Googler 13

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.


Steve said...

@Shawn. Need to dig out my old notes. I've revised my text pending validation of accurate #s. Thanks.

joseph said...

The "3 Most Important Things" series was awesome. I literally just found your blog today and read through Part 1-3 quickly. I'm currently at a startup myself and have grown into the role of managing the business development (and whatever else needs to be done). I really relate to Part 3 of the series because it's important to me to have a situation where both sides are benefiting from the partnership you have established.

Thanks a lot for sharing your experiences, and I have added you to my Google Reader so I won't miss the next adventure you share.