage to his reputation so he may as well keep going. This is a good place to broadcast to prospective/current Google employees. There could be people reading here who've already been slotted and don't even realize it. Whether Google accelerates your career or uses you as a disposable code monkey is determined entirely by their incentives. How would it benefit them to tell an under-performer that they're not going anywhere? Using the ambiguity of an eventual promotion as an implied carrot would generate better returns on their investment. It sounds like it'd work pretty well actually... Use Google's reputation to bring on a flurry of the most desirable new graduates and use them to do grunt work while they're motivated to prove themselves. Promote the top performers to "Real Googlers". Keep the middle around until they run out of steam or quit in frustration. Google gets cost effective grunt work and a larger share of the very best talent as a long-term strategic advantage against Apple/Microsoft/Facebook. If michaelochurch is as abnormally dauntless/foolhardy as he appears to be this could be a really big problem. Most people negatively affected probably go the "professional" route and quietly move on.