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Thought for 2010: Act like Larry and Sergey

Richard L. Brandt [PersonRank 3]

Monday, January 4, 2010
10 years ago2,272 views

Greed is bad. Fear is bad. Google is good.

(Wait. Hear me out.)

   As we enter a new year and, full of hope, crawl toward a better year than the one that brought many of us to our knees, I thought it would be good to stop and think for a moment about what it means to be an entrepreneur.

   I take my example, of course, from the two most successful entrepreneurs in the world Larry Page and Sergey Brin. Despite the cynics (and I'm usually among the most cynical), and despite an arrogance born of oversized brains and an almost religious belief that they are doing the right thing, they really do their best to build an ethical business. Their model is the one that will prove to be the most successful in the coming decade. Get used to it.

   Greed is no longer good. With all due respect to Andy Grove, a man I have always and still do admire, is a life built around greed and fear really worth living? The most fascinating thing to me is the irony that, in what has become the most hyper-competitive business climate the world has ever seen, greed and fear are no longer the best motivators for success.

   Consider that when they were still at Stanford, Larry and Sergey wanted a search engine to be a non-profit. Scoff it you like (the folks at CNBC did when I mentioned this on-air) but it is absolutely true. They did go commercial, but when they did it, they did it on their own terms.

   Neither men came from families with capitalist roots. Academia, not entrepreneurship, was the families' prominent aspiration. Certainly, when Larry and Sergey went to Stanford, they had a strong entrepreneurial leaning.

   So how did two nerds with no business experience create such a successful company? Quite simple, really. They decided to ignore Wall Street.

   In today's world, almost any CEO of a public company will tell you that his or her primary constituency is the shareholder. Larry and Sergey had a radical idea: What if your company was actually dedicated to making a great product, something that makes the world a little better? And what if you considered your customer to be your boss?

   Every time they faced a business decision that would either benefit the users or increase revenues, they chose the users (and consider the fact that these were not even "customers," since Google's revenues come from advertisers, not users.) They even favored the customers over advertisers when it seemed as though the decision would reduce revenues and profits. If that makes you nervous, do not buy Google stock.

   That is what being an entrepreneur should be all about. Larry, Sergey – and Craig Newmark, for that matter – show that the right approach to business can do more than bring wealth, it can bring contentment, a sense of satisfaction, a sense of self-worth. Now compare that to greed and fear.

   That is not to say that wealth is bad. I wish I had some. But as it happens, these ideals turn out to be the surest path to success. This is the most hyper-competitive business environment the world has ever seen, thanks to the Internet. It's reducing old industries to rubble and rebuilding new versions from the wreckage – sometimes way too slowly (I know; I'm a journalist.)

   The only way to compete in that environment is to return to basics: Products built with the most intense passion, designed and sold with the highest regard for the customers, created for the sake of the product itself, not for the wealth it brings.

   The new opportunities the Internet brings make this approach essential. Why does Google get into so many new businesses – a smart phone called Nexus One (topnews.us/content/29512-googl ...), or a new tablet PC (gizmodo.com/5438716/google-and ...) with free software, for example? Because the computer industry and the wireless industry are being destroyed by their own greed! Two-year lock-ins, extra charges for text messages that cost the wireless carriers zero, software that costs hundreds of dollars; these industries are full of inefficiencies and over-pricing that the Internet renders obsolete. And that means (as it always does) new opportunities for smart, savvy entrepreneurs with a new approach.

   In a world of near-frictionless capitalism, where every company, product and service is at the tip of those fingers tapping on a keyboard, why would customers choose anything less?

John [PersonRank 0]

10 years ago #

Considering the two-year lock-in: You get a rather cheap mobile phone for it. You can also choose the non-locking option, but then you have to pay >500$ for your smartphone.

The thing with the costs is just simple business as Google does it, too: Earn money, earn money, earn money and in the following years earn more money and more money to satisfy the shareholders and even raise the wages of the employees. If *yourFavouriteProvider* would offer text messages for free and VoIP-Calls, they would loose a lot of revenue and a lot of people would loose their job. I'm also not happy with these issues but this is how the world works...

Richard L. Brandt [PersonRank 3]

10 years ago #

But I think the world could work better. When Google was started, everyone said you had to create a portal and get people to stay on the site or you would lose revenues and people would lose jobs. They said the same thing about paid inclusions into search results. And they said the same thing about restricting the number of ads and making them small and text only. Every one turned out to be wrong.

I believe it is also possible to make money with a new wireless business model. In many places in Europe the phones are not subsidized and people get by. Signing a two year contract ends up costing me $100 a month, and if I want to change providers for any reason, I can't, meaning it would have been cheaper in the long run to buy an unlocked phone.

I wanted to change from Verizon when I found it difficult to get new apps. Then I wanted to change from Verizon when the Android came out. I want to change my wife's account from Verizon because she doesn't use her phone often enough to justify the price Verizon charges, but I can't until her contract is up in another nine months. People couldn't change from their current provider to AT&T when the iPhone first came out.

As it is, there is not enough competition. If one of the major carriers starts offering free text messaging or VoIP, it only benefits the user ind increases competition if customers can switch.

Google's philosophy has always been that if there's something you can do to improve the customer's experience, even if it will reduce revenues, do it. What happens then is that people flock to the service, market share goes up, and they make more money. Google hasn't done badly by this philosophy.

I'd like to hear your opinions and get your vote on my Evil Google poll. It's at richardlbrandt.com/drupal/node ...

Do it now and I'll send you a free copy of my book, "Inside Larry & Sergey's Brain" (and it's not a crappy self-published thing, but got a "must read" review from Publishers Weekly.) If your comment is great, I'll also send you a free copy of "Googled: The End of the World As We Know It." Try it! You'll like it!

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