Editor's note: Recently, Google has been a bit annoyed. On the one hand, when the company released its third quarter report, its revenue and profits exceeded market expectations, but its market value evaporated by over one trillion yuan overnight; On the other hand, anti-monopoly lawsuits against Google are on the rise, and the US Department of Justice's monopoly lawsuit against Google is aimed at splitting it up.
Google, which has just turned 25 this year, has all the characteristics of a global technology giant. Generally speaking, if a company has a product with over 100 million users, it is basically the leader in its field, and life can be very comfortable. Google currently has 15 products, each serving over 500 million users, and 6 products serving over 2 billion users.
In 1998, Microsoft, which controlled the two major systems of Windows and Office, firmly held onto the global computer desktop; Yahoo has become a portal for global internet users. In September of the same year, two young people, Larry Page and Sergey Brin, who were still studying in college, founded Google with a $100000 investment and launched the Google search engine. Today, 25 years later, Google has grown into a global technology giant with a market value of nearly $2 trillion.
From a small online search company to a global leader in multiple fields, Google's rapid rise has amazed the industry. Any success has its own rules and is worth learning from. In its development process, Google has created a series of unique methods and culture, becoming the best footnote in its rapid rise. Starting from this issue, a reporter from China Business Daily will review and sort out the joys, sorrows, and lessons behind the rise of global technology giants with you.
1. Methodology
Engineer culture and OKR
If one word is used to describe Google's culture and temperament, "engineer" may be the most essential. From a small detail, one can glimpse a glimpse: the company name Google comes from googol, which means 10 to the 100th power.
In the entire Google ecosystem, engineers are at the top of the food chain. Many articles about Google mention the "20% system" - where each engineer can freely allocate 20% of their work time. That is to say, Google engineers can set aside a whole day every week to do anything they want to tinker with. Because Google adheres to the belief that only by making engineers enjoy their work can work be efficient.
Many of Google's famous products today stem from this system, such as Gmail, which provides email services, Adsense, Google's most profitable advertising tool, and Google Maps, which has a monthly activity of over 150 million.
Google's first employee, Craig Silverstein, said that we all hope to have the same corporate culture, such as emphasizing employees' ability to independently develop, allowing them to choose their favorite development projects, and being able to speak freely. In summary, employees should learn to "find work" on their own, rather than waiting for others to "assign work" to them.
Google's innovation lies not only in technology, but also in its management model. Its internal management appears to be very loose: both employees and the CEO have to make their own copies of documents; Employees can move their homes to the company and work at any time; There are also swimming pools and piano practice rooms in the company. No wonder many Gu Ge people are striving to achieve success, because they regard Google as their own home, which is actually in line with human nature.
At the beginning of Google's founding, this "engineering culture" was already ingrained in Google's genes.
In the mid-1990s, two young founders, Page and Brin, began researching their doctoral thesis projects. At that time, some internet search engines had already emerged, but they often ranked the results based on the content of the search website, and the accuracy and efficiency of these search results were not satisfactory.
Page and Brin found a better way. If we analyze the importance of web pages based on the number of hyperlinks between them and sort them accordingly, the quality of search results will be much higher because more important pages are often referenced more by other pages. This algorithm is the PageRank algorithm, which later became the foundation of Google search engine.
Founders and visions often determine a company's culture, with two engineer founders giving Google an innate engineering temperament and a very flat organizational structure that facilitates the implementation of the OKR (Goal and Key Results Approach).
Since then, all of Google's successes seem to be constantly reinforcing this engineering mindset - if your product is really useful enough, go ahead and do it, and then there will naturally be other things.
In the early 20th century, modern management theory emerged, and its pioneers believed that the most efficient organization should be authoritarian, with some giving orders and others accepting and executing them. This is known as the Taylor Ford model.
Half a century later, Peter Drucker, the father of modern management, rejected this model and conceived a new management philosophy: result driven management with humanism. He believes that the company should be based on trust and respect for its employees, rather than just using them as profit machines. In 1954, Drucker defined this principle as "goal management and self-control" in his book "The Practice of Management", which also became the origin of OKR.
The OKR system mainly has four major weapons: focus, collaboration, tracking, and challenge. OKR is a precise communication tool that helps employees clarify their goals and focus on key success factors; Bottom up OKR, by strengthening employees' sense of ownership, promotes individual participation and innovation; Meanwhile, OKR is data-driven, with regular checks, target ratings, and continuous reassessment allowing it to be implemented layer by layer. By challenging limits and allowing for failure, OKR can encourage employees to unleash their most creative selves.
Research has shown that achieving quantifiable progress is more motivating for individuals compared to external recognition, monetary stimulation, or achieving goals themselves. Google divides their OKRs into two categories, one called commitment goals and the other called vision goals. The former is closely related to daily assessments, while the latter is more abstract and focuses on strategic direction.
In the process of OKR practice, the biggest resistance usually comes not from ability and resources, but from cognition. The transformation of thinking is more important than the application of tools. Many people regard OKR as a KPI like assessment tool, ignoring the advocated transparency, trust, autonomy, and result orientation behind it. In fact, it is another expression of engineer thinking.
At the bottom of the Google company pyramid, you can directly reach the top leaders for communication, because the most important thing in their organization is the vision rather than their position, which is a very important structure. Google hopes to win the hearts of its employees through culture. Because with a common set of values, everyone will have mutual understanding and tacit understanding.
When receiving the first $1.01 million angel investment, the investor made a request to the two founders to hire an experienced CEO to manage the company once it began to take off. After all, the two founders are not very interested in management, customer relations, external communication, and so on. Engineers don't like business, they like creation.
For many entrepreneurs, the ultimate goal of entrepreneurship is to go public, and Page and Brin have been worried that the series of public operations after going public will harm Google's independence and values.
In 2004, Google began preparing to go public. In the prospectus, there is also an open letter drafted by the two founders. At first, the US Securities and Exchange Commission did not agree to include this public letter in the prospectus because they believed it did not contain any useful information for investors.
Nevertheless, Google still argued with reason and attached the letter to its prospectus. The entire letter is indeed unrelated to investors. The founder has always emphasized Google's values: focusing on the future, serving users, not doing evil, and making the world a better place. "Google is not a traditional company, and we do not intend to become one of them."
2. Worldview
Problem oriented open source first
Amidst a burst of mockery from peers and the internet, on April Fool's Day in 2004, Google did a "foolish" thing by releasing a 1GB free email Gmail. Although it was a free email, it was not allowed to register casually and required an invitation. Online insults erupted, mocking Google's nonsense. Compared to mainstream email addresses at that time, with only 10MB and 20MB of space, and almost unlimited registration, Google seems to be specifically targeting it.
As a result, due to the astonishing capacity of Gmail, a large number of Hotmail and Yahoo Mail users were lost, and they had to subsequently announce expansion and launch new versions; Also, because things that were harder to obtain became more precious, owning Gmail became a symbol of "nobility" at that time. In just two years, Gmail has become one of the world's top three email providers.
In this year's 25th anniversary public letter, Google CEO Sandal Pichai stated that all company products start with one issue. The question with Gmail is, can we provide 1GB of storage space for each person? For Chrome browser, can we create a browser with simplicity, speed, and security as its core to make the network better? Before Chrome was released, I also raised a question myself: Will people use it?
"Every time, we have given the answer, which is to make the company stronger. Our unique focus on mission, belief in applying computer science to improve people's lives, and rational disregard for the impossible have guided our actions," said Pichai.
Problem oriented approach enables Google to always return to the essence of each industry and the starting point of user needs in complex situations and business wars, seize the most critical points, take unique paths, and achieve success with one strike. And this also gives Google a wild imagination and an open and inclusive demeanor.
Looking at Google's past and successful experiences, its main differentiation advantage lies in its open source strategy. The open source strategy can fully utilize Google's accumulated business resources and capabilities, and can maximize the potential of the market.
As of now, Google has mastered over 2000 open source projects, from the TensorFlow machine learning library to the Kubernetes cloud native development platform, which are highly attractive high-quality resources for the B-end.
In 2007, Steve Jobs launched an iPhone that went viral, ushering in the era of connected smartphones. Many speculated that Google, which occupied a lot of resources, would launch a smartphone that would benchmark against the iPhone. However, Google, along with 34 phone manufacturers, software developers, telecommunications operators, and chip manufacturers, created the "Open Handheld Device Alliance". On the day of its establishment, Google released the open-source Android (Android) system.
Although released almost simultaneously with Apple's iOS, the early Android system was unstable and not user-friendly, accounting for only 1.69% of the market share in 2009. At that time, iOS had a market share of 37.45%, while Symbian OS had a market share of 36.94%.
But Google, which focuses on software systems, not only avoids homogeneous competition with mobile phone manufacturers, but also continues to focus on and develop Android systems, making its developer tools increasingly rich. The application distribution platform Google Play is also becoming more and more popular.
More importantly, its feature is open source and openness. Because of open source and openness, it has become flexible, intelligent, multi hardware compatible, and fast iterating. From economy to high-end flagship, from native systems to customized user interfaces, the open-source Android system is open to global users, making it a common choice for mobile phone manufacturers and people worldwide in the wave of smartphone popularity. Nowadays, Android system is almost synonymous with mobile phone systems, accounting for 70% of the global market share of mobile phone systems. In addition to Apple's iOS, mainstream mobile phone brands such as Samsung, Huawei, Xiaomi, OPPO, and vivo previously used the Android system.
The position of the king of Google Chrome also stems from a keen grasp of timing and the open source sharing model.
In 2008, at the Chrome press conference, Google CEO and then Chrome team leader Pichai said, "We hope to collaborate with the entire community to drive the Web forward."
Chrome did it. The concise and modern pages, as well as the support for more functional extensions, and the integration of the most powerful search engine, Chrome, are rapidly seizing the browser market. In 2009, Chrome became the browser with the largest increase in market share throughout the year. In 2010, Chrome's market share surpassed that of Opera and Safari; In 2012, Chrome had a global market share of 33%, surpassing IE to become the top player and continuing to this day.
One key factor contributing to the rapid popularity of Chrome is still open source. Unlike Safari, which has not ventured out of the Apple ecosystem for many years, Chrome's initial goal was not to increase the system's defensive wall, but rather to pursue market share. In 2012, the Android version of Chrome was released on Google Play. The next day, Chrome launched the iOS version and fully entered the mobile platform.
In today's world of multiple digital devices, this openness breaks down various ecological barriers, and the rich plugin store also shapes the usage habits of Chrome users.
Google search, Android system, YouTube, Chrome... Google's various products have different features and fields, but they all have one commonality: no device selection, enough openness, enough features, most services, and achieving the best experience in one field. Therefore, many of Google's products that appeared more than ten or twenty years ago are still active in our daily internet life.
3. Amplifiers
Timely acquisition and successful replication
"Most companies ultimately fail because they do well in one thing, but cannot do better in the next. They have not expanded their mission, challenged themselves, or continued to build other platforms. They are all gradualists," said then Google CEO Schmidt.
Google says this because it is itself the best example. Google, which has mastered technology, capital, and methodology, has begun to expand without boundaries. It is also the continuous success of mergers and acquisitions and replication that has taken Google step by step to its peak.
In fact, apart from the initial Google search, core businesses such as YouTube, Android, and Google Maps were all acquired through mergers and acquisitions, and these services have also laid a good ecological foundation for Google, laying its dominant position.
Google, with its search done well, quickly began its expansion path. Google is like a sharp predator, and every time a promising industry company prepares to take off or threaten Google's existing business, it quickly takes over. Over the years, Google's strategy has been proven to be effective.
Looking back at the history of mergers and acquisitions by global technology companies, acquisitions, especially cross-border acquisitions, often end in failure. However, Google has done a comprehensive job in the process of mergers and acquisitions, with most successful cases. Wang Huainan, former Marketing Director of Google Asia Pacific and Founder and CEO of Babytree, used YouTube and Google Maps as examples to point out that after being acquired, not only can it integrate into Google culture, but in the process of independent development, it will also be endowed with a healthier business model by Google.
In January 2005, Google launched its video sharing and search service - Google Video. In April of the same year, YouTube was founded, and with the slogan "Broadcast Yourself," YouTube stepped into the wave of self media. A year later, YouTube announced that over 65000 new videos were uploaded to YouTube every day, with nearly 100 million views per day.
Faced with the fierce competition from YouTube, Google Video was quickly marginalized. If it couldn't be won, it was acquired. In October 2006, less than half a year later, Google announced a high price of $1.65 billion to acquire YouTube, which was founded 20 months ago and had only 67 employees at the time. After the acquisition, YouTube is still operated internally by its founder and employees. Google does not directly intervene in daily operations, but influences and supports YouTube's growth in a deeper way.
At the beginning of its establishment, a large influx of content and users brought many challenges to the immature commercialization of YouTube, such as copyright and bandwidth, which were all solved by Google.
With the support of Google, YouTube has established a relatively benign business model of "users watching high-quality videos for free, creators sharing profits through advertising", making self media a legitimate industry and allowing YouTube to become a profession. With the popularization of broadband, photography equipment, and mobile devices, the era of self media video has arrived.
With the support of Google's technology and capital, YouTube continues to maintain high growth, gradually surpassing its competitors MSN Video and Vimeo... 18 years after its establishment, it remains the world's most popular video platform and maintains the activity of the world's second largest website.
In 2005, Google's acquisition of Android was another key move in Google's development history.
In 2003, a geek team led by Andy Rubin developed a smartphone system and wanted to compete with Nokia's Symbian and Microsoft Windows Mobile, giving birth to the Android system. Two years later, Google, which saw the rise of the mobile internet trend, acquired Android for over $50 million. Afterwards, Google invested a large amount of funds and resources to support the development and promotion of the Android system.
As mentioned earlier, in 2009, the market share of Android systems was less than 2%. However, with Google's open source concept and the support of Google's funds and technology, Android systems entered the hands of billions of users worldwide, monopolizing 70% of the global mobile system market share.
Google has proven to the industry that internet companies should seek diversified development and can do well. Google has been replicating its philosophy, methodology, and success from search to various fields such as email, maps, cloud services, and mobile operating systems. Google, which has mastered the methodology of success, is far and wide.
Observation