Category: Entrepreneurship

Google Was Lax in Killing Failed Projects

(p. 255) Oddly, whereas Google had built its data infrastructure to reroute around failure, it had no human infrastructure to deal with failed projects. “We didn’t know which ones they were, because we never paused to ask ourselves that question,” says Pichette. “The people working on that project know it’s failing– as senior management you have to say, ‘Let’s declare failure– let’s get the champagne out and kill this puppy. Then we can put you on stuff that’s really cool and sexy.'” That had always been part of Google’s philosophy, but whether from lack of rigor or just distraction, the company had been lax in actually issuing execution orders. One of the first puppies Pichette helped drown was a virtual-reality-style communications program called Lively.

Source:
Levy, Steven. In the Plex: How Google Thinks, Works, and Shapes Our Lives. New York: Simon & Schuster, 2011.

Successful Entrepreneurs Focus Their Attention

(p. A31) Most successful people also have a phenomenal ability to consciously focus their attention. . . .
Control of attention is the ultimate individual power. People who can do that are not prisoners of the stimuli around them. They can choose from the patterns in the world and lengthen their time horizons. This individual power leads to others. It leads to self-control, the ability to formulate strategies in order to resist impulses. If forced to choose, we would all rather our children be poor with self-control than rich without it.
It leads to resilience, the ability to persevere with an idea even when all the influences in the world say it can’t be done. A common story among entrepreneurs is that people told them they were too stupid to do something, and they set out to prove the jerks wrong.
It leads to creativity. Individuals who can focus attention have the ability to hold a subject or problem in their mind long enough to see it anew.

For the full commentary, see:
DAVID BROOKS. “Lost in the Crowd.” The New York Times (Tues., December 16, 2008): A31.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date December 15, 2008.)

Google Gave YouTube Entrepreneurial Autonomy

(p. 250) But after the purchase [of YouTube], Google did something very smart. Almost as if acknowledging that overattention from the top had hobbled Google’s original video effort, the company made a conscious decision not to integrate YouTube. “They were edgy and small, and we were getting big,” says Drummond. “We didn’t want to screw them up.” (Google was also smarting from its $ 900 million acquisition of dMarc Broadcasting, a company dealing in radio advertising, which had not gone well. “They had tried more of a top-down approach with dMarc and considered that a disaster,” says Hurley.) YouTube would keep its brand and even stay in the building it had recently occupied in San Bruno, a former headquarters of the Gap.

Source:
Levy, Steven. In the Plex: How Google Thinks, Works, and Shapes Our Lives. New York: Simon & Schuster, 2011.
(Note: bracketed words added.)

Entrepreneurial Spirit Values “Voyaging into the Unknown”

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“Edmund Phelps, winner of the 2006 Nobel Prize for economics.” Source of caption and photo: online version of the WSJ review quoted and cited below.

(p. C7) Edmund Phelps’s “Mass Flourishing” could easily be retitled “Contra-Corporatism,” for at its heart this fine book is an attack on that increasingly common “third way” between capitalism and socialism. Mr. Phelps cogently argues that America’s current economic woes reflect a reduction in the innovative dynamism that generates economic success and personal satisfaction. He places little hope in the Democratic Party, which “voices a new corporatism well beyond Franklin Roosevelt’s New Deal or Lyndon Johnson’s Great Society,” or in Republicans in the thrall of “traditional values,” who see “the good economy as mercantile capitalism plus social protection and social insurance.” He instead yearns for legislative solons who “could usefully ask of every bill and regulatory directive: How would it impact the dynamism of our economy?”
. . .
The book eloquently discusses the culture of innovation, which can refer to both an entrepreneurial mind-set and the cultural achievements during an age of change. He sees modern capitalism as profoundly humanist, imbued with “a spirit that views the prospect of unanticipated consequences that may come with voyaging into the unknown as a valued part of experience and not a drawback.”
. . .
In . . . [the] new corporatism, the state protects both organized labor and politically connected companies. and the state has acquired a “panoply of new roles,” from regulations “aimed at shielding companies or workforces from competition” to lawsuits that “add to the diversion of income from earners to those receiving compensation or indemnification.” It is as if “every person in a society is a signatory to an implicit contract” in which “no person may be harmed by others without receiving compensation.” But protection against all conceivable harm also means protection against almost all change–and this is the death knell of dynamism and innovation.
. . .
But what is to be done? The author wants governments that are “aware of the importance of the role played by dynamism in a modern-capitalist economy,” and he disparages both current political camps. He has a number of thoughtful ideas about financial-sector reform. He is no libertarian and even proposes a “national bank specializing in extending credit or equity capital to start-up firms”–not my favorite idea.

For the full review, see:
EDWARD GLAESER. “How to Unleash the Economy.” The Wall Street Journal (Sat., Oct. 19, 2013): C7.
(Note: ellipses, and bracketed word, added.)
(Note: the online version of the review has the date Oct. 18, 2013, and has the title “BOOKSHELF; Book Review: ‘Mass Flourishing’ by Edmund Phelps; Innovative dynamism is the key to economic success and personal satisfaction, a Nobel-winner argues.”)

The book under review is:
Phelps, Edmund S. Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change. Princeton, New Jersey: Princeton University Press, 2013.

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Source of book image: http://blogs.reuters.com/great-debate/files/2013/08/Mass-Flourishing-cover.jpg

Multimillionaire Entrepreneur Ek’s Life Is Not Satisfying Without a Project

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“Daniel Ek” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. C11) As a 16-year-old computer geek, Daniel Ek applied for a job at Google but was turned down because he didn’t have a college degree. “I was kind of upset about that,” he says. “I was like, ‘I’ll show them–I’m going to create my own search engine!’ “

That turned out to be harder than he thought, so instead he spent several years building an online advertising company in his native Sweden (and no, he never did finish college). In 2006, he sold the company’s rights and related patents for over $2 million.
“Now I was 23 and a multimillionaire, but I didn’t have anything to do,” he said over lunch recently in midtown Manhattan. He became depressed. “You’re supposed to be the happiest guy on the planet but…there’s no reason why you’re existing,” he says. “I realized it’s really, really fun for a while to go big and go to all of these nightclubs,” but just spending money was not satisfying.
In search of a purpose, he came up with a new model for listening to music: Spotify, a digital streaming service that has made the music business look viable again.

For the full interview, see:
ALEXANDRA WOLFE. “Weekend Confidential: Daniel Ek.” The Wall Street Journal (Sat., June 22, 2013): C11.
(Note: ellipsis in original.)
(Note: the online version of the interview has the date June 21, 2013.)

Steve Jobs Felt Betrayed by Google’s Page and Brin

(p. 221) From all accounts, Jobs prided himself as a canny observer not only of business but also of human character, and he did not want to admit– especially to himself–that he had been betrayed by the two young men he had been attempting to mentor. He felt the trust between the two companies had been violated. After increasingly contentious phone calls, in the summer of 2008, Jobs ventured to Mountain View to see the Android phone and personally judge the extent of the violation. He was reportedly furious. Not only did he believe that Google had performed a bait and switch on him, replacing a noncompeting phone with one that was very much in the iPhone mode, but he also felt that Google had stolen Apple’s intellectual property to do so, appropriating features for which Apple had current or pending patents.
While Jobs could not stop Google from developing the Dream version of Android, he apparently was successful, at least in the first version of the Google phone, in halting its implementation of some of the multitouch gestures that Apple had pioneered. Jobs believed that Apple’s patents gave it exclusive rights to certain on-screen gestures–the pinch and the swipe, for example. According to one insider, Jobs demanded that Google remove support of those gestures from Android phones. Google complied, even though those gestures, which allowed users to resize images, were tremendously useful for viewing web pages on handheld devices.

Source:
Levy, Steven. In the Plex: How Google Thinks, Works, and Shapes Our Lives. New York: Simon & Schuster, 2011.

Entrepreneur Arik Achmon Stood Down Powerful Union to Keep His Company Alive

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Source of book image: http://www.seraphicpress.com/wp-content/uploads/2013/10/like-dreamers.jpg

(p. C2) Mr. Halevi, an American immigrant who has worked as a journalist and analyst in Jerusalem for 30 years, has created a textured, beautifully written narrative by focusing on seven men — and they are all men — . . . , who served in the paratroop brigade that conquered the Old City of Jerusalem in the 1967 war.
. . .
. . . , the men Mr. Halevi has chosen are compelling. One is Arik Achmon, a secular liberal from a kibbutz who helped transform Israel’s failing statist economy into a thriving capitalist one. Mr. Achmon helped found the first private domestic airline in Israel. The story of how he stood down the once-powerful Histadrut trade union federation to keep his company alive illustrates the enormous changes that Israeli society has undergone in the past three decades.

For the full review, see:
ETHAN BRONNER. “BOOKS OF THE TIMES; 7 Paratroopers and Paths They Took Through an Israel at a Crossroads.” The New York Times (Thurs., September 26, 2013): C2.
(Note: ellipses added.)
(Note: the online version of the review has the date September 25, 2013.)

The book under review is:
Halevi, Yossi Klein. Like Dreamers: The Story of the Israeli Paratroopers Who Reunited Jerusalem and Divided a Nation. New York: HarperCollins, 2013.

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“Yossi Klein Halevi.” Source of caption and photo: online version of the NYT review quoted and cited above.

Larry Page: “At His Core He Cares about Latency”

(p. 184) Speed had always been an obsession at Google, especially for Larry Page. It was almost instinctual for him. “He’s always measuring everything,” says early Googler Megan Smith. “At his core he cares about latency.” More accurately, he despises latency and is always trying to remove it, like Lady Macbeth washing guilt from her hands. Once Smith was walking down the street with him in Morocco and he suddenly dragged her into a random Internet café with maybe three machines. Immediately, he began timing how long it took web pages to load into a browser there.
Whether due to pathological impatience or a dead-on conviction that speed is chronically underestimated as a factor in successful products, Page had been insisting on faster delivery for everything Google from the beginning. The minimalism of Google’s home page, allowing for lightning-quick (p. 185) loading, was the classic example. But early Google also innovated by storing cached versions of web pages on its own servers, for redundancy and speed.
“Speed is a feature,” says Urs Hölzle. “Speed can drive usage as much as having bells and whistles on your product. People really underappreciate it. Larry is very much on that line.”

Source:
Levy, Steven. In the Plex: How Google Thinks, Works, and Shapes Our Lives. New York: Simon & Schuster, 2011.

Push the Flywheel, in Business and Life

Jim Collins makes wonderful use of the flywheel analogy in his Good to Great book. His point is that many achievements in business require long, gradual work to build to a major achievement that finally gets noticed by the business press and the general public. The business press often assumes that the success is overnight, when it is in fact long-building.

(p. C14) Flywheels – weighted wheels used for absorbing, storing and releasing energy – get used in everything from pottery wheels to car engines. Lately, they have showed up in corporate spin.

“Our more than 19,000 store global footprint, our fast-growing CPG presence and our best-in-class digital, card, loyalty and mobile capabilities are creating a ‘flywheel’ effect elevating the relevancy of all things Starbucks, and driving profitability,” CEO Howard Schultz said in a statement accompanying quarterly earnings last month.
“So we have the flywheel spinning in the right direction because it is spinning one way and letting us generate these margins, contribution margins,” said Overstock.com CEO Patrick Byrne last month. “And so now we can give some of that back and that makes it easier to get it spinning faster.”
“We are at the one-mile market (sic) in a marathon,” commented Symantec CEO Steve Bennett in an earnings call with analysts last week, “and the flywheel is just starting to spin.”

For the full story, see:
JUSTIN LAHART. “Overheard.” The Wall Street Journal (Weds., Aug 6, 2013): C14.
(Note: the online version of the story has the date Aug 6, 2013, and had the title “Ride a Painted Pony, Let the Spinning Wheel Fly.” The print version did not identify an author. The versions were slightly different in two or three places–when different, the version quoted above follows the print version.)

The Collins book, mentioned above, is:
Collins, Jim. Good to Great: Why Some Companies Make the Leap… And Others Don’t. New York: HarperCollins Publishers, Inc., 2001.

Google’s Redundant, Fault-Tolerant System Worked with Cheap, Low-Quality, Failure-Prone Equipment

(p. 183) Google was a tough client for Exodus; no company had ever jammed so many servers into so small an area. The typical practice was to put between five and ten servers on a rack; Google managed to get eighty servers on each of its racks. The racks were so closely arranged that it was difficult for a human being to squeeze into the aisle between them. To get an extra rack in, Google had to get Exodus to temporarily remove the side wall of the cage. “The data centers had never worried about how much power and AC went into each cage, because it was never close to being maxed out,” says Reese. “Well, we completely maxed out. It was on an order of magnitude of a small suburban neighborhood,” Reese says. Exodus had to scramble to install heavier circuitry. Its air-conditioning was also overwhelmed, and the colo bought a portable AC truck. They drove the eighteen-wheeler up to the colo, punched three holes in the wall, and pumped cold air into Google’s cage through PVC pipes.
. . .
The key to Google’s efficiency was buying low-quality equipment dirt cheap and applying brainpower to work around the inevitably high failure rate. It was an outgrowth of Google’s earliest days, when Page and Brin had built a server housed by Lego blocks. “Larry and Sergey proposed that we design and build our own servers as cheaply as we can– massive numbers of servers connected to a high-speed network,” says Reese. The conventional wisdom was that an equipment failure should be regarded as, well, a failure. Generally the server failure rate was between 4 and 10 percent. To keep the failures at the lower end of the range, technology companies paid for high-end equipment from Sun Microsystems or EMC. “Our idea was completely opposite,” says Reese. “We’re going to build hundreds and thousands of cheap servers knowing from the get-go that a certain percentage, maybe 10 percent, are going to fail,” says Reese. Google’s first CIO, Douglas Merrill, once noted that the disk drives Google purchased were “poorer quality than you would put into your kid’s computer at home.”
(p. 184) But Google designed around the flaws. “We built capabilities into the software, the hardware, and the network–network– the way we hook them up, the load balancing, and so on– to build in redundancy, to make the system fault-tolerant,” says Reese. The Google File System, written by Jeff Dean and Sanjay Ghemawat, was invaluable in this process: it was designed to manage failure by “sharding” data, distributing it to multiple servers. If Google search called for certain information at one server and didn’t get a reply after a couple of milliseconds, there were two other Google servers that could fulfill the request.

Source:
Levy, Steven. In the Plex: How Google Thinks, Works, and Shapes Our Lives. New York: Simon & Schuster, 2011.
(Note: ellipsis added.)

Covey Was Amazon’s Entrepreneurial CFO

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Joy Covey and son Tyler. Source of photo: was posted on Joy Covey’s Google+ page: https://lh6.googleusercontent.com/-3CNdHv-7W3A/Thx9kuMHEPI/AAAAAAAABKs/lX9H2JlJ_lg/w763-h762-no/J+%2526+T+snowbird.jpg

(p. D8) As Amazon’s first chief financial officer, Ms. Covey helped take the company public and was an independent-minded advocate for Amazon’s plans to ignore Wall Street and invest for the future. That notion, radical in its day, was the foundation for Amazon’s growth into a $61 billion retailing and entertainment behemoth.

In its early days, Amazon prided itself on its unconventional hires, telling staffing agencies to “send us your freaks.” Ms. Covey did not have a traditional background. She dropped out of high school at 15 and worked as a grocery clerk. She attended Cal State Fresno and later Harvard Law School, where, she said, she did not fit in.
“We’d go to lunch and people would talk about their favorite 17th-century poets, and I’d be thinking, ‘Could I even name five poets? From any century?’ ”
But after joining Amazon in late 1996, when its annual revenue was less than $20 million, she thrived. She sold Wall Street the debt that the company needed to expand. The company went public on May 14, 1997, with an initial offering price of $18. Shares this week were selling for more than $312. Her own wealth is estimated at more than $200 million.

For the full obituary, see:
DAVID STREITFELD. “Joy Covey, 50, Top Executive in Amazon.com’s Early Days.” The New York Times (Sat., September 21, 2013): D8.
(Note: the online version of the obituary has the date September 19, 2013, and has the title “Joy Covey, Top Executive in Amazon.com’s Early Days, Dies at 50.”)