I believe alpha dogs leaving to do their own thing is quite normal and should be expected. Accepting that some of your brightest talent will leave the nest to pursue their passions should be an embraced value. No hard feelings, okay?

I think Eric misses the point in saying "being part of a startup within Google". How do you stop a monoculture from creeping in and taking over your organization? Big companies have this problem and Google, I would guess, is no exception.

Maybe foster an environment where new ideas (coming from the outside) are brought into the fold (in the form of more startup acquisitions)? I'm sure this causes it's own problems where founders must now deal with the internal workings of a giant acquirer.

I would call this "organizational drag". Too many people with too many inputs into too few decisions. This provides just the right amount of friction to squeeze out anyone who truly wants to scratch their itch. Put another way, if you put up enough barriers, some will attempt to navigate your organizational obstacle course but others will simply see your barriers, and the organization itself, as the problem to solve.

I don't know if funding actual startups would be something Google should look into but I don't think Google could ever bring back that small startup feeling; that's just wishful thinking.