Googler 13

Saturday, March 26, 2011

Watch this video! Tell everyone else to watch it before they tell you to!

I am very excited to have been invited to attend this year's Summit Series, Summit@Sea, which will be held on a cruise ship heading for an undisclosed island. It is a conference for 'doers' in the areas of Innovation, Entrepreneurship, Revelry, Altruism, Arts and Personal Growth, keynoted by Sir Richard Branson.

One of the incredible events at the conference is shark tagging for conservation research purposes. The number of slots available is limited and I want to be one of those chosen. In order to be eligible to go I needed to submit an entry that answers two questions:
In your opinion, what is the most serious issue facing the oceans today?
What is one thing that you, your company, or your industry can do to help address it?

Below is my submission.
Some of you may recognize the characters from YouTube/iPhone4 fame :-)

Please watch it and spread the link. Lets see if we can get up to 100k views by the Summit, which starts April 8.
Make it viral... On your mark. Get set. Go!

details about the event can be found at:

Monday, March 7, 2011

My favorite quotes- some things to reflect on

I've been burning the midnight oil of late writing my business plan to unite Hollywood and Silicon Valley. Until I can make another full blog post, I hope you find something here inspiring.

= = = = = = = = = = = = = = =

defined path: "...most people are like a falling leaf that drifts and turn in the air, flutters and falls to the ground. But a few others are like stars which travel one defined path: no wind reaches them, they have within themselves their guide and path."

Siddhartha by Hermann Hess
Someone who doesnt know what they want probably doesnt want what they have" anonymous
“You have to have a dream for it to come true”
Steven Schimmel
"Any important design must be ready to be loved and hated in equal measure."

Matt Davis 
Designing a Proper Ferrari. 
Winding Road Magazine
 issue 11.0
“Like drinking poison and waiting for the other person to die.”
“Do not regret the past. Do not speculate about the future. Live fully in the present by seeing things the way they really are.”
What does not kill me makes for great stories later"

Steve Schimmel 1993, in Kenya Africa

"There is a point beyond which self-revelation can be damaging. And one of the flaws in my character, which I have not fully fathomed, is the urge to reveal myself."

George Soros; The Alchemy of Finance, 1987


"A man changes slowly during every phase of his life until he realizes with a start that it is difficult for him to remember and recognize his former self. Thus life is a series of rebirths, and the beginning of each new phase is like a sudden leap over a chasm which streches, insurmountably behind one so that there is no return to the past"

Mika Waltari, The Etruscan, 1956."

"I believe people see something alien in me and the real reason for this is that in my youth, I was never young and now that I am entering the age of maturity, I cannot mature properly. There was a time when I was all ambition and eager to learn...Now for a long time I have known that I am not a genious and cannot understand how I ever could have wanted to be one."

Sigmund Freud.

"We shall not cease from exploration. And at the end of all or exploring will be to arrive where we started and know the place for the first time"

T.S. Elliot

"Somebody once complained to Socrates that his foreign travels had done him no good and was told in reply 'That's not surprising sicne you took yourself with you'."


"If you are going to do it. Do it right.

my beloved grandpa

“It is only necessary to have courage, for strength without self-confidence is useless"

Giacomo Casanova

"Heavier-than-air flying machines are impossible"

Lord Kelvin, President, Royal Society, 1895.

"The secret to success is as secret as common sense is common....Confidence & Follow-through.

Steve Schimmel
“All the happiness there is in the world
 arises from wishing others to be happy.
 All the suffering there is in the world
 arises from wishing oneself to be happy.”

and finally... I made this when I was 21 and had just moved to San Francisco. Ive had this image nearby from my darkest days to my brightest nights. It is important to believe in something...and it might as well be yourself.

Monday, February 14, 2011

Porn for Cookies (and other early Google cultural nuggets)

Case studies and consultants have written ad nauseum on Google culture, how to replicate it and transform your corporation! Corporate culture is an interesting thing. It is a social anomaly reflecting the microcosm specific to the unique individuals participating (especially the top management/founders- since it tends to flow top-down) and the time and place in which it has sprung up. It is not developed or imparted via an employee handbook. It is organic- a living, evolving reality shared by only those who are part of it. We used to talk about “drinking the cool-aid” (please pardon any insensitivities around the phrase). We all talked, acted in accord with and truly bought into the idealism of our shared mission. Google was a rare gem. At a time when other companies were bleeding venture capital cash: hiring at a breakneck pace (sometimes just to fill desks and make it appear that work was being done- this is true- my wife was hired as an intern during the .com boom by a start-up to sit and make personal calls so that it looked like “big things were happening” when the company would walk potential investors through the office); and spending hundreds of thousands of dollars (sometimes millions) on lavish parties to get cache in the internet social and funding communities, Google was frugal. I remember early on when Larry [Page] bought a $3,000 green laser on the company credit card that he wanted to take to the Burning Man Festival to project live search queries onto the ground. We revolted since it seemed a poor use of funds. I think he ended up returning it.

The colorful and fun offices we lived in were also simply a natural outcropping of early Googlers’ interests. Ray had a lava lamp, then Chris joined and brought his from home....then there were lava lamps around the office. We had some large exercise balls around to sit on, one popped and Sergey [Brin] told our receptionist to order some more...she bought alot more! and then these colorful balls were just all around. One was huge (maybe 8’ diameter). For fun or stress relief we would take a running jump and bounce off the thing and usually spring and crash into the wall :-). For other companies, I can’t imagine that just getting a checklist of things Google had in the office and sending someone to Costco would enhance the experience of their employees. There is no back-story for them. It isn’t grounded in company lore or reflective of the employees. Manager: “Here. Sit on this green ball instead of your chair” Employee: “Why?” Manager: “They did this at Google”.

One of my fondest memories for the first few years of Google’s life was my friend Craig (3rd employee, 1st non-founder) making homemade bread in the kitchen and then walking through the office carrying it and some butter loudly declaring “bread. bread. bread.” and people would come out of the woodwork to grab a slice and say “hi”. You can’t script this stuff. Its endearing because its real.

I used to pay very close attention to our traffic (I used to forecast it for the company) and would often send out mass emails when a milestone was hit. One day I sent the following message to the whole company: “Congratulations, today is your day. Google has hit our first 100 queries per second day!” Can you imagine where else you could get away with broadcasting this to the entire company? If you disagreed with something the company did...that could be broadcast and a start a discussion as well. Employees with all our quirks had a voice and the freedom to use it. It couldn’t have been any other way.

We were a true Silicon Valley tech start-up. Amusing and adsurd things happened there on a daily basis.

[this a screenshot of an actual instant message conversation between Larry and Sergey’s original assistant and me, circa 2000]

The comradary and openness of the company to employees was another special thing. For many years, any employee could access all information about the business and performance of the company. You could go to our intranet and see our traffic and revenue every day from each source. Every Friday we would get together as a company and divulge every detail of what was going on with no fear that it would leak out. Trust bound us. We were always free to ask anything. It was always amusing for Omid (my boss) to stand on the table in our cafe and talk about our business progress. Until Eric Schmidt was brought on board, every week someone would cheekily ask Larry “when are we getting a [real] CEO”. It was all in good fun...and when Eric finally arrived, he joined an already profitable company.

We were treated very well internally. Amazing chef and sous-chef’s Charlie and Jim had free reign to buy organic & local foods to nourish us and keep us healthy. We were fed (everything free) things like Copper-river Salmon when it was in season. We had masseuses on premises. You could go onto their calendar and schedule to go for free whenever you wanted during the work day (when this changed to a $20/hr co-pay there was an uprising, but the charge stuck). I used to go Tuesdays after playing roller-hockey in the parking lot. As for roller-hockey, one of our early employees was a hockey fanatic, so she got professional jerseys made up for us.

(Steve Schimmel & Sergey Brin playing roller-hockey in the Google parking lot, 2000)

Our culture was aided by initiatives of the individual employees. I started the Google Wine Club in 2000 and an always growing group of us would meet every few weeks at night at the office and talk and drink wine. I would always pick a theme and prepare a lecture and people would bring in bottles relating to it. Employees from every department would come. One rule was that they weren’t allowed to talk about work. This led to fascinating topics and side conversations about amazing things people had done, their hobbies, interests and dreams for the future. These events paid huge (if largely invisible) dividends for the company. Sales folks and engineers, legal and HR folks who otherwise would not have known each other when passing each other in the halls became friends, which led to exchanging questions and knowledge during the work day. They were connected in a way that would not have happened otherwise. They now knew each other socially...which is a very different bond. All of these things made for a cohesive existence and united us as one culture.

And that brings us finally to “Porn for Cookies”. Working for a start-up, especially one that is fanatical about excellence can lead to all sorts of odd requests. There was a time when we had a computer screen on our receptionist's desk for our office visitors to view live search queries being performed by users in real-time. However, as the universe of our users “normalized”- i.e. the proportion of average people searching grew versus academics doing “research”, more and more queries became “adult” in nature. I can say that before we finally took it off the front desk you could stand there for a few minutes and get a extremely entertaining show! This highlighted a problem...more and more porn was being added to the web every day. We did not want to show pornographic related search results when they were not intended. As a “business development renaissance man” I had myriad one-off and odd tasks. One of the more interesting ones was to get a random sample of search queries from the logs group and do a statistically significant categorization of what people were searching for. I pulled about 400 queries and started emulating the search to see what came up, follow those links and fit them into a category.! After ten minutes on the task, I had to close the blinds to my office and lock the door. fact, people were searching for porn. The problem then became how to make sure pornographic results didn’t make it into innocuous search results. After looking at the external solutions for porn filtering, Matt, one of our early engineers decided that they weren’t good enough, so he was going to build his own solution. The job of aggregating a list of pornographic words was too daunting for one person, so his wife had an idea. She baked cookies to incentivize Googlers to help her husband look for porn. His request for assistance went out with a company-wide email: “Porn for Cookies”. His wife proved to be a great baker and Matt got the help he needed :-)

Google culture. It is uniquely Google's..authentically fashioned from the first employees. Take the fundamental lessons but don’t try to imitate it. Let it evolve and flourish. As it says in Google’s “10 things we know to be true”. “You can be serious without a suit” least that was true for us. Come up with your own “10 things” list and make some cool-aid.

Saturday, February 5, 2011

Your Start-up Sucks (post includes a Google business plan slide & pre-adwords ad result)

Ok. Your start-up probably doesn’t really suck, but someone who doesn’t know any better might look at your “plan” or “product” and think so.

Having a vision, building a working prototype, getting others to believe and invest in you...these are the first steps to starting and growing your own technology company. You might think you have to have it all figured out from the beginning, but you don’t. Intel famously had a one page business plan. Google had the “beta” moniker on it for what seemed like an eternity. Get it out there and begin the perpetual improvement cycle that will define your future.

Google is one of the the most successful, innovative and valuable technology companies ever created...but it had humble beginnings, just like everybody else.

When I was a junior in college, I did a semester abroad in Florence Italy to study the Renaissance. I greatly admire the disruptive and game changing philosophies that came from that unique time and place. An interesting tidbit about the people living at that time is that they knew they were living in a renaissance (a period of rebirth and illumination). As such they began to think of themselves and what they did as being important and they started to keep personal journals and collecting memorabilia. It was pretty clear to me at the time that 1999 Silicon Valley and Google specifically was a special time and place. I’ve built a fine archive of early Google memorabilia- my own Smithsonian Google exhibit of sorts. I’m going to share a tiny sample of it here.

Google was started by two Stanford Computer Science Ph.D drop outs. Most of the early employees were just out of college and had never had another job. By the time Omid Kordestani and his original business team (including me) joined from Netscape in early ’99, the company had already written a business plan and was shopping it around. Google got its $25 million in funding with the following as its Business Model slide:

(this is a scan of the actual 1999 business plan page + my watermark)

As you can see...we did NOT have it figured out.

Its pretty obvious now that our Advertising program was to become the elusive and mysterious “Revenue Stream #3”, but even that had a bumpy start. As I stated in a previous post, Larry Page’s vision was that “advertisements can be as relevant as search results”. In the “reinvent the wheel” culture that we worked, this meant looking for any and all potential solutions to the problem of creating RELEVANT advertising. What is unknown to most of the world, is that before Adwords, Google created and went live with its first attempt at advertising in October 1999. That program lasted for less than one hour. Google Engineers had devised a theory that we could do a good job matching search queries to relevant books on using a certain grouping technology. We signed up for Amazon’s affiliate program and started showing books with links to purchase. These were our ads. I happen to have printed and keep a few examples from that short lived experiment. Many of the results ranged from mediocre or funny to outright scandalous. Below is the most innocuous of my examples. I wish I could show you some of the racier ones, but my wife made me promise her that I wouldn’t :-)

(click to enlarge- the search query is: "ugly girls". the ad is: "Just for you : A Picture Book of Helen Keller")

Google is a great company. It got that way, not because it was perfect, but because it was filled with smart people who were willing to learn and adapt...and that’s the way to end up not sucking.

Tuesday, February 1, 2011

Steve’s basic deal methodology

“Triangulating in on Value”

As a self-taught negotiator, I had to come up with my own logic for how to value a deal. One thing that I learned very early (especially on the buy-side- when I was the one with the checkbook), was that the price a vendor first quoted is just a starting place. Often we would end up nowhere near that price. Most of the deals I did at Google (at least on a volume basis) were to license other people’s technology or data for use in our products or services. This included IP geocoding, language translation software, white/yellow page data, etc. The challenging thing from a pricing standpoint was that the way we would be using these things was custom to us. Cookie-cutter rate card pricing was not going to be applicable. The value was ambiguous and we considered it a trade secret exactly what we were doing with their product. Many vendors wanted to participate in the revenue we would receive from whatever service their product was integrated into. I always rejected this concept. As I explained it, its like a supplier of silverware trying to charge more to a restaurant that has $30 entrees versus one that has $10 entrees. My position was that I might pay more for the vendor’s premium offering, but not more for the same offering just because I could monetize well. In addition, I was relatively limited in the intangibles that I was able to offer. We wanted to keep it secret whose technology we were integrating, so we could not allow the vendor to announce that Google was using their products. This made things difficult for me, as vendors were very willing to negotiate down their prices for this ability. The most I was ever able to offer was that they could include us in a list of customers (without disclosing any details of our relationship) in their sales presentation materials (but never on their website).

One thing I learned was that people aren’t always good at understanding the value of their own products and therefore don’t always have good logic for their pricing. As a fundamental analyst, I was always ready to take on the debate. Ultimately, I always came up with the price I was willing to pay, which didn’t always have much to do with the quoted upfront price. Nobody works for free and I didn’t want to drive my vendor’s out of business...but I did want to pay what I believed was fair and equitable.

Here’s how my thinking worked: I always tried to do what I coined “triangulating in on the value”. When I considered how much to pay for something I attempted to discern:

  1. How much money did I expect us to make from our product/service that was integrating the vendor’s product. I needed to ensure that I what I was paying for outside technology was low enough to provide us with reasonable profit. If you pay too much, you can’t make money.
  2. How much profit is the vendor making (much of this was educated guesstimating). I wanted the vendor to make a profit, but not an exorbitant one. I did not want to squeeze the vendor so hard that they ultimately felt cheated and therefore provided poor ongoing customer support for us or difficult re-upping of the contract at the end of the term. "We've never done a deal at that price" is good. "We'll go bankrupt if we give you that price" is bad.
  3. What was the cost of substitute goods. I can’t say that I remember ever dealing with a vendor where they were the only one with the type of product we needed. That being said, there were specifics that made one vendor a better fit for us than the other. If the preferred vendor was substantially higher than another, I made them answer to why, as they were quite familiar with their own competitive landscape. There was never a very good reason, and invariably this question would make them immediately more flexible.
My goal was to land at a price within a range of where those things intersected.

In summary:

  1. Make sure what you pay for outside resources allows you to make a reasonable profit on your finished goods.
  2. Allow for your vendor to make a reasonable profit- but no more.
  3. Know the prices for substitute goods so that you have a sense for the market and negotiating ammunition.

Friday, January 28, 2011

The 3 most important things I learned from Google (part 3)

none of which are likely to be endorsed at Business School

This is the third of three posts.

3. Nice guys finish first

I’m going to get this out of the way up front. I get that with Google being the 800 pound gorilla now, alot of people may balk at this one, but the reality is that it is true- especially for a corporation. As for “customer service” complaints specifically, Id simply state that with 200 million monthly visitors, the expectation of response from an actual human should be pretty darned low. The online world is not like the physical product world and hey, with Google, you get the world....for free.

OK, so now for what I and those who built Google from the ground up believe:

From the very beginning, Google has believed that it had a “reason for being” and that reason was to deliver information to people. All information to all people. Our internal litmus test was always whether or not what we were working on was moving us toward that goal. With this in mind, it is not hard to understand that we believed that our users were our customers, not whomever was going to financially support the service (i.e. advertisers). We would simply be an efficient conduit between the two. There was never any question of this and all of the decisions we made, from UI (user interface- how everything looks to users) to new products launched followed this.

We were different than any other company we knew about. We were young. We were idealistic. We bought into the idea that Microsoft was “the evil empire” and we didn’t want to be anything like that. Its a powerful thing when you set an intention like this and everyone buys in. As my good friend Paul Buccheit now famously coined, our motto was “Don’t be evil”.

Internally, life was good if not hectic. Traffic served by Google grew a tremendous amount every month, and it was a daunting task to deal with such hyper-growth. Larry and Sergey’s intention within the company was to make it a place you wouldn’t want to leave...and many didn’t, for the majority of their waking hours. Larry and Sergey themselves didn’t plan on leaving campus so what they built reflected that. We hired an amazing chef and gave him a free reign to buy organic and top foods and feed us well. As much as outsiders spew remarks of wasted money and dot com frivolity, internally we knew that the time spent leaving campus to go to lunch would be reduced, camaraderie increased and healthy bodies equal more productive and happy employees. That’s also why we had a gym on site very early, played roller hockey together and otherwise kept active. When Google went public in 2004, in its S1 filing, it warned investors that it intended to increase, not decrease such things. Being at Google wasn’t a job. It was a lifestyle.

Even the way Google went public was an attempt at being good. The traditional IPO process is replete with built-in badness for companies and investors (at least the average individual investor). Typically a small number of investment banks get together and take on an allocation of the shares of stock that the company is going to sell to the world. This is called a syndicate. They then take the company public in a way that greatly prefers their biggest and best clients for either cheaper stock prices or easy quick profit flips. The stock goes up, the company itself doesn’t benefit from any of the rising price in the secondary market but the banks and their friends make lots of money. Its a zero sum game and the individual is almost always on the wrong end of the trade. Another issue is that the bank usually advises that the company split its stock as many times as it needs to to get the price per share down to around $10 before it goes public, logic being that people like to buy in round lots (100 share purchases) and $1000 is a workable number for most people.

Google wanted to take control from the banks and let the individual in right away and not have to pay more by having to buy from the bank’s preferred clients that got to buy before them. Instead of 2 or 3, Google split its shares among 19 or so banks and made it that individuals were allowed to register to buy the shares at IPO price. Also, Google refused to split the stock to lower the price because we wanted “investors” and not “traders”, and if the price was high, people would be less likely to just buy and flip. Google wanted people to buy our stock that believed in the future of the company and wanted to own part of it. Also, a mass of active “traders” of stock destabilizes it and we wanted to reduce that possibility. Google also used a “Dutch Auction” to price the shares in order to find true price at demand and not leave money on the table.

Being good is probably best seen in our user interface. Sites like Yahoo had a dizzying number of things to look at on the homepage and subpages with the intention of keeping you clicking (and not finding what you wanted quickly) in order to show you as many ads as possible (since Yahoo made money on each ad SEEN). There was seemingly no concern for user experience. Google’s philosophy was to get you off our site as quickly as possible- connecting you quickly with the right information. Larry’s earliest vision was that success meant seeing as FEW pages of Google as possible. That’s why the original school project “I’m feeling Lucky” button (which would take you directly to the first search result’s website- without you having you look at the page of results on Google) was kept. Larry knew that if we did our job well, people would simply come back more...which they did. That provided the page views that represented our opportunity to monetize the service. We didn’t need to maximize pages per visit at the expense of the user experience. You didn’t go to Google to be on Google. You went to go somewhere else. In a world of no switching costs, quality and user experience are the “lock-in” and control.

Finally, I’d like to mention that doing what is good and right permeated the individual employee work ethic. My personal deal philosophy (negotiating 3rd party technology deals- where we were going to use someone else’s technology) was always to listen to the needs and wants of the other side and understand where they were coming from. I always negotiated very very hard, but worked to build relationships. I knew that if we integrated 3rd party technology into ours, it was likely to be a long term relationship. If I screwed someone now, when the contract was up and needed to be renegotiated, I was likely to be the one getting screwed. I never lied, cheated or misrepresented our intentions. I represented Google’s corporate philosophy at an individual level. When I left the company and was communicating who would be taking over the relationship for Google, I received myriad of responses telling me how great it had been to work with me and that even though I had driven a hard bargain, it was amongst the best experiences they’d had working with another company.

My take away:

integrity matters. You can and will be successful if you consider more than yourself in your actions and decisions. Being good and not evil pays off in the long run.

Wednesday, January 26, 2011

The 3 most important things I learned from Google (part 2)

none of which are likely to be endorsed at Business School

This is the second of three posts.

2) Operate as if you exist in a vacuum.

Most websites that make money do so by placing ads on their pages...and there’s a good chance that those ads are provided by Google. But it wasn’t always that way. Back when Larry and Sergey were at Stanford they wrote a paper called The Anatomy of a Large Scaled Hypertextual Web Search Engine, where they expressed their skepticism and concerns about monetizing a search engine with advertising.

Having come from Netscape, I was quite familiar with ad models on the web. Banner ads at 2% average click-thru rates and text links at 0.1%. These could be sold by category, but likely were mostly run of site ads (they show up wherever there is a free space regardless of what page it is). This was the era of the “punch the monkey” banner ad. Basically in 1999 advertising on the web was so untargeted that click-thrus began to tail off. The novelty of clicking on banners was largely over. The solution that creative folks came up with was to make them little games or colorful seizure-inducing flashing ads that you would click on just to get rid of them. Yes, the click occurred, but no transaction was going to happen at the offending advertiser’s website. Ads that cost money but don’t produce a sale are bound to drop in rates (price)... and that was what was generally happening.

I was the website bizdev guy so I was on the inaugural ad design team. I was one of the few people sitting around the conference room table when Larry [Page] walked in and declared that “ads can be as relevant as search results” and then basically walked out. I scratched my head a bit and remember thinking “what does that mean?”. What it meant was that we were in no hurry to make money from our website. It meant that we weren’t going to have graphical banners on our site. It didn’t matter that all of the advertisers of the world were used to hiring an agency, having a small number of creative banners produced and then distributed to the pages of the web. It didn’t matter that not only were our ads going to be different, but it was going to be an entirely different sale and require changing buyer behavior and a whole new process. We were not going to consider how the entire industry worked, we were just supposed to build this thing as if the rest of the world and its established practices didn’t if we were operating in a vacuum.

Larry was right on. The higher qualified/targeted an ad is, the better it will perform and the higher the rates will be. Better=more revenue. What he realized was that you can’t get any more targeting potential than someone explicitly telling you what they are looking for. That is what you do when you go to a search engine. If you have an advertisement that answers that question, it actually adds value to the user. The ad becomes relevant to the search and is a reasonable place to click. Of course there was a problem. Graphical banner ads are not customizable and no agency is going to produce a multitude of banners to match against individual keyword searches. Our solution was to use text ads instead of graphical banners (which had the added bonus of being very fast at a time when internet connections were still relatively slow). We created a very simple online interface which would allow advertisers to create as many custom text ads as they wanted and experiment with which keyword phrases to advertise to. We wanted them to be able to learn what keywords to buy which resulted in the most clicks, not only because it would mean more revenue for us, but because more clicks meant the ads were relevant to the searcher. Changing user behavior, in this case the entire advertising world is not easy. What what we knew and ultimately figured out was that we needed to economically incentivize advertisers to want to do a better job advertising to our users. All advertisers wanted the top ad positions on the page, but we made it that they couldn’t simply buy there way to the top. What we did was said that their position amongst all the ads was relative not only to what they bid for their ad, but cross referenced against the click-thru rate for each specific ad against each specific search term used by the searcher. You could pay less for a better slot if you had a better and better targeted ad. We also encouraged the advertiser to link to the relevant page within their own site that related to the search, not just to their home page (i.e. if you searched Google for "wedding china", an ad for William Sonoma might appear. A click on the ad would lead the searcher to the wedding china page, not the homepage, which is what used to occur). This type of thinking made the whole experience better. And the rest as they say, is history.

My take-away is that:

Google completely disregarded the way the entire advertising industry worked and came up with its own solution as if it existed in a vacuum. And ultimately, it worked. Sometimes to find the right answer you have to look at a problem and work out a solution which completely disregards current standard practices.

Tuesday, January 25, 2011

The 3 most important things I learned from Google (part 1)

none of which are likely to be endorsed at Business School

This is the first of three posts.

1) Reinvent the wheel

When I decided to go to work for Google in May of 1999, I heard time and again: “the world doesn’t need another search engine”. The search game was already in high gear. Alta Vista, Lycos, Excite, Infoseek, Inktomi, all the meta search guys...why did we need another? There was an answer, but it was one few could relate to at the time. The Internet was cool and all, but it was not quite indispensable. In 1999 the world had a tolerance for digging through pages upon pages of results to find what we were looking for, if we found exactly what we were looking for at all. The world did need a "better" search engine. It just didn't know it yet.

For those who don't know, when you go to a search engine and type in your query, the search engine doesn’t look at the entire web and bring you back results from it. What actually happens is that, periodically, the search engine sends out little computer programs called “spiders” which go out and look at pages on the internet and store a copy of what they see in their own database (this is called their "index"). When you search, the results you see are from that old database, not the web that exists at the time of your search. As long as the page in the index hasn’t been moved or deleted in between the time the index is built and your search, you end up at the correct page. Remember “Error 404 File Not Found”? That was from all the changes that occurred in between indexing and searching.

In 1999, indexes were compiled once per month and the largest search index was 100 million pages. Even then, that was only a fraction of all the pages on the web. And here was the real problem- millions of pages were being added to the web daily! When Google came on the scene, it matched Alta Vista’s index size. Alta Vista tried to increase their index to 250 million pages, but the quality of results (as measured by the number of pages you had to dig through before finding what you wanted) got so bad that they had to bring it back to 100 million. This happened because of the algorithm (the logic of how they decided what to return as search results) they (and all the other search engines of their day) used wasn’t able to scale, in addition, they were susceptible to webpage designers being unscrupulous to trick them into showing their pages even when the pages weren’t related to the search performed by the user. One way this happened is that a designer would put a popular word 1000 times in white on a white background. The search engines didn’t know the word was “invisible”, only that it occurred a lot on the page, so must be really relevant to that word. It wasn't. Google did things completely different. It looked at an dizzying array of variables when analyzing each page, not just word counts. This made it much more resilient.
If 1st generation search engines couldn’t scale their indexes without loss in result quality, they were eventually going to be rendered obsolete. Google went on to launch an “index size” war, since it believed that its mission was to make the world's information universally usable and accessible. To do that, it had to keep up with the growth of the web (as well as expand beyond just finding traditional web pages to serve as answers to queries). Google’s technology not only scaled well, but because of the specific way it looked at webpages, the results actually got better as the index grew. It also began to index more frequently so the freshest data was in its index, vastly improving user experience, which is a key, fanatical focus for the company. Ultimately, Google knew that the web would keep growing and that search would one day be akin to a utility and without it, the web was going to be useless. Google took a completely fresh look at the problem. In doing so, the quality increased (not to mention the speed gained by uncluttering the page), people searched more, relied on the web more to find things and the entire market grew.

So, my take-away here is:
Just because things are the way they are now doesn’t mean that its optimal or has to stay that way. Often today’s standard is the legacy of something that has long since changed or no longer serves the needs of those it was meant to. Regardless of if your market is dominated by large established players, if you look at how the world is evolving and to the needs of tomorrow, you may discover an opportunity to grow market share and the market itself by COMPLETELY rethinking the way things are done.

Wednesday, January 5, 2011

Steve's story- Googler 13

I was born in 1972 to a poverty-level family in suburban Chicago. During the first few years of my life, I shared a 600 sq ft, 1 bedroom cottage with my parents, older sister and dog. As a kid, I grew up helping my dad kill roaches and trap rats in his one-man pest control business.

Inspired by my architect grandfather who dabbled in the stock market, I started playing the market when I was 15 years old. In 1994 at age 21, I graduated Magna Cum Laude & Dean's List from Babson College, an undergraduate business college outside of Boston. Shortly thereafter, I moved to San Francisco to find the stark reality of an uninterested job market. After a period of trivial and unsuccessful undertakings, I took to the streets out of desperation to "make something happen." My thought at the time was: "if my resume falls on the floor, nobody will bother to pick it up".

It was September 1995. I had been in San Francisco just over a year and had nothing to show for it. I remember walking around the streets of San Francisco and seeing two individuals who made a profound impression on me. One was a panhandler who simply sat on a corner and directly asked for money. The other was a man standing on a milk crate wearing a sandwich board that said "Repent! The end of the world is coming." I was in a state of mind where I was open to anything. The things that struck me were that the first man had gotten to a point where his ego had been worn away and he was willing to simply and directly ask for what he wanted without beating around the bush. The second man believed so strongly in his convictions that he was willing to physically wear his message and present it to the world. By the end of the week, I had created a sandwich board expelling the virtues of my skills. One morning, I put on my best thrift store suit and boarded the 5am bus to the financial district with my sandwich board under my arm. I stood outside the Bank of America world headquarters, put the two-sided sign over my head and began passing out resumes. I was there for 12 hours. I passed out resumes as people rolled into work, when they went out for lunch and as they left for home. This was one of the most humbling moments of my life. I stood out, exposed, bluntly asking for help and displaying my convictions. The response was amazing and really helped renew my faith in people. In the back of my head, I think I was expecting people to throw tomatoes at me (which my friend in New York said would have happened on Wall Street). Instead, many people took my resume and talked to me. A news crew even came.

In the end, this seemingly crazy idea lead to me getting a job as an associate equity analyst covering high-tech companies in downtown San Francisco. In my job, I was able to use my stock experience and education, but it did not take long to realize that I did not like analyzing companies. What I really wanted was to be involved with starting one.

In October of 1996 at age 24, I left my job in order to write a business plan for an idea I had relating to the relatively new phenomenon known as the commercial Internet. The idea revolved around creating a platform for pooling individual investor dollars to provide angel funding for fledgling companies and create a secondary trading market for these shares.

Unfortunately, after a few months I ran out of money and needed to look for a steady job again. I found a job opening for an entry-level, market research analyst at a small Internet company in San Francisco. Over a two-week period, I left messages on every single voice mailbox I could get at that company. I was never able to get a human on the phone or get a call back. One day, I randomly entered an extension off the main number and heard the message "Mark Goldstein's pager number is....". I knew from the website that Mark was the CEO of the company. What had started two weeks prior as a timid, pump myself up "you can do this" pep talk turned into a "somebody is going to talk to me, damn it!" When I got that pager number I called it immediately. Soon after I got a call asking "who is this?" I explained that I wanted the job his website had listed, but had not received a call back. He said that the reason nobody was there is that a few weeks earlier he had sold the company and its technology. He said he was downtown at a conference and to meet him at lunchtime. I ran over and he preceded to tell me that he was a serial entrepreneur that would be starting another business at some point soon and to stay in touch...He emphasized that he was impressed that I was sitting across from him given the situation.

Time passed and Mark had yet to start his new company, and I was flat broke. I went to him yet again and asked for help. He simply picked up the phone and called a Venture Capitalist friend of his. The next day I was at breakfast with a VC. Two days later I was working at Netscape Communications (one of the companies responsible for the commercial Internet taking off) doing business analysis and portal deal modeling.

It was there that I honed my skills relating to understanding business models and became an expert in the Internet itself. I also proved my worth to the Netscape executives and built a reputation for myself there.

(Netscape CEO Jim Barksdale, Steve Schimmel, VC John Doerr, 1999)

In 1999, America Online purchased Netscape and many executives left the company. One in particular was the Vice President of Business Development. He had decided to go to a very small company that was looking for venture funding so it could afford to try and build a company out of some very good technology it had developed. The company had been incorporated by two Computer Science Ph.D. candidates at Stanford University a few months prior. It only had the two founders and a few engineers working there. The Netscape VP joined the start-up in March of 1999 as employee 12 and hired me to help him build the business. In May of 1999, I joined the founding business team as lucky number 13. That company got its first and only round of Venture Capital, $25 million, a month or two later. The company was a Search Engine company that had only a few hundred thousand searches performed on it per day by at most a million users per month, mostly academics. The company had no revenue at the time. That company, now widely recognized as Google is the world leader in search technology, bringing in billions of dollars in revenue per quarter by aiding many millions of users all over the world find information on a daily basis.

During my career there, I negotiated our first $100k and $1million deals; was on the design team for the original ad program; ran a cross-functional external technology evaluation team; negotiated 3rd party technology licenses; was an all around go-to guy to just about every department that needed business help...and I founded and ran the Google Wine Club :-)

(Steve Schimmel, Google Co-founder Sergey Brin, 2000)

I could not have imagined a better job for myself. I was not constrained by any specific job description and was free to to add value wherever it was needed. I truly got to be a Business Development Renaissance man.

(Steve Schimmel, Vice President Al Gore, 2001)

When Google went public in 2004, it was one of the most successful IPOs in history. For me, that was a defining moment. I felt that I had made my impact, left my personal mark and accomplished everything I had set out to do there. I left shortly after IPO to pursue other interests.

My confidence and follow-through, along with the chances awarded me by individuals who saw something in me and believed enough to give me a "shot", took me from poor kid to successful businessman "retired" by 32 years old. At no point did I ever compromise my integrity. I do things that I can be proud of. My colleagues and I lived by the motto of "don't be evil". It’s not a gimmick. It’s a philosophy of doing what's right and letting the money follow.

Having reached a level of financial success that awards me the freedom and flexibility that it has, I am now looking to share some of my knowledge and experience to benefit the next wave of those who aspire to do as I did.

...and that is my story.