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Why There Aren't More Googles (2008)

paulgraham.com

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Re: Why There Aren't More Googles (2008)

#41

Post by johbjo »

bertr4nd wrote: post #12

Something I don’t understand in this article is the “People won’t understand your ideas if they’re any good.” Like, the idea behind Google is, “Let’s make another search engine, but make it really good.” That’s not a crazy idea, is it? Was the problem that VCs thought existing engines were good enough and that Google’s wouldn’t be enough better to be worthwhile?

The crazy idea behind Google was that they had no feasible plan for monetization.

There was an early and obvious insight that fast and simple search would win, but ads at the time were gif banners and flash animation.

They tried adwords, and it worked.

Re: Why There Aren't More Googles (2008)

#42

Post by TeMPOraL »

benlivengood wrote: post #4
adamsmith wrote: post #2

> I've tried to explain this to VC firms. Instead of making one $2 million investment, make five $400k investments. Would that mean sitting on too many boards? Don't sit on their boards. Would that mean too much due diligence? Do less. If you're investing at a tenth the valuation, you only have to be a tenth as sure. This turned out to be absolutely right, and the That said with the benefit of more hindsight I think…

> That said with the benefit of more hindsight I think the reason there are no more Googles is that FAANG has a stronghold on the largest technology markets. And the FAANGs are willing to pay very large amounts of cash to acquire promising startups. EDIT: Also why is it that the majority of the large tech companies are essentially marketplaces? Is there really that much friction in traditional markets (physical goods…

Because in a tech gold rush, nobody wants to dig out gold, or even sell shovels - everyone wants to get rich by renting shop space to shovel sellers.

Re: Why There Aren't More Googles (2008)

#43

Post by spc476 »

bertr4nd wrote: post #12

Something I don’t understand in this article is the “People won’t understand your ideas if they’re any good.” Like, the idea behind Google is, “Let’s make another search engine, but make it really good.” That’s not a crazy idea, is it? Was the problem that VCs thought existing engines were good enough and that Google’s wouldn’t be enough better to be worthwhile?

At the time that Google entered the market, there were at least 16 other search engines in existence [1] and all Google did was search. They had the smallest front page of any of the search engines at the time. It was very refreshing, and Page Rank turned out to be incredible at returning results but the "making money" thing was still very unclear at the time.

I seem to recall they wanted to sell out to Yahoo for $10 million (1999? 2000?), but apparently, that was too much for Yahoo's liking.

[1] I only know this because I still have the bookmarks from the time on my machine. Back in 1996, I wrote a metasearch engine that queried 16 other search engines (http://www.conman.org/people/spc/refs/search/search.hp1.html).

Re: Why There Aren't More Googles (2008)

#44

Post by yuhong »

johbjo wrote: post #41
bertr4nd wrote: post #12

Something I don’t understand in this article is the “People won’t understand your ideas if they’re any good.” Like, the idea behind Google is, “Let’s make another search engine, but make it really good.” That’s not a crazy idea, is it? Was the problem that VCs thought existing engines were good enough and that Google’s wouldn’t be enough better to be worthwhile?

The crazy idea behind Google was that they had no feasible plan for monetization. There was an early and obvious insight that fast and simple search would win, but ads at the time were gif banners and flash animation. They tried adwords, and it worked.

AdWords dates back to 2000-2001. At the time they IPOed in 2004 they had 90%+ of revenue coming from advertising. They didn't adopt cookie based tracking (DoubleClick) until the 2007-2008 recession: https://en.wikipedia.org/wiki/Draft:Effects_of_the_2007-2008...

Re: Why There Aren't More Googles (2008)

#45

Post by unnouinceput »

Except there is another. It's called Chinese Google also know as Alibaba. And with EU regulations coming up I suspect another one will rise in Europe as well in next decade. Just give it time, Splinternet will happen and then each country will have its own Google.

Re: Why There Aren't More Googles (2008)

#47

Post by Bodhisattya »

Here is my reverse ask: Why should there be? Isn't being an extremely highly valued company with a near monopolistic grip on the search and ads market, an outlier? Also, I am just not sold on the idea that undervaluation is holding startups back. Money guys did undervalue Google, but betting that Google will "go google" is a rather outrageous bet by most standards.

Re: Why There Aren't More Googles (2008)

#48

Post by mkl »

spc476 wrote: post #43
bertr4nd wrote: post #12

Something I don’t understand in this article is the “People won’t understand your ideas if they’re any good.” Like, the idea behind Google is, “Let’s make another search engine, but make it really good.” That’s not a crazy idea, is it? Was the problem that VCs thought existing engines were good enough and that Google’s wouldn’t be enough better to be worthwhile?

At the time that Google entered the market, there were at least 16 other search engines in existence [1] and all Google did was search. They had the smallest front page of any of the search engines at the time. It was very refreshing, and Page Rank turned out to be incredible at returning results but the "making money" thing was still very unclear at the time. I seem to recall they wanted to sell out to Yahoo for $10…

1998, and $1 million: https://finance.yahoo.com/news/remember-yahoo-turned-down-1-...

Four years later Google turned down a $3 billion offer from Yahoo, asking for 5.

Re: Why There Aren't More Googles (2008)

#49

Post by nwatson »

graycat wrote: post #35

Yup: When I was looking for VC funding, lots of VC Web sites claimed to like innovation . Eventually I concluded much the same as in Phil's essay. The nutshell description I formulated was the VCs want a startup with a product/service easy enough for any grandmother to understand, traction growing up and to the right , in a huge market, with five founders, with all credit cards maxed out, with at least four of the sp…

The damage from nuclear bombs in Japan was marginal or on par compared to the damage from massive firebombing in a typical Japanese city in 1945. The effects of atomic bombs on Pacific Theatre outcome in WW2 is overrated.

Re: Why There Aren't More Googles (2008)

#50

Post by strikelaserclaw »

spirographer wrote: post #40

Companies fill ecological niches. When new technologies emerge there is room for a new apex species/(company), and a few smaller wannabes. There just isn't unlimited room for large companies to emerge, and that is the principal reason why there aren't more googles and facebooks around. In the end it has very little to do with VCs and entrepreneurs, except for the ones who happen to be in the right place at the right…

I think this is probably the closest to the truth.
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