Commentary

Everything I Need to Know About Business I Learned From Google

by Aaron Goldman , Op-Ed Contributor, October 21, 2009

And the beat goes on. What started off as 10 simple marketing lessons learned from Google blossomed into 15 and then 20 before seeding a full-fledged book (in-progress). From there, I dove into lessons from Google about product development. Today, I'd like to bring it up a level to what Google can teach us about general business practices. For my next topic, I think I'll lighten the mood with we can learn from Google about dating -- so start tweeting your suggestions now!

1. Innovate or die. Google fosters a culture of innovation by allowing employees to spend 20% of their time working on non-core projects. And, for core projects, it puts a relentless focus on continuous improvement. Heck, in the past year alone, Google made 359 changes to its Web search product. I guess when it's as easy as a click to switch from Google's bread-and-butter product to a competitor, it had better keep innovating. Netflix is a great example of a company devoted to innovation. It runs a contest awarding $1 million to anyone that can improve its recommendation algorithm by 10%.

2. Automate or die. Despite ballooning to over 20,000 employees, Google is still a very lean operation. It's long held the belief that most problems can be solved by machines, not people. For example, when it first developed its search engine, rather than manually classify the Web into a directory of helpful links -- as some other companies had -- it created a technology to crawl the Web and assign value to Web sites based on the number of inbound-links. Search marketers know better than anyone the power of automation -- whether that means bid management or multivariate testing. One that I'm particularly fond of is Kenshoo for its ability to automate not just the bidding process, but many parts of the campaign management process, including keyword generation and copywriting.

3. Tap the long tail. This, of course, is another Chris Anderson theory -- in my last column, I riffed on "FREE" -- that draws from Google or, rather, helps explain its success. Google has made a living on the tail, from allowing people to access obscure Web assets to activating small mom and pop advertisers. Anderson's book has plenty of examples showing companies exploiting and profiting from the long tail, so I won't rehash them all here. Clearly, though, the Internet has moved the market for many products from mass to niche. When it comes to drawing up a business plan, size simply doesn't matter as it used to. Scale, on the other hand, matters very much. Just don't confuse the two. One example worth highlighting here is crowdSPRING, a start-up in Chicago. CrowdSPRING has unleashed the power of the long tail for sourcing creative services. Anyone can post a project and a bounty and get submissions from around the world before choosing the one they like best.

4. Keep your head in the cloud. Google has made no secret of the fact that it believes cloud computing is, to quote Howard Hughes, "The way of the future." Google's product suite -- from Search to Gmail to Docs -- fully harnesses the power of the cloud and makes it one of the world's biggest metaphorical squatters on the other Big G's real estate. I've been on a bit of a sustainability kick lately. Scott Kier, a friend and colleague, has opened my eyes to the power of the triple bottom line -- people, planet, and profit. Not only is cloud computing environmentally friendly due to improved resource utilization, but it can be people- and profit-friendly as well by eliminating data-loss and fostering virtual-collaboration. The concept of tethering employees to offices in knowledge-work industries is quickly being proven ineffective. Let your people work from anywhere and reap the benefits of increased productivity -- no more death-by-meeting, not to mention, lower rent and overhead. Salesforce.com is a terrific application of cloud computing, allowing customers to manage CRM effectively and collaboratively. And HP is a company that's long embraced the "work from anywhere" model to much success.

5. Don't scare users.Google practices this principle in a number of different ways, and it was part of its early rallying cry when introducing advertising. From its clean, inviting homepage to its overt lobbying, er... I mean disclosure around data collection and privacy protection -- Google goes to great lengths to avoid scaring consumers. Google also works hard to keep from frightening its other core constituents -- media publishers, advertisers, and agencies -- with varying degrees of success. Ain't that right, Frenemy? There are plenty of organizations that have put this lesson to good use. One recent example is the Corn Refiners Association running a campaign to dispel myths about high-fructose corn syrup.

I'll close this thread in my next column with...

6. Respect the law of supply and demand.

7. Focus on your hard-core users first. (Submitted by Dave Chu of Eton Corporation.)

8. Keep your customers close and your competitors closer.

9. Follow the law of averages. (Via David Gould of Resolution Media.)

10. Find your golden goose, then give away the farm.

11. Make yourself very profitable for other businesses. (Another Chu-ism.)

4 comments about "Everything I Need to Know About Business I Learned From Google ".

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Lorenzo a. Morales from Massive Company, October 21, 2009 at 11:25 a.m.
Aaron, these last few articles on Google have been undebatably spot-on. Google has proven time and time again that it can be successful cranking out the bread and butter and surprising people/users. Now what can 'wave' and 'facebook' teach us about business? Will companies adapt to open-ness and a future employee pool used to being online all the time?
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Chris Koch, October 21, 2009 at 11:33 a.m.

Please don't take this the wrong way, but what really enables Google to do what it does is that it has a near monopoly in the search market and can charge a tax on any business wishing to reach its customers through the internet. By tax I mean that there can be little price sensitivity when Google is (pretty much) the only game in town. That makes you rich and enables you able to fund a lot of research and development. Google is following the tradition of a lot of benign monopolists who take their hefty profits gained from near total market control and put some of that money into research. Anyone remember Sarnoff Labs, Xerox PARC, etc.? Not to take away from Google's innovative capabilities and intentions, but you can afford to act like Google when you're in Google's market position.

Howie Goldfarb from Blue Star Strategic Marketing, October 21, 2009 at 1:02 p.m.

Google has done some great things with it's business model. Success also breeds rebellion. I changed to Bing purely because Google needs competition and in testing Bing turned out better results in my view 3 out of 5 times. I chose Firefox and Open office purely as a rebellion against Microsoft. My desktop is even Linux based.

One area of concern is the cloud. I use Salesforce.com. It also has my data hostage. If you think Operational Software companies like SAP and Oracle hold businesses hostage, imagine what Cloud Companies can do. While operationally and cost measurement wise the Cloud makes sense. For protecting your data and allowing it to transfer to another vendor when needed this could be very challenging.

Aaron Goldman from Mediaocean, October 31, 2009 at 5:37 p.m.

Sorry for the delayed response. Appreciate the feedback guys.

Lorenzo - no doubt there are some critical lessons to learn from Facebook and other always-on communication platforms. Don't think anyone's cracked the code on how to leverage them from a marketing standpoint. Best advice at this point is to monitor the conversation and interject when appropriate. I touched on this with lesson #6 in my first column -- "Don't Interrupt. " http://www.mediapost.com/publications/index.cfm?fa=Articles.showArticle&art_aid=112292

Chris - no argument here. That said, there are good monopolies and bad monopolies. Good monopolies are those that achieve their position thru "no evil" and don't lock their customers into using their products. With search, a competitor is always one click away.

Howie - not sure why you think cloud computing takes your data hostage. I think it's quite the opposite. With you data in the cloud, you can access it anywhere at anytime. And most platforms, including Salesforce, allow you to download and export all your data to another platform very easily.