Think Like A Google CEO

I recently finished reading How Google Works by Eric Schmidt and Jonathan Rosenberg; the ex-CEO and former SVP of Products, respectively. The book covers nearly every facet of Google from strategy, to culture, hiring, communication, and innovation. The insights given throughout the book are highly valuable to every current and future business leader and product manager. Throughout the next series of posts I’ll focus on a few of, what I believe are the most important topics covered in the book; Strategy, Communication, Innovation and Culture. The posts will be broken up into a few easily digestible segments but will also dive deep into the key takeaways from each topic.

Plans Change

Let’s say your friend calls and wants to meet up for dinner. This is the foundation, the base upon which the details of dinner will be built. Those little details are what you will talk about on the phone; should you get Italian, Mexican or Seafood; are you going to drive or take an Uber? In business it’s the same. The foundation is the solid ground upon which the business is built. It is important to understand the base; the market in which you operate. The details of how you achieve your business goals will change with time.

“The plan is fluid, the foundation is stable”

A good business leader can iterate through those details while holding on to the underlying business foundation. “The plan is fluid, the foundation is stable”, is one of the key takeaways in Google’s strategy.

As a product leader, how many times have you drawn up a detailed product plan and roadmap only for that plan to change a month later. Don’t give your team a well drawn out plan that is destined to change even before you're finished writing it. Rather give them a good foundation upon which to build. If you have a good team, they will figure it out and fill in the details.

Building a stable foundation

What does a solid foundation look like? It has almost as much to do with corporate culture, the ideals your company is built on, as it does with strategy. The general idea of Google’s foundation is “bet on technical insights that help solve a big problem in a novel way, optimize for scale, not for revenue, and let great products grow the market for everyone”.

This will sound almost counter intuitive to the way most businesses operate; optimize not for revenue but for scale, and let products grow the market for everyone. This can be seen in many of Google’s products today; Gmail (Android) and Google Maps come to mind. Both are open source and designed for scale not revenue. They are based on the foundation of technical insights and solve big problems in unique ways. And it is not hard to argue that both have been highly successful for Google.

Tesla is another company that comes to mind when thinking about products that are optimized for scale and grow the market for everyone. At the end of Jan 2019, Elon Musk announced that he would release Tesla’s patents to anyone who wants to use the technology. This was done in an effort to fight climate change.

Something like this had never been done in the automobile industry before, where normally every innovation is guarded to protect its monetary value. By opening up all of Tesla’s patents, Elon Musk was letting the entire electric car industry grow. When concepts and ideas can be borrowed and combined to form new inventions society as a whole benefits.

Build For The Future & Forget Market Research

Before joining Google, Jonathan Rosenberg ran the product team at Excite@Home. The company was founded on a technical insight; coaxial cable that brought TV to people’s homes could be used to bring internet into homes as well. At the time, cable operators' market research showed that their customers were using personal computers with a particular processor technology and so they directed Excite@Home to produce a cable modem to support those customers.

However, Excite@Home understood that this old processor technology was too slow to do anything with a broadband connection and that customers would have a bad user experience. The market research also did not take into account Moore’s Law; the idea that processing performance would double every two years. This would mean that Excite@Home’s new cable modem, built to support old technology would become obsolete soon after it was released.

Ultimately, Excite@Home won the argument and was able to develop a modem to their specifications, one to support future customers who would be able to make use of faster processing speeds.

“Giving the customer what he wants is less important than giving him what he doesn’t yet know he wants.”

Where do you find technical insights? Through a process of combinatorial innovation. The process involves combining different components parts of already existing technology to create new inventions. For example, the invention of the gasoline engine led to the creation of motorcycles, cars, and airplanes which all developed into their own booming industries. In today’s world, the component parts are all about information, data, and connectivity. You can use these technologies made accessible by the internet and apply them in your industry to solve an existing problem in a new way.

When you base your product on technical insights, you avoid creating me-too products. Henry Ford is often quoted as saying “If I had listened to customers, I would have gone out looking for faster horses”. Whether Ford actually said this or not is open for debate but what can be inferred from this statement is that incremental innovation like a faster horse may work well for incumbents looking to gain one to two percentage points a year, but if you are starting a new venture or want to create a disruptive product, this is not enough.

Is Your Business Special?

Specialization allows companies to focus on that one great, big idea and execute on it very well. In the late 90’s Google focused on one big thing; being great at search. It measured success along five metrics: speed, accuracy, ease of use, comprehensiveness, and freshness. At the time Google’s competitors were focused on being portals; multifunctional media sites that tried to be everything to everyone. Google decided to focus on search rather than being a multifunctional portal because they believed that’s the one thing they did better than anyone else. Competitors such as Netscape, AOL and Yahoo were eager to cut partnerships with Google for them to handle the task of search.

Netflix, Warby Parker, Zappos, are other companies whose employees can be hyper focused on a narrow set of objectives and achieve better results, as they are not being pulled in different strategic directions. Each of these companies' strategies is built on a singular, stable base that employees can reference back to when making business decisions.

Moving on from specialization, it is equally important to stop worrying about the competition. The best way to achieve mediocrity is to follow your competition; to incrementally advance a product with low impact changes. Spend too much time thinking about your competition and you will never deliver anything truly innovative.

“How exciting is it to come to work if the best you can do is trounce some other company that does roughly the same thing?” - Larry Page

While the incumbents fight over small gains in market share, a new disruptive company who doesn’t care, can come in and build a new platform that completely changes the market landscape. This is what Andy Grove, former CEO of Intel would call a “strategic inflection point”. An inflection point is an event that changes the way a business thinks and acts. It is a paradigm shift in which the business can accept change, adjust its methods and achieve new heights, or it can reject change, maintain the status quo and decline to lower lows.

While it's important not to completely ignore your competition, it is more important to not follow their every move. This will lead to a stagnant business, one that cannot anticipate and react to market changes quickly.

Simple Strategies You Can Apply Today

Key takeaways that you can apply to your business:

Build your strategy on a stable foundation - plans may change but if your foundation is stable, it will give employees a guiding light to hold on to - a destination of where you want to go.

Bet on technical insights - understand your users and the unique technology your product brings them. Combine market research with your knowledge of future technology. Create products that the customer doesn't yet know he needs.

Specialize - you can't be everything to everyone. Find what your the very best at and execute on that foundation.

Don’t follow the competition (too much) - while it is important to understand what your competition is doing, focusing too much of your attention on them will only lead to me-too products., you will never create anything truly innovative.

Read part two on how to be an effective communicator here.