However, when other companies try to imitate Google they always fail because they're missing a crucial piece:
Billions of dollars in ad revenue
Google doesn't work the way it does to be successful. It works that way because it is successful.
I found this no more evident than when I worked on Google Search itself.
When you have a lot of money, a lot of things work because you have a lot of money. You often see the same thing with people trying to emulate pro-athletes training methods. A genetically gifted pro-athlete can often succeed in spite of their training, and not necessarily because of their training.
In my opinion, Valve also has the same shortcomings as google: practically zero customer support, and an un-curated app platform full of shovelware (finding gems on the Steam and the Google Play & Chrome Web Stores can be tricky).
But there is still a ton to admire in both organizations.
The floodgates need to close, now. As someone who has voted on hundreds of Greenlight titles, Greenlight is an abject failure IMO. It's flooded with garbage, the first few waves of approvals gave us some great titles that otherwise would have never seen the platform, but now it's a nightmare. There are no more approval lists. What's worse, it's the only way onto Steam. Your indie gem is just as likely to be lost in the shovelware noise as the latest idle game ported from mobile.
Anyone with $100 can post games there. Anyone with more than $100 can purchase a service which votes their pre-purchased unchanged asset pack "game" through Greenlight. It's ridiculous.
Tags and abandoned curator lists are not a solution to hundreds of shovelware titles clogging up the new releases section IMO.
Unfortunately, nothing will change until something comes along to replace the current system entirely. Valve will act when they are forced to act, not before.
Why? The internet itself is an open, uncurated platform.
The basic ability to publish things and finding good content are two separate problems. Don't try to solve one by restricting the other.
my point is that you should maintain openness while making it easier to discover good content.
Well, figure that one out and I'm sure you'll make a lot of money. Until that happens though, I'll take a semi-closed Steam ecosystem instead of the alternative.
Don't restrict other people for your own benefit. Instead a solution that lets them do their thing while you get the content you want is much more equitable.
I have paid for, and not returned, numerous bizarre or niche indie games that are slayed in their reviews; whereas I've returned more than a few Overwhelmingly Positives heaping shovelfulls of mainstream schlock.
It's part of growing your userbase; you lose its initial narrow focus of taste.
Steam is also constantly promoting new games to you and making suggestions based on what you currently play. There is also the social aspect in that you can see who is playing what, leading to new discoveries.
I will admit that at least having the verifiable length of time a reviewer played a game helps, but I don't find the reviews themselves to be all that worthwhile for most games.
If it was worth 1500 hours of the reviewer's time then it's probably worth 10-50 of a potential buyer's.
Inversely, I don't need to play a bad game for 1500 hours to decide that it's bad. I played 60 minutes of No Man's Sky and you'd have to pay me to play a single one more. Does that mean I should be discredited from voicing my opinion?
The return system and the achievement system should probably be integrated. Likely there should be some sort of achievement related to 'escaping the tutorial'. They might even call it "Almost bought the farm" or something.
Playing to that point should give a player a good idea what kind of game it is, and what sort of plot (if any) is happening in the game.
From /that/ point they should have maybe 30-60 min of 'game runtime' to return the game or not.
Functionally this would be an in-product demo.
Steam could easily implement this, letting you try purchased games for up to two hours.
It's be trivial for them to implement some anti-abuse system (like "must have purchased N games before using demos, etc).
The exception would be with highly competitive multiplayer games, and even then you can quickly get a very good idea.
Steam isn't bad at discovery, but because they're not creating much original content and their UI is janky, they're also not that good at it.
Source: created comprehensive database of education technology products , and while we made best attempt at discovery, we learned pretty quickly it was secondary in importance to having comprehensive info.
As someone who pays for AdWords, I have no problem getting someone on the phone to help when I need it.
If you've paid Google enough money. I have to keep paying $6AUD/month unless I want to lose $300+ of Android apps forever (Google Apps for Work). No chance of transferring them to another account (I'd pay $100+ for this)
6 years * 12 months/year * $3/month = 216 USD = 289 AUD.
They have a gem game called Counterstrike Global Offensive which is their 2nd biggest game after dota2(which is free), and up to a half a year ago that I was playing, we all thought (me and reddit) that they had 0 devs working on it.
Bugs were all over the place, noone was taking action into fixing them, releases were every once in a blue moon including just new skins that were content created by players etc.
Now of course the game has evolved and there are some new developers trying to do something with it but its funny to think that a game of that calibre that returns prolly billions in revenue has pathetic support.
The only gaming company I've seen keeping up with what they make is Blizzard.
This makes me think that it's rather particular to the product. YouTube was acquired and now has a significant focus towards consumer sales via movies and Red, perhaps these two factors have lead to a significantly different culture surrounding support?
This strikes me as something you can afford because you are in a factual monopoly ("You are not OK with our service ? Find an alternative... whooops :)"), rather than just having a lot of money.
Steam benefits from the fact that even people not completely happy with it (personally I have no complaints, but I use it exclusively as a store/launcher) are already invested in the platform, and do not want the hassle of dealing with two or more similar services, so they are wary of any alternative that might surface (see Windows store or proprietary stores like Origin).
If you have first-pick of incoming talent, it makes sense that you can get away with giving those employees an extremely high degree of autonomy.
These companies were successful because of what they were, and they continue to be successful because of what they are.
It is a virtuous circle living on money, people, management and many more characteristics that go together.
Google didn't suddenly transformed to being Google overnight the day they reached the first $1B.
Trying to imitate success seems to turn into a cargo cult. For whatever reason people seem to shutoff their brains when talking about this.
It's similar to questions of programming language, infrastructure options, etc. They are important supportive aspects to the core business but mostly the core of the business could still operate even if those supportive aspect were mediocre/non-optimal - just not as effectively. On a longer time scale that stuff starts to matter in a highly-competitive market.
Most startups and small businesses don't really have those issues, or at least they aren't critical at that stage of the company when the core business hasn't been figured out. So emulating them at a high cost is a bad idea.
The context of everything is important. Sadly most advice dolled out in business books is extracted and formalized without considering the context of where it worked and why.
Do you know of any examples offhand? Definitely agree that it's a virtuous cycle of talent -> revenue - > perks -> talent
>Trying to imitate success seems to turn into a cargo cult.
Love the apt description of this.
Offhand examples are the list of failed companies on that page.
It's not the genetics that matter, it's the years of training leading up to the current workout routine, not to mention the pro athlete's knowledge and understanding of his/her own body, as well as the dedicated free time to put into a workout that needs that kind of attention in order to succeed.
When you have all day, and you like working out, you can do things that don't normally make sense and still see results.
That said, the margins on the search advertising business are shrinking, and have been for years now. You can cover for that by eliminating profligate spending and then eventually you can't. I think Ruth is the right person to handle that transition but its going to hurt in terms of people feeling that "the magic is gone."
When that happens, Google is going to have to start rewarding operational efficiency gains at least as strongly as they currently reward popular science project type gains. And then it will be very interesting to see how they change and if the era of "but Google offers its employees ..." will be over.
I hope the free sodas stay though.
Not only is the magic gone, but the boring, day to day fabric of functionality is gone.
Have you tried to really search for anything with google in the past five years ?
I don't mean meandering, aimless, consumer-centric searches like "new fitness watch" where any result tangentally related is useful ... I mean a specific, meaningful, concise search with multiple keywords, all of which are key words ... and the resulting pages do not contain one or more of those words.
I know all about allinsite: and quotation marks and so on ... those are, as far as I can tell, randomly interpreted by google. Who knows if they even work, ever.
A front page item on HN a few days ago asked what people would pay $1000 per month for ... I would pay that to have search with full control over search results with logical operators that actually worked.
I would wager that this describes a shockingly high percentage of the average person's searches. I know it's true for me.
Somewhat meta, but I cannot find this item on https://hn.algolia.com or using a Google search ("site: news.ycombinator.com $1000 for") can you post a link if you have it?
What I do now is to create a Google Custom Search Engine with all my RSS feed subscriptions; it resembles this earlier feature as I feed it lots of personal blogs that I read, but it is not even close to the earlier blogsearch.
Similarly there was a discussion/forum search which was also useful; that too was removed.
For those that are not aware of the reference here, you will enjoy reading Steve Blank's post entitled "The Elves Leave Middle Earth - Sodas Are No Longer Free."
This happened at the Bike Cooperative I used to work at; everything was informal, but we were able to focus on weird types of bikes and recycling projects that were interesting to us and subsequently we'd dedicate hours to do them. Unsurprisingly, the management came in, and we were wrench monkeys like everybody else; not so say that we were whiny because we didn't feel like "special snowflakes. We lost freedom to focus on our strengths in the cooperative.
One has only to look at Microsoft to see an example of what might happen. Things were very carefree there as well back in the '90s during their heyday when growth seemed limitless.
It's also interesting to contrast Google / MS with Amazon, where Bezos has kept a tight rein on operational efficiency all along. They probably won't suffer as much when they reach their growth ceiling.
One guy says how he works 30 hours in a busy week and uses his 20% time to hit the gym.
But in another's words: "how can I leave when they pay me so much?"
For my "official" 80% project, in order to get approval to go into the planning phase for a complex, multi-year project, we had to demonstrate how it would save hundreds of millions of dollars on an ongoing basis, and show how the TCO savings would be many multiples over the software engineering costs to implement said project. So in Technical Infrastructure, we do very much care about operational efficiencies --- that's how Google Compute Engine (which is driven by TI) has been able to cut its prices and inspire the market to follow suit.
And this is not new, by the way --- the whole time (coming up on 7 years) that I've been at Google, we've always been very interested in bringing costs down, and the team was amply rewarded when we rolled out ext4 across the production fleet, because we could accurately quantify the performance benefits, and how that translated to dollars saved to the company.
And so no, I'm not bored. In fact, one of the great things about Google is that I have flexibility to do things that help move the industry, both in Google products and in the Open Source world. This includes serving on program committees, working with a graduate student on a paper which we've submitted to the Usenix FAST conference (fingers crossed, we'll hear soon if it's been accepted), do presentations of my work at LinuxCon, etc. etc. Of course, I probably should be carving out some time to hit the gym, just for personal health reasons....
When you say it "You'll be working 40 hrs a week and to be successful you'll need to spend an additional 25% of your time coming up with other stuff that helps us." it doesn't sound quite so magical :-)
That said, when I worked there I quickly realized that with no trouble at all I could spend all my waking hours in the office playing with the neat things that are made available to employees. It doesn't feel like overtime when its something you would do in your free time anyway.
The sticky bit is that you don't get profit participation in the financial upside of those extra projects.
So it's not a matter of doing things because it's needed to be successful (although they won't hurt when I'm next up for Promo, I'm sure), it's the fact that I get to help influence the industry. As far as profit participation is concerned, I'm paid plenty enough to be comfortable, and I'm used to the concept of the financial upside coming indirectly from what my open source activities (e.g., ext4 maintainer, being on the program committee of ATC and FAST conferences, etc.) do for my personal brand. Yes, I'm not going to have the money of say, a Peter Thiel or a Larry Ellison. I also don't have to worry about having all of that money turning me into an *sshole, either. :-)
Am I aware that I'm trading off potentially being able to earn even more income in exchange for more security and the freedom to choose what I do (and the fact that I can find choices that help out the open source projects that I care about _and_ which result in benefits to my company is something I consider a feature, and part of the value I can bring to my employer)? Of course. Sure, I could probably earn more by working for a high frequency trading firm. But I'd lose a lot of freedom. More importantly, what working on moving the poles of the US financial system to the right-half plane would do to my soul isn't worth the extra money it might bring in.
In other words, very much an outlier, even at Google! :)
I first went to work at Apple in January of 1988, at the end of the era that Woz described as making whatever they felt like and throwing it over the fence to ravening crowds who were throwing bales of money over the other direction.
Some time in the first few weeks I was there, my department head convened a staff meeting to explain that they were going to try a new concept that Apple had never tried before. "It's called a 'budget'," she said. "We try to guess ahead of time what our plans are going to actually cost."
At some point someone asked if that meant that regular meetings would no longer be catered. The answer was, "of course not. We have to have some way to get people to show up."
The other factor is that Google search has been slowly losing its quality edge on its competitors and so services like Microsoft's Bing start developing more significant inroads, the combination of more market share and higher CPCs on Microsoft's service lead it to be profitable last year. And the reason is in part because Microsoft can preferentially send search traffic to their properties, but it is also tied to the fact that consumers don't then switch their search provider later.
To counter-act that Google has been paying more and more money to third parties to send search traffic their way (this expense is called 'traffic acquisition costs') and Google was horrified when Oracle's lawyer disclosed that they were paying Apple a billion dollars a year for their search traffic. They paid millions to Mozilla to send their search traffic to Google  and had a material dip in traffic revenue when Mozilla cancelled that deal. What the author of the article in  did not realize is that all of Yahoo!'s search traffic is in fact served by the Bing index and servers. Yahoo! hasn't had a native search service since they agreed to send it all to Microsoft. So Bing+Yahoo! market share is really just Bing market share. That money paid, their TAC, comes right out of the profit margin for their ads
At the end of the day this is neither good nor bad, search is being commoditized. And as it commoditizes that puts pressure on margins since discrimination based on cost always puts pressure on margins. Eventually Bing and Google will be equally expensive from an advertiser point of view and the one with the best operational efficiency will make the most profit. Neither of them will be able to use "excess profits" to fund moonshots.
That is why it is so critically important for Google to find additional viable businesses to augment its search advertising revenue.
The current road leads to a very un-fun place to work, long hours (maximize work done for salary paid), few benefits (reducing costs), and little room for new development. They won't end there, it's like saying if you drive west in the US and never turn eventually you'll drown in the Pacific ocean, it's true but there is always a turn before that point. But if Google of 2003 was one end of the spectrum, Google is inexorably moving toward the other end. Ruth is there to make sure what's left is still a viable business that deserves a high stock price.
2016 (9 months): 22.0%
It doesn't look like profit margins are under strong downward pressure. But a better metric would probably be 'revenue per search query' - I don't have any recent statistics, but if Bing can close that gap it will reduce Google's margins when bidding for search traffic from Apple and Firefox (and maybe force Google to increase the percentage of AdSense revenue they give to website publishers). But even then, Google will still have three significant advantages to avoid the complete erosion of their margins: (1) Android; (2) Chrome; (3) The Google brand (I'm sure that more people try to change the default search engine on their new Windows computer than try to change the default search engine on their new Android phone).
Also, Bing would probably not be profitable if it was a separate company and had to pay Microsoft for the privilege of being the default search engine on Windows. Bing+Yahoo seems to be growing market share, but I wouldn't expect them to completely close the gap with Google in the next 20 years because Google's ownership of assets like YouTube, AdSense, Google Maps, Android and Chrome.
Google has all my search history, a list of all the AdSense websites I visit, my YouTube history, my location history, ten years of my email history and my Play Store purchase history. And for any given search query I perform, Google can access a larger pool of similar search click history from other users. How will Bing ever overcome all these disadvantages?
 Derived from https://www.google.com/finance?q=NASDAQ%3AGOOGL&fstype=ii&ei...
Early in Google's life there was an article which asked the question "Is Google's gross margin 100%?" It went on to observe that Google had overhead, staff, facilities, and monthly recurring costs like electricity and phone bills, but every advertisement they 'served' cost them essentially no delta in their overhead, so their "cost of goods" when looking at the business through the lens of the goods economy was zero. And any revenue they generated by selling a "click" (their stand in for a widget) was 100% gross profit. As a result, using old school goods economy accounting rules, profit is entirely a function of how many clicks they "ship" and there are many knobs to adjust which boost how many clicks they ship. They include, but are not limited to, putting more ads on their own pages and buying traffic to point at their pages with ads on them.
But when you evaluate their business using the principles of information economics you see that they do have costs and their core product's value is eroding.
To understand that statement, you have to ask "what does Google actually sell to advertisers?" An 'ad unit' or an 'ad word' is the name but what is it really? My claim is that what they really sell is a piece of very valuable information that is hard to get. They sell "this person has just looked for this good or service, now who wants to respond?" They create that information by providing a portal that people can write in a question.
This "solves" for advertisers their biggest ask, that a consumer looks at their advertisement exactly when they need the good or service that advertisement is promoting. You can put an ad for a sports car in a magazine about cars, you can put an ad for a sports car on a television show about cars, but that pales in comparison to the idea of putting your ad for a sports car in front of someone who has just asked "What's the best sports car?".
I think that it is pretty easy to see the value there to advertisers, they would rather spend money advertising to people looking for their products then advertising to everyone and hoping that some of them want their products. What is more is that it works well and that is why it has become a major force in advertising. It is also an interesting measure of the value too advertisers.
Advertisers will constantly evaluate what it costs to advertise against product sales or market penetration or market visibility. They have a limited budget to spend and they want to make it count. That sets up the traditional economic forces which demands they allocate their ad spend capital wisely to get the most impact. Google, unlike a television network or magazine, brought into wide use the notion of an auction that happens at the decision point, between potential advertisers on what they would pay to have their ad shown, and where it would be shown, in the search results for a given query. In an information economic sense this gives us the fundamental value of the information that Google sells.
The key being that all of the knobs that Google has at its disposal will eventually be turned to their maximum point, and if CPC keeps falling their profit margin will too. Because Microsoft's CPC number is going up their margins will continue to increase. At Google's current rates they will eventually be buying so much traffic and putting so many ad slots on their own sites that non-"free" services will appeal to more and more people which reduces the number of eye-balls on a Google ad which reduces its value to advertisers still further. If Google reaches the point where they are no longer able to adjust their traffic mix to achieve their numbers, they will be in a very tight spot.
 The "goods economy" is the system of directing capital into the production of goods. The "information economy" is the system of directing capital toward the disclosure of information.
Consider 3 scenarios:
1. Person A just searched for "What's the best sports car?".
2. Person B just searched for "What's the best sports car?". He's a 45-year old man who works for an insurance company in New York. He has a wife and three kids, but he recently started seeing a 28-year-old psychology grad student in Chicago twice a month. Two years ago he bought a $6,000 watch for his wife's birthday.
3. Person C just searched for "What's the best sports car?". He's a 23-year old man who lives with his parents and does not have a wife or girlfriend. He works for Walmart and has just been promoted to manager. Nine months ago his friend bought a Subaru WRX.
Now consider what types of advertisers will bid for each search. And perhaps more importantly, what types of ads and landing pages will be offered for each search. Clearly, having detailed personal information is a significant advantage when deciding which ads to show to a user. Google has that advantage and doesn't look like giving it up any time soon.
However, I can think of two pieces of evidence against this argument: (1) Bing was able to outbid Google to be the default search engine on Firefox; (2) Outbrain and Taboola regularly outbid Google AdSense to advertise on Time, Forbes, Bloomberg, etc. In both of these cases I would have expected Google to prevail, so perhaps Google's personal-information advantage is not as strong as I think. Or perhaps Google isn't taking full advantage it.
My point is that in my opinion you are over valuing Google's user information advantage. Most purchasing and buying habit information is collected using web page based analytics to an advertiser rather than coming from Google directly.
When Blekko was operating at a consumer search engine we got a great inside look at what tools advertisers have at their disposal to "qualify" their ad bids. If you send the query's source IP to the ad network when you request an ad they match that up with all sorts of cookies and beacons that have fired off that IP address. None of that comes from Google, it comes from all the trackers that are running all over the Internet.
I wonder if there is some concrete way to measure that value. For example, imagine if we could find the "revenue per US user per month" for Bing and Google Search (ie. the search engine part of Google). Would that say anything about the value of personal data?
I wonder what this would exactly look like. As a side note, I wonder what would happen if for example an economic collapse happened and Google's ad revenue was significantly reduced.
I would expect that once a quarter there is a meeting which goes like this, "Ok folks our profit margin is going to be 22% and our revenue is $xxx. That leave $yy in expense we have to get rid off or revenue we have to develop. Who wants to go first?" We've seen both efforts on the outside, more adds on search pages, pay to be in the 'Google Shopping' bar, Etc. for revenue enhancement, and cancelling things like Reader, Wallet, Glass, and other projects or ideas that haven't added to the bottom line. You can see the moves in Youtube (the latest being you can't keep a video running in the background tab unless you have "Youtube Red" as an example) to either get profitable or die.
As for cash flow? I can tell you that I was there when the Mortgage Crisis hit and it scared the crap out of them. That crisis killed TechStops and that did way more damage than the financial crisis did.
 Techstops were Google's tech help on demand group that, when they were employees, was a really awesome service. When it got switched to a vendor it really lost its utility.
But what is not known is the cost of a _similar_ click. Since the number of clicks increases dramatically quarter over quarter, it could be that it's the new clicks that are bringing the cost down.
I do have to disagree though: MSFT has office and windows as major cash cows, maybe azure will also start turning some big profit in 2017 as well (tbd). So they can afford those r&d style projects without nearly as much risk as "Alphabet". I do agree with your assessment of goog though: the heat is turning up and I don't doubt belt tightening is their future.
Who am I kidding; that will never happen
In fact, I think your comment "Google doesn't do what it does to be successful, it does it because it is successful" is completely ignoring how Google came to be successful in the first place, which was doing what you're saying it does because it's successful. Reading something like "How Google Works" goes over this exact thing in detail.
For example, even within the profitable Google portion of the business, they often have many competing projects. There will be competing search features, competing chat applications, competing cloud services. Google will make big speculative bets or internally competitive bets because it can afford to just let people build things and see what happens. Google, as a company, doesn't really seem to have any idea of what most individual engineers are doing week to week.
Many companies can't do that. If you are a medium-sized company you probably don't have the market position or revenue to afford to be unfocused.
Correct... but also correct if you replace Google by any company.
I've worked from zero management company (ala. Valve) to large fixed hierarchical structure (government).
The company never knows what people are actually doing. If it tries to find it, people will either game the system or waste time to justify they're doing instead of doing it.
This sounds exactly like how Microsoft works. They (famously) even had 2 versions of Windows 95.
Tech is, to an extent, a winner-takes-all market. If you build out two competing products internally, in the long run, it will cost you less then building one product, and having an outside competitor fight you for market share, by building that second product.
Case in point: I'm sure that Facebook would have loved it if one of their teams built Whatsapp. For 20 billion dollars, they could have funded a hundred competing internal products.
Whatsapp is a great example - Facebook already had Facebook Messenger, and Facebook Chat, internally. Google had GChat and Hangouts and whatever else they're working on these days. It didn't prevent the outside company with half a dozen employees from eating their lunch.
The parent's point is that because of their core markets in search & social networking, Google and Facebook have the luxury of no major competitors, and so they can afford the internal competition to advance the state of these markets. The market structure came first, not the corporate structure. And if you try that in a market with few barriers to entry (like mobile chat, before everyone had built their network effects), it's just as likely that a competitor outside the company will eat the market, not one inside the company. Probably more likely, since internal projects are hamstrung by things like executive approvals, PR worries, and potential legal issues while startups can just take their product to market and see where the market takes it.
For example, Google Voice was put in maintenance mode and Hangouts took off. Then Allo, then ... ?
They very rarely actively push two products with the same purpose.
But you can get some of the benefits of a free market by having teams work on multiple solutions to one problem. You can also squander them by making the wrong high-level decisions.
This may be part of the strategy, those that somehow turn into 'profit' are the ones that actually have full-time engineering assigned to them, and get improved? I couldn't say.
For example that I ran into recently, Google Custom Search/Site Search theoretically _has_ an API for creating/modifying custom searches... but it's completely inaccessible, because the only auth method it supports is one that no longer exists. I suspect it is still running on a server somewhere with zero traffic though. If you Google around, you can see for at least a year, _some_ people (prob those with the paying 'Site Search', not the free 'Custom Search') have managed to get answers from this from google support -- the answer is "There is an internal feature request ticket to add OAuth 2 support to this API, but I can't give you an ETA".
This isn't true. Even I, as a software engineer, can look up with ease what the majority of other people work on.
You can see their disorganization in their software and products - letting ideas like Google Voice that were ahead of their time languish until iMessage comes and takes over, lots of failed software launches etc.
Isn't that basically the job of the manager?
The structures, the roles, the processes.
Autonomy is a value, but values only influence design.
So I pointed out that many companies are able to get these things right (/imitate Google), without billions of dollars in ad revenue. It's not the ad revenue. That's my contention.
There are multiple structures that allow for "perks", or are designed for autonomy. And, as you said, others have produced structures with similar results or based in similar values.
But, he's talking about the specific structures at Google.
You're right but I understood what Periodic intended to explain. Unfortunately, he phrased it as "billions in ad revenue" instead of a less common metric of "profit-per-employee".
If the company generates enough profit-per-employee, it can afford to pay for lavish perks.
Consider 2 different companies' revenue,income,#employees:
Walmart: $482b, $24b, #2300000 -- ~$10k per employee
Google: $74b, $19b, # 69952 -- ~$276k per employee
Take one example of a perk such as free catered food which is estimated to cost $20-per-employee-per-day. For Walmart to offer this perk multiplied by 2.3 million employees, it would cost ~$11 billion which is almost half the $24b profit. Google's calculation for 69k employees is ~$349 million which is less than 2% of the profit. And the free food is just one perk... there are also massages, haircuts, laundry, daycare, etc.
Yes you don't have to have a billion in revenue to offer perks like that. SAS Institute of North Carolina in the 1990s didn't yet reach $1 billion in revenue but they offered lavish Silicon Valley style perks. They could afford it because they sold statistics software with high margins (profits). Although they are a private company, we can safely assume they are generating much more profit per employee than Walmart.
So, if we have a hypothetical medium-sized company that has a revenue of $400 million with income of $100m ... to afford lavish perks, we need to generate that $100m with ~360 employees or fewer (Google benchmark). If it requires hiring 9500 employees to generate $100m (Walmart benchmark), it means we will have to pinch pennies and charge the employees for each pen taken from the supply room.
Direction of cause-effect: create a great high-margin business so you pay for free gourmet food.
Attempting the reverse of subsidizing $20 for each employee doesn't mean you'll end up with a high-margin business.
We can generalize the free food case study to other "Google perks/methodologies/culture" to see if we really have the direction of cause & effect correct.
 60 Minutes story (2002): https://www.youtube.com/watch?v=lvsIcwHavOs
Likewise, Walmart can offer those types of perks. Just not to people working on the floor or in distribution centers.
Thanks for your original reply :)
Many of these smaller companies are VC-funded startups that have zero revenue and are burning VC money to provide these perks.
You're probably also looking at startups, which don't yet have material revenue but plan to reach margins closer to Google's than Walmart's.
Another common example, "Companies with happier employees are more successful." But perhaps causality is the other way, "Employees become happy when their companies succeed."
It must be hard to think straight in a domain where one of the most visible success metrics can be so misleading.
Those things aren't mutually exclusive and almost certainly are both true
But without search, without Gmail, without Chrome, without Android, without the moonshots and all the "hobbies" Google's brand would wither, and its access to data at massive scale would be crippled, and its access to eyeballs would be curtailed, and the talent would walk. Others have built advertising businesses, but Google's dominance in advertising couldn't occur without the product mix.
For instance both Chrome and Android have been created with the purpose of controlling the underlying platform that people use, in order for them to not be at the mercy of the other platform owners, like Apple or Microsoft. And it worked.
This is very obvious to anybody with an interest in how microeconomics works. For example this is why open source can exist in a world where people need to struggle to put food on the table. It's basic knowledge: complementary goods and services are meant to increase demand for your cash cows.
But alas good journalism is dead.
I disagree. Chrome was created to be a standards based browser, Android to unify the different phone operating systems circa 2004. I picked Google products because they allowed me to get out if I needed to. Gmail provides IMAP, POP. Docs and Music let you take out your data as needed. Google intentionally creates a way to get your data out. All of these things require foresight and work to pull off.
Does the lock-in exist because no one else is offering the same service? Potentially. But the intention of the company when they created these services was to create the best service, not a lock-in service.
Ever tried to install an adblocker on Android? There isn't anything you can do without rooting your phone. Seriously, it should be called Addroid.
Ever tried to install adblock/ublock on Chrome? only to find out that it doesn't exist in the chrome store or was removed again.
What you're complaining about is Chrome for Android, but then again Android is also the only mobile platform supported by a real Firefox implementation that has plugins, including ad-blockers.
You're talking about rooting the phone, I guess you want /etc/hosts or something, but you know, even on the desktop that kind of solution requires sudo rights. This one is entirely about security and really, Android is not that hard to root.
And even though I'm a Firefox user on the desktop, I've also used Chrome with AdBlock Plus and then uBlock Origin and never had any problems.
You don't have to root your phone. You can install an Open Source VPS app which filters ads, no root required (and data stays on your phone).
For example, AdBlock Plus added mobile support in version 1.1.2, supporting Fennec 1.0 Beta 6, released 2009/12/12.
Yes. Works across browsers and against in-app ads, too. https://block-this.com
> Ever tried to install adblock/ublock on Chrome?
> only to find out that it doesn't exist in the chrome store or was removed again.
Under no circumstances. AdBlock Plus has never, as far as I know, been removed, nor has uBlock Origin.
Next we'll see how it goes when you'll try to explain to your sister and your mother how to use that android VPN to block ads.
My mother doesn't have a smartphone. If she did, I would install it for her and be done with it.
Then why not give money to firefox? Why not start contributing more?
instead they built their own, integrated it with google stuff, and pushed it heavily for years and years.
Competition is good. You can make a standards based browser and then add additional features that others can't or won't provide. Building it in house gives them more control. Do you think Mozilla would have developed V8 if google just threw money at them?
> Sun is the loose cannon of the computer industry. Unable to see past their raging fear and loathing of Microsoft, they adopt strategies based on anger rather than self-interest. Sun’s two strategies are (a) make software a commodity by promoting and developing free software (Star Office, Linux, Apache, Gnome, etc), and (b) make hardware a commodity by promoting Java, with its bytecode architecture and WORA. OK, Sun, pop quiz: when the music stops, where are you going to sit down? Without proprietary advantages in hardware or software, you’re going to have to take the commodity price, which barely covers the cost of cheap factories in Guadalajara, not your cushy offices in Silicon Valley.
Indeed Sun got eaten alive by commodity hardware while not having any viable strategy to make money on software.
Many of these posts seem timeless and often very prescient.
In fact, at the bottom of this one, he points out the strategic dead-end Sun was heading down with commoditizing software while also making/promoting Java that commoditized their hardware...
How have there been no anti-trust related issues here?!
This is absolutely accurate.
Google is what it is because google.com is the best search engine in the world and because GMail is the best web-based mail client -- free or otherwise.
Correct, which is why many people have gmail for personal use and google apps gmail for professional.
I can't use Outlook or Yahoo Mail; that's not due to a lack of trying.
I'd argue it's less about branding, and more about creating an ecosystem.
But surely the cultures these companies create are very different. Or is Google secretly a lot like Microsoft in the '90s?
I love this line.
The reason humans are superstitious is that we don't seek answers, we seek narratives. We seek to explain without disrupting what we already believe. We might see the real cause and effect and rewrite what we see to fit what we want.
Correct, and commonly the case. There is a corollary as well - often the company (not commenting on G specifically) does not know precisely why they are/were a success, i.e. what very specific details were important vs other specific details that look important, but aren't.
This lack of insight happens all the time and company culture can become fixed on things that they did as they became successful but were red herrings. A kind of cargo cult effect. One example I would give from Google is the early focus on "top school, top grades" "A" players as hiring filters - turns out that was useless, or worse. Kudos for figuring that out - but there are probaby at least a dozen other strong beliefs cooked in to the culture that are simply coincidental to success, not essential.
- "Why can't everyone stop being poor and get a job; it's not that hard!"
Most tech companies by far succeeded because they were in the right place at the right time - But post-rationalization can make anyone look like a genius; and the illusion can last forever.
Revenue solves everything
I think the key problem is that the research team starts optimizing for periodic demo days with the boss. That's a sheltered environment in which clever (and easy to demonstrate) technical features are rewarded, and real-world annoyances involving customers, social norms, regulators, pricing, etc. are put off for "later." Not only are ecosystem problems not addressed, they aren't even vigorously considered.
The technology behind Google Glass was quite clever and some variant of that idea may eventually work. But what arrived on the market was LINS to an extreme. You can find similar failures in Detroit's concept cars, Paul Allen's first go at Vulcan, Xerox Parc's grossly overpriced STAR, etc.
I'm not sure how to fix this. Within the big-company budgeting system, it takes a daring CEO to allow super-innovative projects to break the usual rules about desired five-year ROIs. Once such a CEO takes a stand, it's really hard for him/her to get out of the way.
Suppose these CEOs do miraculously set up a system that approximates the scrappy, minimum-viable experiments of a true startup, with the marketplace being the true boss. That still is problematic. When a big company is pushing MVPs into the marketplace, the public scrutiny and scorn makes it really hard to recover from an awkward start -- and keep iterating in peace.
I'd say it's an unsolvable problem, and that's good!
What breakthrough projects are good at is pushing the envelope and inventing whole new technologies. These technologies are then experimented with by smaller firms a few years later, and the winners of this scramble bring the technology to market.
This is a spaghetti against the wall kind of market research; I think it's impossible to solve the problem of how to identify a new market and win it over. You can definitely have an informed approach that reduces risk, but it's not a technical problem that can be systematically solved.
There will always be risk where there is reward. If it was possible to systematically identify new business opportunities, there would be many more players in the entrepreneurship business, and commensurately lower profits. In fact, an "informed approach" can sometimes lead you to discount real opportunities as too pie-in-the-sky.
We need different risk propositions to make an economy with more niches for different kinds of people. I don't think the difficulty of identifying new breakthrough businesses (presumably with breakthrough profits) is a problem at all.
A key thing about startups is that they don't have much riding on them. If they fail, you can just dissolve the company, and the worst thing that happens is that people lose money and people lose jobs.
If a big corporation tries to do the same thing, there are a lot more encumbrances that elevate the risk levels quite a bit. There's a mothership that wants to protect its reputation, there are internal social pressures to start throwing money at problems, there is risk of tort situations that originated in the "startup" having wide-ranging repercussions throughout the company. No sane company is going to look at that minefield and conclude that it really is safe to sit back and let people do the "move fast and break things" thing without having to worry about meddling suits. The risk/reward for shareholders just isn't there.
I do wonder how much coverage glass would have gotten had it not had the Google halo around it.
Personally, I think Google should just funnel all the profits into GV.
You're right that it's not working well enough. That's why I think they'd be better off simply making GV the largest private equity/venture capital firm in the world.
Allow something like ten people years and a reasonable amount of hardware, and when you run out of that, come back for more budget or make revenue.
I haven't worked at google, but from experience at large companies, having the basics set for huge scale helps a lot (and avoids choice paralysis) so you can concentrate on doing the thing you wanted to do.
Developing great systems or internals, then trying to find a use for them is one thing. Google Glass was a crap product without a purpose (from the beginning).
That aside, Google doesn't know what to do with clever, ingenious, or well-Engineered systems/tools/libraries/components/etc. They'll wrap them in sh-t, then use them to try to promote it.
Even the way they try to promote their products is laughable. It sounds like poorly done attempts to spin absolute crap to make it seem as though it's something else. Why don't you just have what you're pushing not be absolute crap? Can't do that? Don't know how?
I fail to see what was innovative or groundbreaking about Google Glass and the other crap they pitch as being such. Driverless cars? Is the driving of a car the real problem, or even a problem?
Driverless cars sound cool in a way (would grab my attention), but the technology has long been created. What's on display now is a lack of ability to think about or come up with ways to take such technology and put it to use.
What they're also making clear is that they're investing not because they see the many potential future applications, but because they don't know and are just picking something to try to say "me too," or to have its failure clearly demonstrate the pointlessness of trying to innovate, or because this or that name is associated with it, etc.
They have no real idea what they are doing. They just do stuff.
Also, the moonshots are strange, because while they like making themselves seem progressive or innovative, they don't do anything without a "business reason."
Really?! You don't see the advantages of a self-driving car? What about taking a nap, reading, or watching a movie while you drive to work? What about having a couple of drinks and getting home safely? What about being dropped off in the middle of the city right at the front door, and your car looks for a parking spot, maybe 10 blocks away? What about the potential for vastly reduced risk of accidents? What about cars that communicate with each other to improve merging, thereby avoiding congestion? You really don't see the value in this?
A self-driving car that handles traffic situations at least as well as a human is the holy grail of personal transport. You couldn't have picked a worse example.
> Driverless cars [...] the technology has long been created.
No, that is completely wrong. If it weren't, driverless cars would already fill the streets.
I see advantages. My point is that they aren't enough to make the technology groundbreaking. The only thing left is the cool factor.
It would be cool to not have to worry about driving as much (it can be an annoyance), but only those who have to deal with major amounts of traffic or long commutes would really notice (and what they really want is something to shorten the commute, not make it more bearable). Even a long bus/train ride, though you're not driving, is still annoying, as it's potentially cutting hours out of the day.
> A self-driving car that handles traffic situations at least as well as a human is the holy grail of personal transport. You couldn't have picked a worse example.
No need for cars is the holy grail of personal transport. If you want to do something major in this regard, then invent teleportation or something. But wait-- that idea is too far out, eh, not practical enough?
> No, that is completely wrong. If it weren't, driverless cars would already fill the streets.
The technology has been in existence for at least 5-10 years. Many fine details (recognizing addresses, versus driving to a set location) maybe haven't been worked out, but the core of it has long been done.
Google allowed folks to book their own flight and accommodation, and had an algorithm which determined rewards for folks travelling with financial efficiency.
The measure of 'financial efficiency' was an invisible coefficient tied to average hotel and flight prices in an area. So if the average cost of a trip from Mountain View to Boston for three days was $1,500, and you managed to do it for less, then you got back a cut of the difference either as a cash bonus or in points to spend on upgrades for hotels and flights.
After a while someone realised that a group of engineers were consistently booking shitty travel around the same time, and then travelling first class the rest of the year.
They had worked out what the algorithm was doing, and started scraping hotel prices themselves. They booked (spurious) cheap earlybird flights and hotels during conference season in various cities, sometimes years in advance, and took huge numbers of internal points from doing so.
The person describing the situation to me said there was a lot of discussion as to whether they should be fired or rewarded.
> After a while someone realised that a group of engineers
were consistently booking shitty travel around the same time,
and then travelling first class the rest of the year.
I think you did a good job telling the story, but maybe I'm missing how gaming travel expenses is unique to Google.
But if you get a credit based on the difference, then you'll have a shared incentive with the budget-maker to spend much less than X.
However, then you have the problem that if X is per trip, then there's a perverse incentive to maximize the number of trips (even if they're each well under budget) because you pocket the cumulative credit. Then you can go way over X on the trips you actually care about.
Here's the problem: It sounds like Google didn't implement financial controls. The employees committed fraudulent transactions by booking travel from outlying years and get credits for use in the current year. That shouldn't have been allowed.
This was unclear in the original post and the commenter graciously clarified.
Firing someone cost money, affect teammates' motivation, and make people unhappy.
"Hi Mr X, I saw you managed to extract a significant benefit from the travel allowance policy. Congratulations! Please don't do that again, or you'll have to go through Mr Y for validation next time. Have a good day!". Here you go.
- Company sets up a rewards program to incentive financial discipline.
- Employee notices something that could allow them to, as you put it, "extract a significant benefit"
- Employee chooses not to bring this to someone's attention
- Employee proceeds to willfully navigate the benefit system in an unintended manner which causes the company to expend quite a bit more X than expected (where X can be money, or processing time, or paperwork, or benefit credits, or whatever).
Spurious is the key word here in the original post. Reservations they wouldn't have otherwise booked in order to maximize there own personal financial gain. If 0 is intended activity and 10 is outright fraud, that isn't a 10 but it's a hell of lot bigger than 0.
When Google started working on self-driving cars, they went about it academically. They did not plan a sequence of stepping stones that they could sell. They meant to have a product in an indeterminate future which should be immediately perfect and better than a human, essentially not needing a wheel.
Tesla went about it with an engineering perspective. First, cars that can send accumulated data over the Internet. Then, equipped with cameras. Then, with limited assistance, warning the user to take the wheel back in difficult situations. And sporadic updates adding support for more complex cases.
The end goal is identical; but they make money along the way.
This isn't what happened. The first iteration of Google self-driving cars, the modified Lexus', had wheels alright. What Google found and told the industry was "almost autonomous seems to be more dangerous than not autonomous at all", explained by the driver getting bored and complacent. This isn't surprising to people doing Human Factors, and while Tesla certainly made money off ignoring it, the result has already been tragic.
It's not just about the overall fatality rate per mile. Self-driving cars also need to not have any accidents that humans would have easily avoided. Until they demonstrate that, they're not going to be widely accepted.
Lidar sees a 3D cloud around the car with almost a cm accuracy. Better sensors could have most definitely prevented the accident.
However, to add to tesla's point. I have a car with adaptive cruise control. Not having to constantly check distance with car head has probably saved me once or twice from a crash.
Good auto-pilot's are definitely going to reduce human deaths on roads. Not only just deaths, but the amount of traffic all of us have to endure because someone just didn't keep the right distance from the car infront and bumped into them.
I'm all for open smart driving technology.
I see so many people (like the one two replies above) push the argument for the latter using the advantages that even the first would give.
Why? If they're overall much safer, then that seems like a net win to me—even if their failure modes are not identical to human ones.
There will, of course, be exceptions, as we've already seen (poor guy).
What are you comparing? a 70,000$ car with better safety standards to a 10 year old car! A car that's aimed to be completely autonomous (with driver assistance features) compared with a car completely human driven?
Can you not think beyond extremes? Here's a simple example. An always-on "Autopilot" (or any other driver assistance system) that only intervenes if the driver does a tragic mistake. We still have the important general intelligence of a human and the faster and reliable response of a machine.
I think it's more than that. I think driving requires a general level intelligence, and not a rule based AI.
For example, driving in the suburbs, you see a ball bounce in front of you. Expecting a chasing kid or a dog, you come to a stop. This isn't something a completely self driving car will do.
We use general intelligence to deduce what we don't see. But the car sees much much more than we do.
My point is not a specific example, but the importance of general intelligence.
In the most recent quarter, Tesla posted a $22 million profit, which was their first profit since first quarter 2013. There have been many times in Tesla's history where things were tight and risky. Things are looking good now, so it is exciting and Tesla seems to be going in a great direction.
It all comes back to Google having tons of money and thus being able to do things Googley.
I worked for a major RF test and measurement company when the first iPhone came out and everyone was blown away that a company could design and tool up production for a cell phone without tipping anyone off in the industry.
One seems to leverage the core competencies of an organization better than the other... One seems closer to starting from 0...
It was a ML company going from building ML for the internet to building ML for a car.
The first iPod Touch wasn't until September 2007, 3 months after the first iPhone.
When the iPhone 1 was released, the iPod range didn't have much on any other MP3 player. All the things that make an iPhone an iPhone - the touch-screen, multi-touch, iOS, didn't come from the iPod.
Perhaps iPod to iPhone wasn't quite 0 to 1, but it wouldn't have been much more than 0.001 to 1.
Which is not to say that Tesla is Doing It Wrong -- I personally am a much bigger fan of focused, iterative improvement than of wasteful throw-spaghetti-at-the-wall "moon shots." It just feels unfair to compare the two.
I wonder if he bought into the press likening him to Tony Stark...
Not really, there's a fundamental difference in the approach and desired result. Tesla is going for Level 3 autonomy (some human help needed on trip), Google attitude is more of Level 4 or bust.
There are pros and cons to both approaches.
Only killing a few people in the process, but hey who am I to judge?
Edit: you also became uncivil downthread. We ban accounts that do that. Please (re-)read the site guidelines and follow them:
It's not a problem to you that, say, Apple has "financed the suicides of dozens of Foxconn workers," or that GM killed 140 people by suppressing information on a defective ignition switch, or that Lockheed Martin and Halliburton buoy their stock by selling weapons to kill hundreds of thousands of people?
Evidently, you must find totally acceptable the gun-running, terrorist-sponsoring activities of HSBC in the last few years. I bet Google's permabanning of people from their own Google Apps accounts (because they were reselling a couple Pixel phones) is ethically fine with you, as well.
Never mind the tens of thousands of preventable automobile deaths yearly because car manufacturers refuse to implement even the most rudimentary of Autopilot functions.
Yeah, totally reasonable to pick on the electric car / solar battery company with $3b in revenue since one dope decided to drive into a truck and behead himself. There's nobody else deserving of criticism whatsoever.
Let's not even get started with how cocky their CEO has been with his fancy sustainable business plans!
p.s. I won't even attempt an ad hominem at the guy selling homeopathics and 'nutritional supplements' in this thread.
Also, Elon musk has done amazing work with electric cars, sustainable energy and space travel. No doubt about that.
But this is about Autopilot, a collection of driver assistance program. Not sure about OP, but my spite with Tesla is that they are pushing the above-mentioned driver assistance programs as self-driving features. This over-selling is going to kill people.
And for your information, lane keeping assist, lane driving assist, automated cruise control (which is pretty much AP1.0) have been present in several cars. Even self parking has been demoed by several cars. Add in automatic lane changing (which doesn't sound difficult to me), it wraps up Enhanced AP1.0.
Does that sound like a completely autonomous self driving car? Because that's what the public perception is like.
Please don't call names ('you spew') in arguments. If someone is wrong, explain so civilly.
I was the one personally attacked in this thread, not the other way around. Just because my comment doesn't fit the Musk Worship narrative doesn't make me wrong.
Was someone not killed by a malfunctioning / underprepared Tesla? What am I missing here????
What you're missing is that even though someone was uncivil to you on HN, you needed to remain civil in return. That's the social contract here, and we need it to prevent discourse from degenerating even further.
The ensuing attacker went to my profile, researched me and my business, and personally attacked me because they disagreed with my sentiment.
What is my recourse for action in such a case? Take it on the chin like a wimp? I don't think so.
If you don't provide appropriate tools to stop a tit attack, then you are fostering an unfair and "unsafe" environment by banning tit-for-tat response.
You are turning this community into a one-way echo chamber.
For civil discussion we all need to hold ourselves to a higher standard than the one we perceive other people to be keeping, because the only alternative is a downward spiral, and an accelerating one. If you want to keep commenting here, we need you to internalize that.