Comment by sergiosgc | Hacker News Reader

Comment by sergiosgc | Hacker News Reader

Bezos is a contender for the best manager of my generation. That being said, don't take these statements as absolute truths. They reflect the very successful strategy at Amazon, but they are by no means absolute.

Examples:

- "(...) keeping our prices very, very low, we earn trust with customers over time, and that that actually does maximize free cash flow over the long term." This is violated by luxury goods. Louis Vuitton purses must be expensive, it's part of their "contract" with their customers.

- "There are two kinds of companies: Those that work to try to charge more and those that work to charge less. We will be the second." The alternative is to deliver ever increasing value, at constant prices, which is the very successful strategy at Volkswagen.

Don't take this as it being my opinion that Bezos is wrong. He's my ideal CEO: long term oriented, customer focused, innovation driven. There are faults at Amazon, but in the grand scheme of things, Amazon is a great feat in itself.

> This is violated by luxury goods. Louis Vuitton purses must be expensive, it's part of their "contract" with their customers.

That's because the actual product you pay for isn't the bag itself, but a symbol of exclusivity.

"ever increasing value, at constant prices, which is the very successful strategy at Volkswagen"

That might be strategy for the VW brand, but VW Group very cleverly uses its huge array of brands to segment the market very nicely (SEAT, Skoda, VW, Audi, Porsche, Lamborghini, Bentley, Bugatti).

Out of curiosity: who else would be in contention for "best manager of the generation"?

The one I admire the most is from a previous generation: Amancio Ortega, from Inditex. The innovations in logistics by Inditex are amazing. As for current(ish), and with a heavy skew towards IT, my list would be, in no particular order:

- Bill Gates, for MS strategy during the 90s. Evil and Borg-esque but ultra effective.

- Steve Jobs, for Pixar and the early 00s turnaround at Apple.

- Elon Musk, not so much for co-founding PayPal, but rather because of Tesla

Now that I'm at it, let me nominate the worst CEO: Eric Schmidt. Title earned for destroying engineer culture at three great companies: Novell, Sun and Google. Novell and Sun tanked, Google will be the first to survive Schmidt's effects, albeit scarred. There are financially worse CEOs, but Schmidt attacked companies that I particularly liked with the same repeat effects.

I thought Google flourished and grew explosively under Schmidt, and engineering in Google was doing great, no?

Nevertheless, all three companies he led had engineer-driven management, with the kind of ad-hoc innovation culture typical of engineering companies, before Schmidt, all three became business-focused and narrow-minded after Schmidt. This results in excellent financial returns in the short term, followed by cliff diving.

Is he responsible? One is bad luck, two is coincidence, three is a trend.

P.S. No, I don't think Google will financially collapse. Not while there is no strong competition on the AdWords space. The change in culture is pretty obvious, though.

Google also had the advantage of original founders who remained extremely engaged, and have re-emerged as leadership - founders who are ultra-talented and ambitious engineers. The X Lab gives Google a place to continue bringing in top engineers regardless of what the Mountain View office is like.

> advantage of original founders who remained extremely engaged

I'm skeptical about whether this is true in a straightforward way.

For one thing, most of the complaining about the (relative) decline in engineer-centric culture at Google has happened since, oh, about six months after Larry returned to the CEO position. More wood behind fewer arrows, big push on G+, more shutdowns, more constraints on 20% time, etc. (... although I have no personal experience of Google under Schmidt)

For another thing, if Sergey is engaged in anything other than his (awesome!) blue-sky projects in X, he puts a lot of work into hiding it. Seriously. Don't get me wrong, I'm willing to give him a thumbs-up, if he's going to keep putting his capital (financial, social, and political) into socially transformative projects. But I would not describe him as engaged with basically anything web-related (search, ads, social, android, etc).

Also, you seem a little confused about X. X is a tiny fraction of engineers, and as such it's not clear what it has to do with "bringing in top engineers". I mean, unless you mean "bringing in top engineers and preventing them from working on money-making projects". And also, btw, it's mostly within the Mountain View office complex.

This post probably gives the wrong impression. I'm long GOOG, and I think X is awesome, and I think Google is still doing more good than harm. But I believe these in spite of the other stuff I mentioned here, not because of "original founders who remain extremely engaged", especially in the context of sergiosgc's comments.

>>And also, btw, it's mostly within the Mountain View office complex. I know that, my main point is that they aren't part of the Google that most people see.

>>Also, you seem a little confused about X. X is a tiny fraction of engineers, and as such it's not clear what it has to do with "bringing in top engineers". I'm also aware of this. Being a tiny fraction of engineers shouldn't preclude it from bringing in top engineers, correct? Top engineers are a tiny fraction of engineers in the total population, so this seems like a good sign to me.

>>if Sergey is engaged in anything other than his (awesome!) blue-sky projects in X, he puts a lot of work into hiding it Again, I don't think this is necessarily a bad thing. I don't disagree that Google is no longer the engineering paradise company-wide that it used to be. However, you worry about not having engineers on money making projects. I disagree that the X lab is not a money making project. They don't have revenue goals and targets in the way that most places would, but I can't imagine something better for Google's long term bottom line than things like Project Loon being successful, or becoming the first mover in the self-driving car world.

>>For one thing, most of the complaining about the (relative) decline in engineer-centric culture at Google has happened since, oh, about six months after Larry returned to the CEO position. You may be right about this. I don't totally know. I do know that Eric Schmidt doesn't have Larry's credibility as an engineer, and this original thread was about Schmidt's destruction of engineering culture, not Larry's. For all the worry about the reduction in 20% time and all the stuff that Google does that drives me nuts (G+, shutting down Reader - that one still hurts), they still have the X lab working on moon shots being driven by a founder. Come to think of it, the X lab may have replaced 20% time as Google's innovation lab (not saying I agree with that, there is a place for innovation and improvements in non-moonshots too, this is just a thought I had as I wrote this out).

I would add that Novell and Sun also failed through a strategy of focussing on enterprise and government market segements. Google is an open question here, but it's something to watch when a company is under Schmidt-control.

Radioactive RAM chips, costing Sun billions, played a part.

"When Sun folks get together and bullshit about their theories of why Sun died, the one that comes up most often is another one of these supplier disasters. Towards the end of the DotCom bubble, we introduced the UltraSPARC-II. Total killer product for large datacenters. We sold lots. But then reports started coming in of odd failures."

http://nighthacks.com/roller/jag/entry/at_the_mercy_of_suppl...

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I hated Novell with the passion of a billion burning novas. As only a NetWare admin could. So I was happy to see them tank.

I vaguely recall that Ray Noorda wanted to take on Microsoft, so went on a spending spree to acquire an Office competitor, completely ignoring their NetWare and GroupWise (?) offerings, allowing Microsoft to get traction in both applications servers and directory services.

Absolutely tue regarding Ortega. One of the case studies that are mentioned all the time in supply chain management. Yet, most people just look at Inditex, say "wow" only to turn around without having learned anything from it.

Regarding the rest, good list. Regarding the previous geneeration I would add the TPS guys from Toyota.

As for Eric Schmidt, I can't neither agree nor dosagree since I'm lacking the necessary insight.

> - Steve Jobs, for Pixar and the early 00s turnaround at Apple.

I'm afraid the case for Steve Jobs is stronger than that. He founded Apple and made it successful. Then, while others drove it into the ground again, he made Pixar successful (not to mention minor success with NeXT), then turned Apple from a company in serious trouble, into the biggest company in the world.

By all accounts he was a tremendous jerk, but you can't argue with that level of success.

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