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Tuesday, March 20, 2007

Eric Schmidt on Entrepeneurs, Censorship and More

I-Innovate interviewed Google CEO Eric Schmidt and put up the MP3.

I’ve transcribed some parts of the very interesting interview:

Q: Eric, you are CEO of one of the most important companies in the world... but you spend two days a week coming in and teaching a class at Stanford. Why do you do it?

Eric: ’Cause you always learn something when you’re teaching something. And you also learn when people talk. You don’t learn very much when you yourself are talking. So, this new generation of entrepeneurs that seem to go through Stanford always ask the new question that I have not heard yet... something to think about.

Q: Ray Ozzie recently made some comments about Microsoft. Their data center construction being a big competitive advantage. I wanted to see how you think that what Google is doing is different from what their competitors are doing with their data centers.

Eric: Google, by any measure, is much more capital-intensive than our competitors, and we’re much further along in the build-out of data centers. So without commenting on our competitor’s quote and positioning, let me say that in an internet market where you deliver your services by computers with spinning disks, we have a competitive advantage... because we have the cheapest and most scalable such architecture. We hope that in the course of innovation we will be able to build products which are almost impossible for our competitors to replicate, because we simply learn how to implement them at scale. The internet is a scaled business, and running large internet scale businesses is very, very difficult. All the challenges – staying up, dealing with spammers, dealing with other access problems – and we believe we do it best in the world.

Q: What are some of those big areas of capital expenditures today... kinda how do you see those going forward?

Eric: Well, virtually all the capital goes into the expenses that are associated with running data centers. And that literally are the computers, and the disks, and the appropriate networking harboring, and literally the buildings now that house them. It used to be, right after the bubble burst, that you could go and purchase these inexpensive data centers that had been written off by people who overbuilt. But those data centers are long gone, and that’s one of our primary focus.

Q: Talking before, you’ve spoken glowingly about Larry and Sergey, and also Chad and Steve from YouTube. What are the characteristics of very successful entrepreneurs?

Eric: I think the most important characteristic of an entrepeneur is that they’re going to do it whether you give them permission or not. They are motivated by something inside of them. It’s not something that can be taught... they feel it, they want it, they’re driven to it. And when you find such a person, they’re usually a pretty good person to hang out with. They’re gonna do some interesting things. In Larry and Sergey’s case, and more recently with YouTube with Steve and Chad, they were going to be successful, and you can tell when you talk to them. Everything else is a tactic compared to that passion and vision that an entrepreneur has. It’s relatively rare, and it’s important to identify and respect it. (...)

Q: Eric, you’ve been a leader in the Valley for a long time now. What strategy is different today than in the past about the areas of innovation and entrepeneurship?

Eric: Yeah, it’s funny that every generation thinks that they’ve invented cold fusion... but every previous generation did too. And one of the rules about innovation is that it’s a constant process. The innovators today are not different – they’re just innovators now, as opposed to innovators from 10 years ago, or probably 100 years ago. In watching old BBC movies about England in the late 1900s/ early 1900s, you have to imagine what it meant to be an innovator, when roads and gaslights and electricity and so forth were being invented. It’s the same person, it’s the same type, it’s the same economic sense of leverage, it’s the same passion that drives innovators. The Valley is fortunate that these cycles are almost perpetual here, and innovators are drawn to both the culture, and I think the good weather...

Eric was also asked to comment on Google’s decision to self-censor in China. Eric says:

It was a difficult decision, and one that we spent a lot of time arguing through. We’re satisfied we made the right decision. We have a strong local competitor in China; Google itself is the remaining strong US player. And it looks like we’re gaining now by virtue of the rich product and other initiatives we’re doing in China.

The decision that we made, which is a difficult sort of moral/ ethical decision, was that it was more important to engage with China, under the laws that they have in place, with the hope that China will open up, (...) which we believe it will. The alternative was to essentially reject China, not engage. And you don’t [effect] change by rejection, you affect change by engagement... engaging, and hopefully changing, by virtue of your involvement, your persuasion, and access to your information.

[Thanks Julio!]


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