Posts Tagged: YouTube
I just finished reading “In The Plex”, Steven Levy‘s book on Google, and can highly recommend it to anybody who wants to better understand Google’s success. While many things are not completely new if you have followed the company for a while, the systematic recount of Google’s history and the decisions they have taken along the way offers some really unique insight.
If I had to condense Google’s success to a few factors, I would chose the following 4:
- Google’s culture: Google developed a very specific culture from the beginning on that even phrased a specific term for it: “Googly” stands for smarts, analytics, unique approaches, open communications,… and everything and everybody were measured against being “googly” enough – from the people that the company hired, to the way the office was designed to how the company communicated internally. This persistence to live a company’s culture every day and in every aspect that makes it powerful – and both founders were not only good in creating a unique culture but preserving it as the company scaled
- Obsession with data: everybody has probably heard about Google’s obsession with data but the company has taken it further than most people can imagine. Example: Google relied heavily on academic metrics in the recruitment process, to a point that the company was asking candidates with more than a decade of work experience for their college admission test score and GPA’s
- Pushing the boundaries: building and running your own data centres is probably not the first thing a company would think of given the large supply of cheap data centres around the world but with the rapid growth of the number of computers Google operated the company was continuously chasing for additional efficiencies that existing data centre providers could not or were not willing to provide. So it decided to build its own data centres by applying existing ideas that no one had yet put into practice, e.g. completely new ways to approach cooling. Google ultimately found ways to make it work and hence built data centres that were more efficient than the companies who’s main focus were data centres. Google’s history is full of such examples of pushing the boundaries of what seemed to be impossible at the outset and proved possible after Google tackled it.
- Acquisition strategy: Google is probably one of the best companies when it comes to acquisitions by combining acquisition discipline (by doing a very good job thinking through how a potential acquisition can (or cannot) help the company achieve its goals) with a smart way of integration the acquired company into Google (or even leaving it as a stand-alone unit if this turns out to be the better set-up as in the case of YouTube). This smart M&A strategy is how some of the most successful Google products were born: AdSense (Applied Semantics), Android or Google Analytics (Urchin). And I hope the same thing will happen with my portfolio company Sparkbuy that got acquired by Google yesterday.
- Keen On… Steven Levy: If You Want to Get Inside Google, Get ‘In The Plex’ (TCTV) + Book Giveaway (techcrunch.com)
- Review: In The Plex, by Steven Levy (mattcutts.com)
- Levy’s “In the Plex” Puts Google Under the Microscope (searchenginejournal.com)
I often get asked by investors and entrepreneurs alike how building a startup outside of Silicon Valley is possible and I always answer that it depends on what kind of company you are trying to build. So if you are trying to create the next Facebook, Google, YouTube, Twitter, or Foursquare and your company requires a large amount of funding and needs to be close to where the buzz is (because dozens of other startups are competing with you with exactly the same idea and the winner will take it all), then a “secondary market” like Denver / Boulder, San Diego, Seattle, Boston, Montreal or Vancouver is not the best place to be. But if you have carved out a niche for your company that is a bit off the beaten track, are comfortable to do more with less money, bootstrap longer and grow your company a bit more organically, then any of those secondary locations could be the perfect place to start and build your company. You might not have the same access to money and senior talent but you usually have much lower costs of operating your company, access to great engineering talent without competing with the Google’s and Facebook’s of the world (and the salaries that they are paying) and an environment that sometimes makes it easier to focus on the real value of a product for customers compared to chasing the latest hype.
Not sure if you can create big companies in places like Edmonton, Kelowna or Victoria? Yes, you can! Take Bioware, the Edmonton-based gaming company that the two founders Greg and Ray built over a decade in a city that did not have not a single gaming company before they started their company – sold to EA for close to a billion dollars. Or Kelowna’s Club Penguin, a company that was the first to create a virtual world for kids and sold to Disney for over $750 million. Or my own company AbeBooks that got built in Victoria, BC, over more than a decade before being sold to Amazon.
Great companies are being started in these markets every day – they will perhaps not be as glamorous as the Valley startups but will still create enormous value for customers and subsequently exit opportunities for entrepreneurs and investors alike.