Diary of a Financier

Bookshelf update: How Google Works

In Bookshelf on Wed 21 Jan 2015 at 06:21

Five takeaways from Eric Schmidt & Jonathan Rosenberg’s How Google Works, as embodied by the following excerpts…


1. New product development:
Technology has made developing an idea — from wireframing to prototyping to launch — so easy and inexpensive that projects should be substantially conceptualized and debugged early-on:

“Product excellence is so critical [because] the cost of experimentation and failure has dropped significantly… It’s ridiculously easy to imagine and create a new product, try it out with a limited set of consumers, measure precisely works and what doesn’t, iterate the product and try again, or throw it out…

“[So] don’t tell me, show me [your idea].”

Proof-of-concept comes first. Startups don’t have the capital backing (cash or cash flow) that a stalwart like Google has, so they don’t have the luxury of making these long term, experimental, moonshot investments. Thus, startups should focus on building a cheap minimally viable product (MVP) to prove its value and market demand. Then, once it’s attracted users, the business model (monetization) follows easily. [See below: “Customer-centric”]

2. Product launches:
Don’t load your first release with features; make the UI/UX simple and intuitive so you establish a brand that’s a solution for a niche problem — a core competency — delivering on the promise marketed to your first users:

“Under promise over deliver… ship and iterate… launch with high quality but a limited set of functions that [users] know will expand rapidly after launch…

“Marketing programs and PR pushes should be minimal at lunch… a soft opening… invest only when you get a lift.”

3. Marketing & communications:
Different people respond differently to different mediums, so use any and all multimedia/platforms available to reach people, whether coworkers or customers:

“Are you using the right media? Say yes to all forms… People assimilate information in all sorts of ways, so what works for some people won’t work for others.  If the message is important, use all the tools at your disposal to get it across: email, video, social networks, meetings and video conferences, even flyers or posters.”

4. Competition:
Obsessing over competitors is wasted energy that makes incumbents vulnerable to disruption by distracting them from focusing on future innovation:

“Business leaders spend much of their time watching and copying the competition… They are careful risk takers developing only incremental, low impact changes…

“If you focus on your competition, you will never deliver anything truly innovative.  While you and your competitors are busy fighting over fractions of a market-share point, someone else who doesn’t care will come in and build a new platform that completely changes the game.”

This is the case for Peter Thiel’s “durable monopoly” and Jeff Bezos’ “your job is to kill your own business.”  I wonder how Google is applying this to the iOS vs. Android duopoly?  Perhaps they’d say that Apple is the one obsessed with the competition, since Google contributes far less resources to its open Android mobile OS.

5. Customer-centric:
Never forget that “end users are the real users.” Don’t be like Motorola, whose Mobility unit talked about wireless carriers (like Verizon and AT&T) as their “customers,” as opposed to true end users (like phone hardware/contract consumers).

“Focus on the [end] user, and the money will follow.”

For example, when Google bought Keyhole, management couldn’t justify how it would help their bottom line, but Sergei convinced the board to do it because users would think it’s cool, thereby virally increasing users. It did, and eventually Google Earth sprang from the technology. To those user downloads, they also pushed Google Toolbar, a shortcut to all Google apps that increased search traffic and profits.

The “user-first” notion of ‘build something users will love and the business model will follow’ really shone-through in another Google book, In the Plex.  “Customers come first” is the evolution of yesteryear’s “the customer is always right,” as spotted in Jeff Bezos’ “missonary over mercenary” mantra and Jack Ma’s “customers first, employees second, and shareholders third” modus operandi.


#Entrepreneur #Startup #Product #Development $GOOG

  1. […] iterations of the same old internet business plan, just under a different name. [Previously: Focus on the end user & the money will follow; See also: Part 2 & Twitter renews deal with Google to provide real time search results] $TWTR […]

  2. […] End-users are a products real target #Target market #Do the right thing #Socially conscious #Don’t be […]

  3. […] X See also: How Google Works & Peter Diamandis (via […]


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