How to fix Google
Break it up into smaller companies.
Companies are a lot like people. They have values, direction, vision, work ethics, relationships, desires, and on some level even emotions. They apologize when they mess up, they brag when they succeed, they occasionally make jokes. And this is good, because people have evolved to be creative specialists, many of whom make the world a much better place.
But there are some key differences. One of those is that almost every company gets boring with age. It’s hard to relate to now, but IBM used to be a very cool company. Electronic Arts used to be innovative and risky. Microsoft used to be adroit and unpredictable. And Google used to be awesome.
A lot of companies are built around one or two people. Bill Gates made Microsoft, Larry Ellison made Oracle, Steve Jobs made Apple. As far as these people are truly controlling their companies, they tend to create success. This is especially clear when we look at how well Microsoft or Apple has done with or without Gates/Jobs — the correlation is clear.
Why do companies get boring? I can tell you firsthand. I’ve worked at Microsoft and Google, and I have many friends with a lot of combined work experience at most of these places.
These places get boring because they own more than they use. Think of all the crap you have at home that you never use. The pile of unread magazines, the orphaned remote controls, mostly-blank notebooks, the unused gadgets you paid too much for to throw away, the presents from friends you feel guilty getting rid of. This stuff builds up, and adds constraints to your life. Everyone does it, so it doesn’t feel like anything’s wrong. It’s just human nature that this happens.
In software companies, they get security reviews. They get deeper hierarchies, everyone with veto power. They get more PM’s and managers. They get more designers, more hardware, more tools, more buildings, more partnerships, more half-done projects, more directions. More of everything. And everything has an expectation pricetag, a cost on the future. If you’re Google, and you have a mail site and a photo-sharing site and a social infrastructure, and if you want to compete with Instagram/Picplz, you can’t just build an iPhone app. You have to integrate with your internal social stuff, you have to integrate with gmail and picasa and convince your PM’s and your manager and his/her manager and a few VP’s that this is a good idea. You have to convince security you know what you’re doing, and follow login protocols. You have to wait for three other projects to finish, each of which change their specs and deadlines continuously. The list goes on.
For software companies, age is a blanket of barnacles. The ones that survive have figured out how to keep moving despite the barnacles. The best ones figure out how to keep the barnacles to a minimum.
Which brings me back to fixing Google. I care about Google because the core of the company is pure gold. They have a brilliant, community-constructive attitude. They love to make things, and they love to make things in a way that has historically vastly improved our perspective on what is possible with technology.
Yet they are mired in cruft. They have far more resources than they can cohesively use.
The solution is simple yet daunting. No one person or company should own all that stuff. I’m not saying throw it away. I’m saying, break the company up into sister companies. A conglomerate of smaller companies with unusually-friendly terms amongst them. Imagine you and your ten best friends all have separate startups, with full profit sharing and mutual open source. You don’t have any obligations to your friends to do work for them, but you will naturally look for self-benefiting ways to work with them.
How small should the pieces be? Here’s an acid test: can one person keep in mind a single cohesive idea that encompasses everything the company does, even at a detailed level? This person should be able to describe in an hour how every single project in the company fits into the main idea of that company. If you can do this, then the company has returned to a low-barnacle state. The obligations are minimized, and the energy can go toward creativity instead of constraint-grappling.
That’s the idea.
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I want to add a note about why anyone should listen to me. I’m not a Bill Gates or Steve Jobs. I haven’t led a smashingly successful startup. But I have been paying close attention to the software industry for about 20 years, and I’ve been working within it (counting school internships) for close to 15 years. I am running my own company now, and I’ve been thinking about software entrepreneurship since I was a kid. I care deeply about the success of the industry as a whole, how it affects the world, how well Google does in particular, and how myself and my friends can make a difference in all of this. A lot of people care about Google, but most of those either work there, or are basically fans. I don’t fit cleanly into these categories – my personality is averse to opinions formed out of sentiment. So I offer a combination of detailed technical knowledge of how these companies work, what they do, who works there, aspirations for the projects at these companies, and a penchant for analytic honesty. I’m calling it like I see it, and the cruft is killing a lot of the awesome Google can still have.
March 31st, 2011 at 4:46 pm
How could they subsidise the non-revenue-generating bits if they broke the company up?
Ads pay the bills while they look for the next PageRank.
March 31st, 2011 at 5:28 pm
What does Larry Page need to do to bring Google back to its startup roots?…
Here is a similar answer: http://tylerneylon.com/b/archives/118...
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March 31st, 2011 at 6:43 pm
I’ve seen “break it down into sub-companies” suggested for many large cos, but the rationale is usually that competition amongst them will enhance performance. You seem to be suggesting not to actually break into competing companies, but into a partnership.
Sounds like an idea worth discussing.
I would ask, though: What is the difference between a partnership and a company? I mean, i would guess there are whole teams into Google dedicated to telling everyone you don’t need to feel responsible for the cruft and that you should feel free to propose ideas that do not fit into the overall scheme. The cruft does not exist in small companies, but add one company dedicated to better coordination between the other companies and it all ends up exactly where it began. It might even become a layer of meta-cruft or something…
March 31st, 2011 at 7:38 pm
sounds like Virgin’s model
April 2nd, 2011 at 8:51 pm
I’m proposing that they share profits. Currently a very small number of revenue streams covers all projects at Google. They can continue to do this with multiple companies. It is unusual, but there’s nothing to make this impossible. The benefit would be that each individual company could have a clarified and more focused sense of purpose and identity. Their value, within a set of sister companies, need not be value in direct revenue, but in what they contribute to the system as a whole. For example, gmail can be seen as an independently great product that contributes to customer loyalty. In this case, you could view customer loyalty as a value (although gmail also offers rooms for ads as well).
May 3rd, 2011 at 9:53 pm
@Marcio, the idea is indeed not based on internal competition (although that is very interesting) but about an obligation-free sense of cooperation. I wish I could offer some examples of companies that have really done this, but I’ve never seen it before. A halfway example could be the partnerships that go into McDonald’s. Many McDonald’s locations are independently owned, but they must abide by many rules to use the brand. I am guessing that McDonald’s makes custom deals with all its suppliers to provide a certain quality of materials at low prices. In this case, we could sort of consider the suppliers and independent owners as a cooperation of companies.
However, I don’t like that example because it is very hierarchical. Yes, search and ads are the core values Google provides. But there are many pieces that could live independently. YouTube can work well independently. Android is another example. Other elements are probably less profitable, such as maps, gmail, and chrome, but they all have very strong meaning to users, and could contribute strongly to the Google brand. I think each project, with much less formal obligation to the others, could open itself up to more innovation. With innovation comes risk of failure, but also great reward of paradigm-shifting ideas, the ones that seem obvious in retrospect, but crazy before you actually do them.