How Google Works
Conclusion—Imagine the Unimaginable
Eric spent the holidays at the end of 2013 vacationing with his family. Amidst the usual family activities, the kids got to spend some time watching videos. What struck Eric was that none of that time was spent in front of an actual television; in fact the TV remained dark for the duration of the vacation, and all videos were watched on a tablet. None of what they watched were shows in the traditional sense of the word—they were not originally shown on broadcast or cable networks. Rather, they were all created from the outset to be streamed from websites and mobile applications. The TV, and its surrounding ecosystem, is simply not a part of these kids’ lives. This, we suspect, is not an isolated anecdote, which bodes well if you are a manufacturer of mobile devices or a maker of web-based video content, but not so much if you make the network sitcoms and dramas that today’s kids won’t watch when they grow up.
We live in a moment of great optimism but also a time of great anxiety, and not just for TV execs. During the three years we’ve been writing this book, the disruptive impact of technology has been felt across numerous industries. The economic issues that came to a fore during the latest recession persist even as economies around the world rebound. The rate of technology-driven change outpaces our ability to train people in new skills, putting tremendous pressure on entire classes of workers and the economic structure of many nations. The stable, middle-class jobs that historically are the bedrock of healthy economies are moving to developing nations or online, or disappearing altogether.
There’s no doubt that the disruption of once-robust businesses and the resulting economic impact will be painful and confusing in the near term, so it would be irresponsible to end a book on building great twenty-first-century businesses without offering some advice about how to weather the changes ahead, and how to think about them. What’s different about today’s business landscape? What will happen next? And what can businesses and individual entrepreneurs do to survive and thrive during periods of disruption?
From Downton Abbey to Diapers.com
In order to understand why change threatens traditional corporations, we need to take a quick look back to other moments in history when one form of economic hub passed the baton to another. As we enter the twenty-first century, we’re at a hand-off zone not unlike the one where the Western world went from a feudal economy to an industrial one in the nineteenth century. Many of our friends and family members are enamored with a BBC television series called Downton Abbey, which chronicles the dramatic ups and downs of the residents of a stately British home and the staff who serve them in the years around World War I. The residents are wealthy British upper crusters who spend a great deal of time dressing up for meals and worrying about the staff, while the staff are working-class people who spend a great deal of time, well, working, and worrying about the residents. All in delightful British accents and wonderful, period-authentic clothes.
In case you didn’t notice it because you were too busy weeping at John Bates’ imprisonment (he is eventually exonerated) or Matthew’s death (barring some sort of Bobby Ewing–like miracle,199 he stays dead), the world of Downton Abbey represents the transition from one economic era to another. The definitive preindustrial nineteenth-century institution was The Household; Downton was a source of economic support for surrounding towns through its demand for people and services.
After the industrial revolution, the definitive twentieth-century institution became The Corporation. Think General Motors, an automobile company where mass production was happening at plants thanks to a confluence of factors, including access to power, water, and a blue-collar labor force. Meanwhile, both union members on factory floors and white-collar workers in headquarters enjoyed safe careers and comfortable middle-class lifestyles.
In the twenty-first century, The Corporation as a hub of economic activity is being challenged by The Platform. We’ve touched on platforms in the Strategy chapter, but picture Diapers.com (which was subsequently bought by Amazon). A platform is a very different sort of hub than a corporation. A corporation’s relationship with consumers is one-way. GM decides how to design, manufacture and market a new product to its consumers, and sells it through a network of dealerships. In contrast, a platform has a back-and-forth relationship with consumers and suppliers. There’s a lot more give-and-take. Amazon is a corporation, but it is also a marketplace where buyers and sellers come together. Amazon does not just dictate what it sells to consumers. Consumers tell Amazon what they are looking for, and Amazon sources it for them. Consumers have a voice; they can rate products and services.
Who succeeds and who fails in a world of platforms?
Thanks to the Buggles, we know that video killed the radio star, and thanks to the 2011 bankruptcy of the bookseller Borders, we know that platforms like Amazon can hurt incumbent corporations. Borders was no lightweight. As late as 2005 it had a market capitalization of over $1.6 billion,200 and at the time it filed for Chapter 11, it employed more than seventeen thousand people.201
So it seems to us that incumbent businesses have a choice to make. They can continue to operate as they always have, existing in a world where technology is something to be used not as a tool of transformation but simply to optimize operational efficiency and maximize profits. In a lot of these incumbent businesses, technology is that interesting thing run by that slightly odd group in the other building; it isn’t something that anchors the CEO’s agenda every week. And the impending disruption caused by new competitors entering their markets is something to be fought with battalions of lobbyists and lawyers. Although it might take a long time (and cost a lot of money), this dig-a-moat-and-bury-your-head-in-the-sand approach is bound to end tragically. The forces of technology and disruption are too powerful. So the incumbent that follows this strategy will eventually fail, or at the very least become irrelevant. Along the way, it will hamper customer choice and squelch innovation in its industry, because that is exactly its intent. Innovation means change; for incumbents the status quo is a much more comfortable place to be.
Venture capitalist and Sun Microsystems cofounder Vinod Khosla, who sometimes speaks at the class Eric teaches at Stanford, points out a couple of simple reasons for this. First, at the corporate level, most innovative new things look like small opportunities to a large company. They are hardly worth the time and effort, especially since their success is far from certain. And at an individual level, people within big companies aren’t rewarded for taking risks, but are penalized for failure. The individual payoff is asymmetrical, so the rational person opts for safety.202
There is an alternative for incumbents, though: Develop a strategy that takes advantage of platforms to consistently deliver great products. Use that strategy as a foundation to attract a team of smart creatives, then create an environment where they can succeed at scale. Simple, right? Except that of course it isn’t; not even close. The very nature of mature companies is to be risk-averse and to attack big change like a body attacks an infection. We know, because we’ve been there. After all, you are reading a book by a couple of guys who were among the last Googlers to ditch their BlackBerrys and Outlook email boxes. We don’t always see change coming, and we don’t always handle it that well either. Fortunately, we surround ourselves with people who do, such as our former colleague Vic Gundotra…
The emergence of the social web (and a start-up called Facebook)
The worldwide web has developed in three distinct phases. Web 1.0 started in the ’90s with the advent of the browser, HTML, and this thing called websites. During this Web 1.0 phase, users could read text, see small pictures, and complete basic transactions, but beyond that, functionality was pretty limited. Then, in the early 2000s, new technologies came along that led to more powerful websites and a more robust web infrastructure. Broadband proliferated in several countries, online video took off, and it became easier for people not just to consume stuff from the web, but also publish stuff to it. In this Web 2.0 the web became more than a giant shopping mall and online encyclopedia; it was a place where people could do all sorts of things. Billions of people from around the world came online, and often one of the first things they did when they got there was search.
Before the summer of 2010, that’s where we at Google lived: happily in Web 2.0. Meanwhile, the social web was emerging. Whereas Web 1.0 let you read and buy things and Web 2.0 let you do things, the social web let you talk about and share things. We had been watching this trend build for a while as first Friendster and then Myspace were the hot new things, and we had considered partnerships with a couple of the leading companies in the social space, Twitter and Digg. But those partnership ideas didn’t get very far, and perhaps distracted us from a competitor we never expected. Suddenly, the social web wasn’t coming, it was here, and it was led by a new platform called Facebook.
Google wasn’t really even in the game. The success of Orkut, our first social effort, was mostly limited to the Brazilian and Indian markets. We had launched the aforementioned, much-ballyhooed new form of email called Wave, which was a brilliant piece of technology that thrilled its power users (of which there were few) and confused all other humans (lots). We had also launched Buzz, a product that Googlers loved in our internal “dogfood” trial, but that ultimately raised privacy concerns. By summer 2010, we had stopped working on Wave, and Buzz was also slowing down, making us 0 for 2 in the social web arena.
Vic Gundotra chose to be bothered by this. Vic led mobile; he was the guy helping make all of Google’s great services thrive on the small, mobile screens that were rapidly becoming a critical on-ramp to the Internet for hundreds of millions of people. Vic had seen the potential of smartphones early on, and had helped build the team that pushed Google to make “mobile first” a common mantra. Our missteps in social had nothing to do with Vic, except for the fact that he was a Google employee and shareholder and was concerned that we were missing a historic shift in the web. He decided to do something about it. He asked Bradley Horowitz to lunch.
Bradley was in charge of social, and as his lunch with Vic stretched into a meeting and then another meeting, the two of them started to devise a new plan to reinvent Google for the social web and bring a bunch of innovations to consumers. Social wasn’t part of Vic’s job description, and although we were Vic’s ostensible bosses (he reported to Urs Hölzle, who reported to Eric, and attended Jonathan’s staff meetings), we certainly didn’t tell him to develop a new social platform, or even to offer his ideas on the topic. Rather, he saw we had a problem, felt he could contribute to creating a solution, and decided to make it happen.
Soon, Vic and Bradley’s project, code-named “Emerald Sea,” gained momentum around the company, and about a year later it launched as the Google+ project, one of the most ambitious bets in the company’s history. Google+ is often positioned in the media as a competitive response to Facebook, but this isn’t quite right. It’s more accurate to say that Google+ is a response to the disruption of Web 2.0 and the emergence of the social web. It is the social fabric that weaves together Google’s various platforms, from AdWords to YouTube. And it started because one person saw that a major shift was under way, with the potential to disrupt our business, and decided to do something about it. Even though it wasn’t his job.
Ask the hardest questions
Vic got started on his social quest by asking himself questions: What would it mean to Google when the dominant use of the web was as a social platform? Could the social web make search obsolete? Sometimes the most effective way to help change and innovation outrun the antibodies of corporate entropy is a simple one: Ask the hardest question. Understanding what you do about the future, what do you see for the business that others may not, or may see but choose to ignore? (Harvard Business School Professor and business consultant Clayton Christensen: “I keep my attention on the questions I need to ask so I can catch the issues of the future.”)203 When information truly is ubiquitous, when reach and connectivity are completely global, when computing resources are infinite, and when a whole new set of impossibilities are not only possible, but happening, what will that do to your business? Technology progress follows an inexorable upward trend. Follow that trend to a logical point in the future and ask the question: What does that mean for us?
When Eric worked at Sun in the ’90s, the company made computer workstations that offered the best value in the industry. It was a technology-driven company, confident that it could permanently maintain this price-performance advantage, but Sun was also threatened by the improving capabilities of “Wintel” PCs built with Intel processors and running Microsoft Windows operating systems. At that time, the hardest question for Sun was what would happen to Sun’s business when the Wintel price-performance finally surpassed Sun’s. What would the company do when the advantage to which it owed most of its success and profitability was gone? When Eric posed that question to President Owen Brown and CEO Scott McNealy, their conclusion was that Sun could never lower their costs to be competitive with the PC industry. In other words, they didn’t have a good answer (and neither did Eric). That was a problem of course, but the bigger problem is what happened next: Nothing. No one took a substantive action item. In April 2000, Sun’s market capitalization was $141 billion. By 2006, Windows-based servers had taken over the market, while the share of Sun’s machines languished in the single digits. Sun was sold to Oracle in 2009 for $7.4 billion.
In ongoing companies there are always hard questions, and they often don’t get asked because there aren’t any good answers and that makes people uncomfortable. But this is precisely why they should be asked—to keep the team uncomfortable. Better for that discomfort to come from friendly fire than from a competitor intent on killing you for real—as Eric learned at Sun. If there aren’t good answers to the hardest questions, then there is at least a silver lining. Those hardest questions that have no easy answers can be very effective in mitigating the risk-averse, change-fighting tendencies of big-company culture. They are the imminent hanging that, as Samuel Johnson noted, can concentrate the mind so wonderfully.204
Start by asking what could be true in five years. Larry Page often says that the job of a CEO is not only to think about the core business, but also the future; most companies fail because they get too comfortable doing what they have always done, making only incremental changes. And that is especially fatal today, when technology-driven change is rampant. So the question to ask isn’t what will be true, but what could be true. Asking what will be true entails making a prediction, which is folly in a fast-moving world.205 Asking what could be true entails imagination: What thing that is unimaginable when abiding by conventional wisdom is in fact imaginable?
As Vinod Khosla points out, in 1980 it was hard to imagine that microprocessors would be everywhere, not just in computers but in cars, toothbrushes, and just about everything else.206 In 1990, when cellular telephones were the size of a sewing machine and cost a fortune, it was hard to imagine they would be smaller than a deck of cards and cost less than a night at the movies. In 1995, it was hard to imagine that the Internet would have over three billion users and over sixty trillion unique addresses. Microprocessors, mobile phones, and the Internet are all ubiquitous today, but virtually no one predicted that when they were in their incipient stages. And yet we all keep making the mistake: The general reaction when Google’s self-driving car was announced was incredulity. Cars that drive themselves couldn’t actually happen, could it? We can’t imagine it not happening.
So forgo conventional wisdom, crank up that imagination, and ask yourself what could happen in your industry in the next five years. What could change most quickly, and what will not change at all? Then once you have an idea of what the future could hold, here are some more hard questions to consider.
How would a very smart, well-capitalized competitor attack the company’s core business? How could it take advantage of digital platforms to exploit weaknesses or skim off the most profitable customer segments? What is the company doing to disrupt its own business? Is cannibalization or revenue loss a frequent reason to kill off potential innovation? Is there an opportunity to build a platform that can offer increasing returns and value as usage grows?
Do company leaders use your products regularly? Do they love them? Would they give them to a spouse as a gift? (This obviously isn’t applicable in a lot of cases, but it’s a powerful thought experiment.) Do your customers love your products? Or are they locked in by other factors that might evaporate in the future? If they weren’t locked in at all, what would happen? (Interesting corollary to this question: If you forced your product people to make it easy for customers to ditch your product for a competitor’s, how would they react? Could they make your products so great that customers want to stay, even if they don’t have to?)
When you go through your pipeline of upcoming new major products and features, what percentage of them are built on unique technical insights? How many product people are on the senior leadership team? Does the company aggressively reward and promote the people who have the biggest impact on creating excellent products?
Is hiring a top priority at the C-suite level? Do top executives actually spend time on it? Among your stronger employees, how many see themselves at the company in three years? How many would leave for a 10 percent raise at another company?
Do your decision-making processes lead to the best decisions, or the most acceptable ones?
How much freedom do employees have? If there is someone who is truly innovative, does that person have the freedom to act on his ideas, regardless of his level? Are decisions on new ideas based on product excellence, or profit?
Who does better in the company, information hoarders or routers? Do silos prevent the free flow of information and people?
These are tough questions, and there are likely no obvious solutions to the problems they spotlight. But there certainly won’t be solutions if the questions never get asked. Incumbents usually fail to understand how quickly they can be disrupted, but asking these questions can help them discover the reality. It is also a great way to attract and invigorate the best smart creatives, who are drawn not only to the challenge, but to the honesty of the challenge. “Thank god, someone around here is finally asking the tough questions!” they will say. “Now we can get started on finding the answers.”
But this brings up one more hard question: Are you in the right place to attract the best smart creatives? One of the interesting effects of the Internet, mobile, and cloud technologies is that business hubs have grown more powerful and influential. We used to think that the advent of Internet and other communication technologies would lead to more hubs springing up and reduce the importance of existing ones, but in fact the opposite is true. There may indeed be new, small clusters of activity in various industries, but the clusters that already existed have only increased in importance. When it comes to smart creatives, physical location matters more than ever.
This is why, for example, even as countries all over the world try to re-create the technology magic of Silicon Valley, many of their native smart creatives who strive for technology careers leave those countries to go to Silicon Valley. (We are always amazed at the array of languages we hear in Google cafés.) They find that they can have a far greater impact from California than from their home country, and the allure of gathering with other smart creatives of the same ilk often outweighs that of staying close to home. The same goes for hubs in finance (New York, London, Hong Kong, Frankfurt, Singapore), fashion (New York, Paris, Milan), entertainment (Los Angeles, Mumbai), diamonds (Antwerp, Surat), biotech (Boston, Basel), energy (Houston, Dhahran), shipping (Singapore, Shanghai), cars (southern Germany), and most other industries. Any company that wants to build a new venture needs to ask itself the question: Do I go to the smart creatives, or find a way to get them to come to me?
The role of government
Governments also have important decisions to make. They can stand side by side with incumbent businesses, expending their energy to try to stave off the forces of change. This is the natural path of politicians, since incumbents tend to have a lot more money than disrupters and are quite expert in using it to bend the political will of any democratic government. (New challengers usually fail to understand the extent of the legal and regulatory tools that incumbents have in their arsenal.) But, just like businesses, governments have the option to encourage disruption and create environments where smart creatives can thrive. They can choose to have a bias toward innovation.
It starts with education, and not just the traditional K–12, college, and university formats. Education is going to change, and governments should favor disruption over incumbency (currently, they tend to do just the opposite). Technology platforms will help us identify our individual strengths and weaknesses with greater precision, and provide us with educational options customized to what we want to do. As the purveyors of public education, governments can aggressively pursue this model of customized, flexible, lifelong education, particularly for post–high school teens and adults.
A digital infrastructure is a must-have, as is an immigration-friendly policy. Most important, though, is the freedom to innovate. Regulations get created in anticipation of problems, but if you build a system that anticipates everything, there’s no room to innovate. Furthermore, incumbents have a big influence on the creation of regulations, and there is often a lot of movement between the public and private sectors, so the people who are making and enforcing innovation-killing regulations today become the executives in the private sector who benefit from them tomorrow. There always needs to be space in the regulatory environment for a new company to enter.
For example, in the US automotive industry a new entrant, Tesla, is running into regulatory roadblocks in several states that are preventing it from selling directly to consumers.207 The regulations protect auto dealers and reduce consumer choice in those states. During the next round of automotive innovation, self-driving cars, there will be an accident. Someone will get hurt or killed, which may have the effect of casting doubt on the entire industry of self-driving cars. When that happens, governments should resist the impulse to enact highly restrictive regulations, similar to the UK’s nineteenth-century “red flag” law,208 that force the new technology to jump through much higher safety hoops than regular, people-operated cars (which crash too, with frightening regularity and results). If data empirically show that a new way of doing things is better than the old way, then the role of government isn’t to prevent change but to allow the disruption to occur.
Big problems are information problems
As industries blow up and get re-formed, incumbents adapt or wilt, and new ventures grow, powered by visionary leaders and their ambitious smart colleagues, things will get better. We are technology optimists. We believe in the power of technology to make the world a better place. Where others see a dystopian future like The Matrix, we see Dr. Leonard McCoy curing the Saurian virus with a wave of his tricorder (and celebrating with a shot of Saurian brandy and a tranya chaser.)209 We see most big problems as information problems, which means that with enough data and the ability to crunch it, virtually any challenge facing humanity today can be solved. We think computers will serve at the behest of people—all people—to make their lives better and easier. And we are quite sure that we, as a couple of Silicon Valley guys, will come under a lot of criticism for this Pollyannaish view of the future. But that doesn’t matter. What matters is that there is a bright light at the end of the tunnel.
There are solid reasons underlying our optimism. The first is the explosion of data and a trend toward the free flow of information. From geological and meteorological sensors to computers that record every single economic transaction to wearable technology (such as Google’s smart contact lenses)210 that continuously tracks a person’s vital signs, types of data are being collected that simply have never been available before, at a scale that was the stuff of science fiction only a few years ago. And there is now practically limitless computing power with which to analyze that data. Infinite data and infinite computing power create an amazing playground for the world’s smart creatives to solve big problems.
This will result in greater collaboration among smart creatives—scientists, doctors, engineers, designers, artists—trying to solve the world’s big problems, since it is so much easier to compare and combine different sets of data. As Carl Shapiro and Hal Varian note in Information Rules, information is costly to produce but cheap to reproduce.211 So if you create information that can help solve a problem and contribute that information to a platform where it can be shared (or help create the platform), you will enable many others to use that valuable information at low or no cost. Google has a product called Fusion Tables, which is designed to “bust your data out of its silo” by allowing related data sets to be merged and analyzed as a single set, while still retaining the integrity of the original data set. Think of all the research scientists in the world working on similar problems, each with their own set of data in their own spreadsheets and databases. Or local governments trying to assess and solve environmental and infrastructure issues, tracking their progress in systems sitting on their desks or in the basement. Imagine the power of busting down these information silos to combine and analyze the data in new and different ways.
Speed is another hopeful factor. Thanks to technology, latency—the time between action and reaction—is getting much shorter. Again, this is a place where taking a historical view can be helpful in bringing the concept into focus. What economists call “general purpose technologies” (the steam engine or electricity are good examples) historically have taken a long time to go from invention to application to changing the fabric of how people live and markets operate. The Watt steam engine was developed in 1763 but it took the better part of two hundred years before the railroads transformed Kansas City from the trailhead of the cattle drive to a metropolis with a livestock exchange. By contrast, Netscape Navigator launched in 1994, and Jonathan proudly hooked up some of the world’s first cable modems for Excite@Home in 1998. Less than a decade later these modern communications technologies had transformed the way we communicate, hook up, shop, order food, and hail rides. The beauty of speed, however, is in the eye of the beholder: It seems like a bad thing when you are being disrupted, since it is all upon you so quickly. But when you are building new ventures, the acceleration of everything works in your favor.
And the advent of networks is giving rise to greater collective wisdom and intelligence. When reigning world champ Garry Kasparov lost his chess match to IBM’s Deep Blue computer in 1997, we all thought we were witnessing a seminal passing of the torch. But it turns out that the match heralded a new age of chess champions: not computers, but people who sharpen their skills by collaborating with computers. Today’s grandmasters (and there are twice as many now as there were in 1997)212 use computers as training partners, which makes the humans even better players. Thus a virtuous cycle of computer-aided intelligence emerges: Computers push humans to get even better, and humans then program even smarter computers. This is clearly happening in chess; why not in other pursuits?
The future’s so bright…
It is hard for us to look at an industry or field and not see a bright future. In health care, for example, real-time personal sensors will enable sophisticated tracking and measurement of complex human systems. Combine all that data with a map of risk factors generated by in-depth genetic analysis, and we will have unprecedented abilities (only with an individual’s consent) to identify and prevent or treat individual health issues much earlier. Aggregating that data can create platforms of information and knowledge that enable more effective research and inform smarter health-care policies.
Health-care consumers suffer from a dearth of information: They have virtually no data on procedural outcomes and doctor and hospital performance, and often have a hard time accessing their own health data, especially if it is held by different institutions. And pricing for medical services, medicine, and supplies is completely opaque and varies widely from patient to patient and facility to facility. Just bringing even a basic level of information transparency to health care could have a tremendous positive impact, lowering costs and improving outcomes.
Transportation will be another industry full of disruption and opportunity. What will happen when every car can drive itself? Ownership models will change, since personal car services will drop in price and become even more responsive. The only reason for owning a car will be for pleasure, not transportation. This will force planners to rethink transportation networks.
In financial services, more detailed information means more customized services. Today, for example, auto insurers are already starting to use information such as distance driven and location to assess the chances of a driver having an accident. How much smarter could they be if they agreed to lower your rates in exchange for getting access to all of your car’s data: speed, location, operating hours, distances driven, traffic conditions, and maintenance records? Perhaps you wouldn’t take the offer, but would you accept it for the teenage drivers in your family, hoping it would make them drive more safely?
In creative industries, there is more outstanding content and talent than ever before, and demand for it (at least when measured by media consumption) has never been higher. Despite the vast amounts of crummy, CGI213 -driven action movies, technology has also created new ways for each of us to enjoy shows that rely on old-fashioned storytelling, like House of Cards or Game of Thrones, when we want to watch them, and on the devices of our choosing, be it a flat-screen, laptop, or wearable, glasses-like device. The Internet has decimated traditional media business models, but new ones have and will continue to emerge in their place. The result will be a much bigger, more fragmented and chaotic market for creators and endless choices for consumers.
Whether it’s in fighting crime (analyzing crime patterns to enable “predictive policing”), agriculture (data-rich soil maps aiding poor farmers), pharmaceuticals (sharing information to speed up drug development), defense, energy, aerospace, or education, every one of these pursuits will be transformed by the forces of technology in the first half of the twenty-first century, creating spectacular new products, birthing brand-new businesses, and replacing economic malaise with new jobs and development. And each one of these changes will be fomented by a small team of determined, empowered smart creatives.
This is what we believe.
The next smart creative
The two of us are not immune to these forces of change. For all of the things we have learned and then were forced to relearn, there are many more that we don’t know. As much as we try to stay on top of technology and how it impacts our industry, we simply can’t grasp it the way the next generation of smart creatives does. We grew up in an era when you used a landline telephone to ask someone out (and you called it a “date,” not “just hanging out”), you went to movies, and broadband was when you got a bigger mailbox. We see the new breed, day in and day out, and marvel at their confidence and smarts. They tell us what’s up and what’s going to happen, and when it comes to deciding what to do next, they tell us as often as we tell them. Such is our fate, surrounded by up-and-coming smart creatives.
We are certain that for every one of these rock stars we meet in our daily work, there are dozens or even hundreds more who are doing their best to unseat us from our perch. Maybe all of them will fail, but probably not. Probably, somewhere in a garage, dorm room, lab, or conference room, a brave business leader has gathered a small, dedicated team of smart creatives. Maybe she has a copy of our book, and is using our ideas to help her create a company that will eventually render Google irrelevant. Preposterous, right? Except that, given that no business wins forever, it is inevitable.
Some would find this chilling. We find it inspiring.
We must start by thanking Larry Page and Sergey Brin for their wisdom and friendship and for the incredible company that the two of them started. Google’s founders are really as good as we describe them. The privilege of working with the two of them every day, to learn about and understand the future, is a once-in-a-lifetime gift. Many of the brilliant things that made Google so great—the strategy, culture, and emphasis on hiring excellence—were set well before either of us joined the company. Imagine having, in your mid-twenties, the presence of mind and the vision to see what Google would be and could do. Over and over, Larry and Sergey pushed hard to challenge convention, question authority and incumbency, and go their own way in building a truly great company. Google not only changed our lives, but it changed and continues to change the lives of billions of people, every day, everywhere. There is no adequate way to thank them for what they have done for us except to say we are humbled by their support and by everything they do.
Much like Google itself, this book was made possible through the help of a lot of amazing, interesting, caring, fun, good people. We are grateful for that help, but even more so for having had the privilege to work with and know these smart creatives as both colleagues and friends. Thank you to…
Ann Hiatt, Brian Thompson, and Kim Cooper, who always found time amidst crazy schedules for the authors to meet and who gave us plenty of good feedback. You manage the chaos with serenity.
Pam Shore, who began her journey with Eric at Novell and was very much a part of building Google and his staff.
Scott Rubin, Meghan Casserly, and Emily Wood, who are PR people who know how to have interesting conversations. We look forward to having many more of them.
Rachel Whetstone, who was the other person on the to: line when Eric sent the email to Jonathan suggesting we do this book. Rachel has been our communications partner for nearly a decade and a partner on this book since its inception. She is a tireless advocate not only for Google but for always doing the right thing by people. Our thank you to Rachel is for far more than just her assistance in this book.
Kent Walker and Marc Ellenbogen, a pair of brilliant lawyers who got off their horses, rolled up their sleeves, and helped us make the book so much better. Marc was particularly helpful, and his advice seemed to get even more sage during that week he worked with us while on his Caribbean vacation.
Dennis Woodside, who somehow found the time to read our book and give us his thoughts while leading Motorola.
Urs Hölzle, the founding father of many of Google’s people-management and hiring practices.
Alison Cormack, who is simply the best reader ever and perhaps the most gracious Googler around.
Jared Cohen, Eric’s partner on The New Digital Age, who learned all about publishing just in time to help us.
Laszlo Bock, who helped preserve Google’s culture and standards as we grew, whose upcoming book on talent gets into the nitty-gritty details of how to make all this happen, and who always seems to be smiling, perhaps because he used to appear on Baywatch.
Nikesh Arora, whose invitation to address his team started this whole project.
Susan Wojcicki, Salar Kamangar, Marissa Mayer, and Sundar Pichai, who taught Jonathan that sometimes a good manager just needs to get out of his people’s way. If a manager’s work product is the sum of his people’s, then Jonathan stands on a mountain created by these four.
Lorraine Twohill, who helped show us the Googley, smart-creative approach to creating truly amazing, inspiring art disguised as marketing.
Clay Bavor, one of the smartest creatives we know and whose work speaks to the culture of Google. (Google his weekend projects “The Google Logo in 884 4×6 Photographs” and “Clay Bavor Lincoln Portrait in Pennies.”)
Brian Rakowski, who had the good sense to include page numbers and searchable word strings in the multiple sets of comments he provided.
Margo Georgiadis, whose perspective on how C-level execs in big companies think was a constant source of insight.
Colin McMillen, whose Memegen invention is only one of the many cool things he’s done.
Prem Ramaswami, who gave us the perspective of a Harvard Business School teaching fellow and made suggestions about how to make the work accessible to students.
Devin Ivester, our resident expert in all things books and movies; creative whizzes Gary Williams, Ken Frederick, and Lauren Mulkey, who contributed a lot of great ideas that we didn’t use; and Jonathan Jarvis, whose design created a book that looks more elegant and handsome than its authors ever do. And that’s saying something.214
Hal Varian, who makes economics entertaining. That’s saying something too.215
Alan Eustace, who personifies Googley so much that he, with Jonathan’s help, wrote the first Googler handbook.
Shona Brown and David Drummond, who for years were the other two members of the management hiring review committee with Jonathan.
Cathay Bi and Chadé Severin, who calmly supported Jonathan in his role running products for Google and have been thoughtful critics from the outset of this project.
Jeff Huber, who worked with Jonathan at Excite@Home and showed up at Google to build a robust ad and revenue engine so that Jonathan could focus on managing smart creatives.
Patrick Pichette, whose operational rigor, Googley sensibilities, orange backpack, and I-ride-my-bike-to-work-even-when-it’s-raining attitude continue to inspire us.
Gopi Kallayil, who is not only the best presenter we’ve ever known but a constant critic with insightful improvements.
Jill Hazelbaker, to whom Jonathan always turns, especially when he creates a PR problem (which is often).
Jared Smith, who helped us with details on China and is a great leader of smart creatives himself.
Bill Campbell, who is the most gifted of all management coaches, with an eye to people and how organizations work. We didn’t know we needed a coach until we had one. Bill was a key person in the success of Apple and Google, now two of the most valuable corporations in America. Everyone smiles when Bill enters the room, and his ability to tell a great story is matched only by his humility in refusing the credit for the extraordinary role he has played in Silicon Valley and the success of generations of entrepreneurs.
John Doerr, Mike Moritz, Ram Shriram, John Hennessy, Art Levinson, Paul Otellini, Ann Mather, Diane Greene, and Shirley Tilgham, current and former Google board members who always take the long view of our impact on the world, and our customers, partners, and shareholders. As they should.
The many other current and former Googlers, who helped us get our stories straight while continuing to teach us some of the finer points of managing smart creatives: Krishna Bharat, Jeff Dean, Ben Gomes, Georges Harik, William Farris, Vic Gundotra, George Salah, and Martha Josephson (not technically a Googler, but as true a partner as can be found).
Jonathan’s family—wife Beryl, son Joshua, and daughter Hannah—who always remind him that he needs to walk that management talk about empowering others and staying out of their way at home as well as in the office. This helps keep Jonathan humble, and for that everyone who knows Jonathan should thank them.
Jonathan’s mother, Rina Rosenberg, who was a strong advocate for women and headed the Commision on the Status of Women for Santa Clara County. It is in deference to her that we start out describing our smart creative as a she. Jonathan’s father, Professor Nathan Rosenberg, who is formally and accurately footnoted in the text as a leading scholar on technological innovation. What greater acknowledgment can a son offer than to show his father that through all the years, he really was listening?
Karen, Gordon, and David Rosenberg, Jonathan’s siblings, from whom he learned a great deal about decision-making. The four of them continually fail to reach consensus on who owns the family title of smartest creative. Frankly, kids, it’s time for Mom and Dad to ring the bell.
Dr. Lorne Rosenfield, who regularly banters with Jonathan about great quotes and life wisdom. Several references in the book come from those conversations. Lorne’s daughter, Lauren, who provided more than enough corrections to prove her point that she is a more learned literary critic than Jonathan. And her brother Michael, who burnished his smart-creative credentials by giving us plenty of examples that he assures us will resonate with the college set.
Dan Chung, who had the insight that the original manuscript was “written with entrepreneurs in mind” but could be expanded to be “useful to any businessperson.”
Matt Pyken, who helped polish Jonathan’s papers in college and lent us a “Hollywood eye” for dramatic flair and storytelling.
Glenn Yeffeth of BenBella Books, who was the only expert on publishing Jonathan could ask for help when he embarked on this project.
Adam Grosser, who rejected misguided jokes that were not funny and generally helped elevate the tone and encouraged us to be more rigorous in our definitions.
Professors Susan Feigenbaum and Gerald Eyrich, who were prescient in their insistence that Jonathan learn statistics and provided the necessary adult supervision to help him complete his BA.
Professor and Dean Jeff Huang, and his colleague Julia Easley, who read the manuscript “like a student thesis” and provided almost as many corrections, and mercifully omitted a grade.
Professor David Teece, who gave this a read from an academic economist’s perspective and pointed us at much of the excellent additional literature.
Gary Leight, Betsy Leight, Dora Futterman, Libby Trudell, Cathy Gordon, James Isaacs, Dean Gilbert, and Richard Gingras, who are all former Jonathan bosses. Jonathan is eternally grateful for your wisdom and forbearance.
Professor Jeff Ullman, who took a scraggly Princeton teenager named Eric Schmidt and turned him into a computer scientist, almost before there was such a thing.
Bill Joy, Sue Graham, and Bob Fabry, who at Berkeley trusted Eric as a computer scientist enough that they built a team around him.
Mike Lesk and Al Aho, who while working on Unix at Bell Laboratories taught Eric the value of volume, open source, and scale.
Jim Morris, Butler Lampson, Bob Taylor, and Roy Levin of Xerox PARC, who invented the future.
Scott McNealy, Andy Bechtolsheim, Bill Joy, Vinod Khosla, Bernie Lacroute, and Wayne Rosing of Sun, who gave Eric his first hands-on experience in managing in a business. Only in tech would a person with no prior management experience be trained on the job so very well.
Raymond Nasr and John Young at Novell, where the journey was the reward.
Peter Wendell, who gave Eric the opportunity to teach at Stanford’s Graduate School of Business, and the thousands of students for whom Eric initially formalized his thoughts on “lessons learned the hard way.”
Nishant Choksi, whose beautiful and fun illustrations perfectly capture our points in ways that we couldn’t have imagined.
Melissa Thomas, a fact-checking whiz, who we would never, ever want to face in a game of Jeopardy!
Marina Krakovsky, our research partner, who always goes about two steps farther than we expect. She is as insightful and thoughtful as she is diligent and thorough. All great things! She’s the best.
David Javerbaum, a world-class humor writer who helped make us funny too, or at least funnier. One of our proudest moments came when David saw one of the jokes that we had written and deemed it “not too bad.” Thank you, David, for your help, and especially for that high praise.
Jim Levine, our agent, who helped us understand the publishing world, and our editor John Brodie, who guided us wisely from rough manuscript to finished work, from Microsoft opening to Downton Abbey conclusion. And we guided John to see the awesomeness of working with Google Docs.
Sometime in the mid-’70s, a couple of kids met while pumping quarters into the world’s first coin-operated video game, Galaxy Game, which resided in the Coffee House café at Stanford’s Tresidder student union. Jonathan regularly vanquished Alan Eagle at Galaxy, but the two were more evenly matched in their classes at Gunn High. While they were battling for space supremacy and tackling chemistry and math, they could not have possibly predicted that thirty years later they would start working together at a company called Google. Or that nearly forty years later they would collaborate on a book about business and management. Yet that’s exactly what happened. Imagine the unimaginable, indeed. Thank you to our coauthor, Alan Eagle.
A Note About the Authors
Eric Schmidt joined Google in 2001 and helped grow the company from a Silicon Valley start-up to a global leader in technology. As executive chairman, he is responsible for the external matters of Google: building partnerships and broader business relationships, government outreach and technology thought leadership, as well as advising the CEO and senior leadership on business and policy issues. From 2001 to 2011, Eric served as Google’s chief executive officer.
Prior to joining Google, Eric held leadership roles at Novell and Sun Microsystems, Inc. He holds a bachelor’s degree in electrical engineering from Princeton University as well as a master’s degree and PhD in computer science from the University of California, Berkeley. He is a member of the President’s Council of Advisors on Science and Technology and the Prime Minister’s Advisory Council in the UK, and serves on the boards of the Economist Group, the Mayo Clinic, and Khan Academy. Eric’s philanthropic efforts, through the Schmidt Family Foundation, focus on climate change, including support of ocean and marine life studies at sea, as well as education, specifically cutting-edge research and technology in the natural sciences and engineering.
Jonathan Rosenberg first met Larry Page and Sergey Brin in 2000 and finally accepted a job at their company the third time they offered it, more than two years later. He served as senior vice president at Google and ran the Google product team until April 2011. In that role, he oversaw the design, development, and evolution of Google’s products for consumers, advertisers, and partners. He helped develop the company’s hiring processes and was influential in setting its communications and marketing practices. Today Jonathan is an advisor to Google CEO Larry Page.
Prior to joining Google, Jonathan ran products and services at Excite@Home, managed the eWorld product line for Apple Computer, and directed product marketing for Knight Ridder Information Services. Jonathan holds an MBA from the University of Chicago and a bachelor’s degree with honors in economics from Claremont McKenna College, where he graduated Phi Beta Kappa.
Alan Eagle has been a director of executive communications at Google since joining the company in 2007. In that role, he led speechwriting and other communication activities for several Google executives, including Eric and Jonathan.
Alan has held sales and product management roles at several Silicon Valley start-ups, including Tellme Networks and Octel Communications. He holds a computer science degree from Dartmouth College and an MBA from the Wharton School.