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Google it!HOW SERGEY BRIN & LARRY PAGE HAVE

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Page 22

HOW TO CONTINUALLY CREATE NEW MARKETS

Cover story

GOOGLE IT!HOW SERGEY BRIN & LARRY PAGE HAVE

BRAINWASHED US TO

022 AUSTRALIAN Business Solutions

| By Daniel Alef |

Regardless of the language, the word ‘Google’ is recognised

internationally and business analysts from around the world

have likened the phenomenon of ‘Googling’ to brainwashing.

It is synonymous with searching the internet and has entered

our lexicons in the same way ‘Xerox’ and ‘Kleenex’ did years

ago. But there is a major difference. The products developed by

Xerox and the Kimberly-Clark Corporation were significant and

useful but not world- or culture-changing innovations. Google

Inc., the company founded by Sergey Brin and Larry Page, has

altered the world we live in, with a profound impact on just about

everything we do.

The evolution of the term and the company is astonishing.

There were approximately two billion internet users worldwide in

2010, according to the UN’s International Telecommunications

Union. With more than 34,000 Google searches every second,

approximately half of all internet users visit Google daily. But

what is most astonishing is that this has taken place in just

13 years. London’s The Observer called Google “one of the

wonders of the world” from a technological and economic point

of view.

GOOGLE IT!HOW SERGEY BRIN & LARRY PAGE HAVE

BRAINWASHED US TO

AUSTRALIAN Business Solutions 023

024 AUSTRALIAN Business Solutions

It is almost as though the internet came first;

and Google second. Sergey Brin describes the

internet as “the repository of all our knowledge”,

a limitless and ever-expanding source of

information and ideas. If you look at the internet

as a virtual storehouse of knowledge, essentially

an enormous database, it does not take a lot

to figure out that it is only useful if it has an

effective system for retrieving the information,

one that embodies linkage, integration and

accessibility. Google’s search engine is such

system. And as the internet grows minute-by-

minute, the effectiveness and efficiency of the

search engine becomes vitally important.

Sergey Brin and Larry Page have created a

search engine that can delve through trillions of

documents and internet sites in a fraction of a

second. For example, a Google search for ‘Walt

Disney’ produces well over 49 million entries

and 24 million images in .08 seconds. That is a

lot of information to wade through, but Google

has also ranked these entries through a series

of proprietary algorithms that gives us the most

relevant material at the top of the search. Only

a handful of years ago people would have never

thought this to be possible.

Although Larry and Sergey set out to create

the ultimate search engine which, according

to Larry, “would understand exactly what you

wanted, and it would give you the right thing”,

they have also branched into other products,

some related to the search engine, but others are

what Google calls “emerging businesses.” In this

brief period of time they have also revolutionised

advertising while creating a company that has a

current market capitalisation in excess of US$

185 billion. According to Forbes, in 2010 Larry

and Sergey were two of the wealthiest men on

Earth, each with a net worth of US$17.5 billion.

Like other young, uber-successful

entrepreneurs of the digital age, Sergey

and Larry are exceedingly bright, brash and

confident, but they lacked any relevant work

experience prior to starting their own company.

However, it was a nearly seamless transition

from academia to the formation of an enduring

corporate megalith. There were no corporate

failures to learn from and no executives to

teach them the ropes and nurture their business

practices and skills. So, how did Larry Page

and Sergey Brin make Google the institution it

is today? Here are some tips from creators of

Google:

1. Build On What You Know

The most successful entrepreneurs and titans

of industry build their enterprises on a solid

foundation of experience and knowledge in

their respective fields. They normally have other

attributes – such as passion, determination,

work-ethic and vision – but the groundwork

begins earlier as they forge their skills and

knowledge through work and practical

experience. Henry Ford was an excellent

mechanic with extensive knowledge of wagons,

horseless carriages and engines before he

embarked on his own company. Milton Hershey

worked as a confectioner and had three failed

companies before he established Hershey

Chocolate. Although for Segey and Larry, it was

a little different.

The internet was a relatively new technology

when they formed Google. Entrepreneurs

involved in a nascent field like the internet had

little opportunity for practical work experience;

they had to build from scratch, rely on their own

resources and go with their instincts. Instead

of corporate or business experience, Larry

and Sergey focused on what they knew best –

computer science. They had been passionate

about computers and mathematics from an

early age and by the time they were in graduate

school studying computer science, they were

quickly becoming experts in their field.

Google’s search engine was born at Stanford

University when Larry embarked on a project to

collect links on the web in order to study how

pages were linked to one another. “I figured I

could get a dissertation and do something fun

and perhaps practical at the same time, which

is really what motivates me”, he said. First, he

searched for links to the Stanford home page,

where he discovered 10,000 people linked to

Stanford. Then the question arose: which links

to show and how to rank them? The search

engines of the time did not understand ranking

– which pages are more important – and simply

produced random results for a particular search

topic. At the same time, Sergey was studying

data mining – the process of analyzing large

amounts of data and seeking out patterns and

trends. Larry and Sergey joined forces and it

was their combined knowledge and vision that

made the Google vision become a reality.

2. Focus On Developing One Core Product

Today, Google has an extensive line of products

and services and a rainbow of enterprises and

applications, but the underlying premise for

the formation of Google, and what made it

initially successful, is its search engine. While

at Stanford, Larry and Sergey collaborated on

a paper entitled ‘The Anatomy of a Large-Scale

Hypertextual Web Search Engine’. The research

morphed into BackRub and subsequently

PageRank, two newer iterations of the search

engine. They saw this as an open-source,

non-commercial project – a search engine that

would be available for public use. They were

adamantly opposed to ad-supported services.

Sergey believed, “Advertising-funded search

engines would be inherently biased towards

the advertisers and away from the needs of the

consumers.” The search engine remained their

sole focus.

From inception, Sergey and Larry put all

their meager resources into developing this one

product. Initially they worked out of their dorms

and small university offices, buying computer

equipment on their credit cards and converting the

computers into servers. Following the formation

of Google Inc. in 1998, and the influx of capital

from several angel investors, Larry and Sergey

continued to devote all their energy to improving

their core product – the search engine.

3. Set High Goals And Pursue Them Boldly

Sergey and Larry have consistently reached

beyond their grasp and when the goals proved

within reach, moved the milestone further away.

They were not looking for a great search engine:

they sought, and are still seeking, the “perfect

search engine”, one Larry defined as something

“that understands exactly what you mean and

gives you back exactly what you want.”

Setting potentially unattainable goals is not

limited to the product itself. Needing capital to

fund their growth, Sergey and Larry approached

two prominent venture-capital firms in Silicon

Valley: Kleiner Perkins Caufield & Byers (KPCB)

Cover story

and Sequoia Capital. Getting these major

venture capital firms to consider their request

for US$25 million was a brazen move that

typified the extraordinary confidence Larry and

Sergey had in their company, but it was even

bolder because they were only willing to give

up 20% of Google, establishing a valuation of

US$125 million for a one-year-old company

without revenue. Moreover, to avoid giving

any one party too much power on the Google

board, they demanded that KPCB and Sequoia

split the deal, something firms rarely do. But

Larry and Sergey were adamant. The two firms

ultimately acceded to their demands. Call it

boldness, but the potentially unattainable goal

was achieved.

4. Innovate, Innovate, Innovate

Innovation is frequently associated with product

and design but it also applies to other areas

of corporate entrepreneurship, including the

creation of unique revenue sources. Insisting

on maintaining an open-source search engine,

Sergey and Larry had to create a different

mechanism for income generation. In late 1999

and early 2000, Google began testing a program

to sell ad space on a Cost Per Mille basis, in

which the advertiser pays for exposure of an ad

to a specific audience, the dominant ad model

of the time. “It didn’t generate much money”,

Sergey acknowledged. Declining to use banner

ads, Google opted for their own model for

selling text ads. AdWords, launched in October

of 2000, allowed advertisers to create simple

ads that would appear next to the subject being

searched and the advertisers would only pay

when someone actually searched the page

where the ad appeared.

Three years later, Google enhanced its

advertising service by instituting a content-

targeted advertising program called AdSense,

designed to identify the meaning of a web page

and then automatically provide relevant ads.

From the public’s perspective, this provided

users with highly relevant ads, more specifically

related to a specific web page’s content.

Google’s press release called it an “innovative

advertising technology.” Users found relevant

advertising and advertisers received a five-

fold increase in average click-through rates

compared to traditional banner ads. Instead of

taking the traditional route and selling access to

their search engine, Sergey and Larry found a

unique and innovative way to generate revenue.

5. Grasp The Full Picture

Although the initial focus should be on the

development of the core product, successful

entrepreneurs like Larry and Sergey are

constantly viewing and analysing the larger

picture to stay ahead of the curve and determine

what products and services can be built around

the core, either through internal development

or acquisitions. However, this does not shift

the focus away from the company’s primary

product. Google continuously upgrades

its search engine to keep up with

the growing mountain of data

and number of surfers on the

internet, but Sergey and Larry

are casting a much wider

net.

While many of the products Google has

introduced in the past decade are related to

its search engine, they are also powerful in

their own right. These include Gmail, Google

Maps and GPS, Google Earth, Google News,

Google Books and Google+, the newest social

networking site.

Google has also ventured into “emerging”

businesses. Android, the internal operating

system for cell phones, has become the biggest

smartphone platform by worldwide shipments

in the second quarter of 2011, with a 48%

market share. And YouTube, the leading online

video program is so popular that it now takes up

22% of all mobile bandwidth usage with more

than two billion video views a week. YouTube

contributes more than a billion dollars in annual

revenue to Google. Nevertheless, Google’s

search engine remains one of the globe’s most

useful and utilitarian services.

6. Confidence Is Key

Inventor Charles Kettering once said that

people are often taken with new ideas so long

as they are just like the old ones. Innovators

are often met by skeptics who cannot see the

potential for a new technology. It is important

to discriminate between healthy criticism and

those who are negative to new ideas they do not

understand. To be successful, entrepreneurs

must have absolute faith and confidence in their

product and goals. Being told something cannot

be done does not mean it cannot be done.

Take it as a challenge, not a reason to quit or

change direction.

While at Stanford, Sergey and Larry

developed BackRub, the first version of their

search engine. At first they shopped BackRub

to potential suitors, including Excite, AltaVista

and Infoseek, but were met with indifference.

“We spent a lot of time talking to people . . .

trying to convince them our technology would

give them an edge”, Larry said. “But no one

really engaged with us. The crunch came when

the CEO of a major search company said that

search did not matter to him that much . . . That

astonished me.” Undaunted, Larry and Sergey

had sufficient confidence in their vision to forge

ahead and establish Google.

Cover story

028 AUSTRALIAN Business Solutions

7. Always Look Long Term

Most entrepreneurs and corporate executives

tend to focus on short-term results. Although

Google was incorporated in 1998, and PC

Magazine placed its search engine into its ‘Top

100 Web Sites’ for that year, Larry and Sergey

were still indifferent about generating revenue.

Their goal was to create the ultimate search

engine and to make it egalitarian and open-to-

all, one that would allow people to search the

internet without charge.

Generating revenue almost seemed like

an afterthought. Subsequently, Larry told

potential investors in Google’s initial public

offering, “We will not shy away from high-risk,

high-reward projects because of short-term

earnings pressure. Some of our bets have

gone extraordinarily well, and others have not.”

Moreover, “We will have the fortitude to do this.”

To be successful, entrepreneurs must have absolute faith and confidence in their product and goals. Being

told something cannot be done does not mean it cannot be done. Take it as a challenge, not a reason to

quit or change direction.

Cover story

030 AUSTRALIAN Business Solutions

8. Take Care of Your Employees

And They Will Take Care of You

Many companies take a carrot-and-stick

approach toward their employees, rewarding

them for exceptional deeds while creating a tense

work environment with extensive and, at times,

onerous rules and conditions. They expect –

and sometimes even demand – that employees

devote their time and energy to the company.

Google opted to take a different, subtler approach

toward enhanced employee productivity by

creating a friendly and nurturing environment.

Googleplex, the huge campus-like corporate

headquarters with offices in Mountain View,

California, offers employees an extensive array

of perks: a gym staffed with trainers; lap pools;

sand volleyball courts; video and other game and

entertainment rooms; first-rate dining from a host

of restaurants; and much more. Although these

perks were part of the corporate culture that Larry

and Sergey sought to develop, they also served

another economic interest: employees were

actually more productive – employees eating at

Googleplex, or working out at the campus gym,

were back at their computers more quickly than

if they had dined out or used outside facilities.

Employees could elect to come to work on limo

busses decked with work-stations, wi-fi and food.

In this environment, Google’s employees work

hard and are very productive.

In the scheme of things, Google is only just

getting started and we are yet to see its full

potential and power. Its core and founding

Google is the ‘go-to’ search engine on the internet, however, the principles that surround its rise to the top can

be applied every product and service, allowing them to also claim the much sougt-after status of a market leader.

Cover story

product, that is so heavily relied on today,

stemmed from an initial idea that was cleverly and

passionatly harnessed to create a vital tool that is

used by millions of people everyday for a range of

proffesional and personal reasons. Google is the

‘go-to’ search engine on the internet, however,

the principles that surround its rise to the top can

be applied every product and service, allowing

them to also claim the much sougt-after status of

a market leader.

Daniel Alef is an award-winning novelist, former

syndicated columnist, and author of more than

200 biographical profiles. Daniel is a former lawyer

and CEO and his wide range of biographical

profiles are available at Amazon, Apple’s

iBookstore, Barnes & Noble, Kobo and Sony.