Google Makes So Much Money, It Never Had to Worry About Financial Discipline • Hacker News Board

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#51

Post by gonehome » Thu, Dec 08, 2016, 6:02 PM UTC

Periodic wrote: post #40

muninn_ wrote: post #29

Earlier quoted context omitted.

I don't buy it. Many companies are able to get the perks, culture, and autonomy right without being a multi-billion dollar company. It does enable Google to do certain things (like moonshot projects) that smaller companies can't do, but a lot of the perks I've seen are replicated in other companies. In fact, I think your comment "Google doesn't do what it does to be successful, it does it because it is successful" is…

I tried to clarify the wording. I'm specifically trying to call out the structure of Google's management and the general way they approach problems. For example, even within the profitable Google portion of the business, they often have many competing projects. There will be competing search features, competing chat applications, competing cloud services. Google will make big speculative bets or internally competitiv…

It may end up that even Google can't afford to be unfocused - if they do end up losing their search engine ad revenue because it and standard websites become less relevant it'll probably be what's pointed at.

You can see their disorganization in their software and products - letting ideas like Google Voice that were ahead of their time languish until iMessage comes and takes over, lots of failed software launches etc.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#52

Post by espadrine » Thu, Dec 08, 2016, 6:02 PM UTC

ravitation wrote: post #41

espadrine wrote: post #37

Contrast Google's old way of managing bets with Tesla. When Google started working on self-driving cars, they went about it academically. They did not plan a sequence of stepping stones that they could sell. They meant to have a product in an indeterminate future which should be immediately perfect and better than a human, essentially not needing a wheel. Tesla went about it with an engineering perspective. First, ca…

It also helps when you're already making cars, which Tesla was.

True. That said, Apple's phone was successful against established manufacturers, and Android won without having to build a phone at all.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#53

Post by elcct » Thu, Dec 08, 2016, 6:04 PM UTC

Periodic wrote: post #11

So many companies try to emulate how Google works. There are multiple books, hundreds or thousands of articles. People speculate on the perks, the review structure, the hierarchy, the autonomy. However, when other companies try to imitate Google they always fail because they're missing a crucial piece: Billions of dollars in ad revenue Google doesn't work the way it does to be successful. It works that way because it…

And it shares just so much ad revenue with publishers so they don't starve but can't develop at the same time

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#54

Post by ravitation » Thu, Dec 08, 2016, 6:04 PM UTC

muninn_ wrote: post #39

ravitation wrote: post #32

Earlier quoted context omitted.

He's not talking about the perks. He's talking about the design of the organization, beyond the culture. The structures, the roles, the processes. Autonomy is a value, but values only influence design.

The post I responded to mentioned (and naturally I mentioned this as well) perks, autonomy, structure, etc... and then says that the missing piece is billions of dollars in ad revenue. So I pointed out that many companies are able to get these things right (/imitate Google), without billions of dollars in ad revenue. It's not the ad revenue. That's my contention.

What I meant is that "perks" are just an outcome of a certain organizational structure designed around a set of values.

There are multiple structures that allow for "perks", or are designed for autonomy. And, as you said, others have produced structures with similar results or based in similar values.

But, he's talking about the specific structures at Google.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#55

Post by digi_owl » Thu, Dec 08, 2016, 6:04 PM UTC

zigzigzag wrote: post #26

The robotics effort sounds like an absolute disaster. How shareholders haven't been demanding answers there is beyond me. Acquiring 11 companies to, apparently, satisfy Rubin's obsession with robots (it's named Android for a reason) and then trying to shut them all down or flog them off ... but nobody wants them? Yikes. How did they get so starry-eyed about Rubin that keeping him (also failed) was apparently worth su…

This bring to mind how Michael Dell decided to take the namesake company private so that it could focus on long term projects.

Similarly i can't shake the feel that the handset division of Nokia, never mind similar efforts at HP, got sunk because of board room having blinders for all but the quarterly earnings report.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#56

Post by vkou » Thu, Dec 08, 2016, 6:05 PM UTC

Periodic wrote: post #40

muninn_ wrote: post #29

Earlier quoted context omitted.

I don't buy it. Many companies are able to get the perks, culture, and autonomy right without being a multi-billion dollar company. It does enable Google to do certain things (like moonshot projects) that smaller companies can't do, but a lot of the perks I've seen are replicated in other companies. In fact, I think your comment "Google doesn't do what it does to be successful, it does it because it is successful" is…

I tried to clarify the wording. I'm specifically trying to call out the structure of Google's management and the general way they approach problems. For example, even within the profitable Google portion of the business, they often have many competing projects. There will be competing search features, competing chat applications, competing cloud services. Google will make big speculative bets or internally competitiv…

Yet, free markets beat out top-down managed economies because they have competing teams seeking to provide the same services.

Tech is, to an extent, a winner-takes-all market. If you build out two competing products internally, in the long run, it will cost you less then building one product, and having an outside competitor fight you for market share, by building that second product.

Case in point: I'm sure that Facebook would have loved it if one of their teams built Whatsapp. For 20 billion dollars, they could have funded a hundred competing internal products.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#57

Post by GCA10 » Thu, Dec 08, 2016, 6:07 PM UTC

Big companies seem to step in the same puddle, every time they try to set up one of these "breakthrough incubator" projects. They pick fascinating projects. They hire lots of smart people and give them great autonomy. But they inadvertently set up incentives that lead to the repeated creation of LINS (lavishly impractical non-solutions). And then the plug gets pulled.

I think the key problem is that the research team starts optimizing for periodic demo days with the boss. That's a sheltered environment in which clever (and easy to demonstrate) technical features are rewarded, and real-world annoyances involving customers, social norms, regulators, pricing, etc. are put off for "later." Not only are ecosystem problems not addressed, they aren't even vigorously considered.

The technology behind Google Glass was quite clever and some variant of that idea may eventually work. But what arrived on the market was LINS to an extreme. You can find similar failures in Detroit's concept cars, Paul Allen's first go at Vulcan, Xerox Parc's grossly overpriced STAR, etc.

I'm not sure how to fix this. Within the big-company budgeting system, it takes a daring CEO to allow super-innovative projects to break the usual rules about desired five-year ROIs. Once such a CEO takes a stand, it's really hard for him/her to get out of the way.

Suppose these CEOs do miraculously set up a system that approximates the scrappy, minimum-viable experiments of a true startup, with the marketplace being the true boss. That still is problematic. When a big company is pushing MVPs into the marketplace, the public scrutiny and scorn makes it really hard to recover from an awkward start -- and keep iterating in peace.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#58

Post by draw_down » Thu, Dec 08, 2016, 6:07 PM UTC

It's funny to me that investors and biz press are surprised that Brin & Page meant what they said in the 2004 letter.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#59

Post by Mahn » Thu, Dec 08, 2016, 6:08 PM UTC

cooper12 wrote: post #31

I'm no businessman, but does anyone else feel this will kill a lot of potential innovation? Not every project pays dividends immediately, and some are worth pursuing even at a long-term loss. (imagine if we all had fiber today and bandwidth was ridiculously abundant. Just how different would the internet be, just as when electricity became abundant?) Also I understand that Google is a business, but the need for a bus…

I don't imagine that Google will become super conservative and short sighted overnight; it's probably more about managing moonshots a bit more closely rather than not betting in them at all. It wouldn't be Google if they stopped placing bets that don't pay off immediately.

Re: Google Makes So Much Money, It Never Had to Worry About Financial Discipline

#60

Post by digi_owl » Thu, Dec 08, 2016, 6:09 PM UTC

cooper12 wrote: post #31

I'm no businessman, but does anyone else feel this will kill a lot of potential innovation? Not every project pays dividends immediately, and some are worth pursuing even at a long-term loss. (imagine if we all had fiber today and bandwidth was ridiculously abundant. Just how different would the internet be, just as when electricity became abundant?) Also I understand that Google is a business, but the need for a bus…

Very much so.

Michael Dell effectively rescued his company from board room rampant shorttermism some years back because of just such a problem.

And we basically witnessed Nokia and HP effectively crash and burn because of boardroom demands for short term profits while the execs were trying to pull of long term "pivots".