Interesting lessons from Google’s CEO Eric Schmidt!


For every Internet startup, Google is GOD! And most of the entrepreneurs in this line are inspired by the Google story (and also with the book by same name). It’s amazing that how even after 10 years of existance Google has maintained its brand image as a truely innovative company.

I was recently reading this interview of McKinsey Quarterly with Google’s CEO Eric Schmidt and found it really informative. I’m sharing some very interesting points which should serve as a lesson to budding entrepreneurs like us-

1. [The real model for any Internet startup should be to have both the head and the tail]- Head is where all the money is and tail is where we have differentiation and diversity. How Schmidt describes this is- the effect of Power law (“property that a small number of things are very highly concentrated and most other things have relatively little volume”). ” So, while the tail is very interesting, the vast majority of revenue remains in the head. And this is a lesson that businesses have to learn. While you can have a long tail strategy, you better have a head, because that’s where all the revenue is.” This is a very good lesson for Indian Internet startups, as most of the time we are too much excited about the idea part without thinking much about the revenue part.

2. [Talk to your Customer]. A very valid point is- Internet levels playing fields in many ways (distribution, branding, money and access). Hence if we don’t listen to our customers, competitors will and that’s why every startup need to be on its toes to listen to their customers and responding to them.

3. [Create a Crisis]. “In a corporation the role of a leader is often not to force the outcome, but to force execution”- that’s a line I’d love to memorize :-)! Creating a crisis sends a sense of urgency among people who are implementing any idea to complete thier tasks within deadlines.

4. [How to make people dissent your opinion?]. The important term here is not “dissent” but “make”. As we know its very important to get a dissenting opinion from critics during any discussion related to a new idea. Generaly its very difficult to make people disagree Boss’s opinion in front of top managers. Eric says “What I try to do in meetings is to find the people who have not spoken, who often are the ones who are afraid to speak out, but have a dissenting opinion. I get them to say what they really think and that promotes discussion, and the right thing happens.”

5. [Slog more]. That may sound a bit harsh, but its the truth. People who are driven by a sense of speed or crisis are the one’s who are going to rise to the top. Eric gives a classic example of a Blogger in this connected world- “Bloggers, for example, can’t sleep. It’s so competitive that if they go to sleep, and a story breaks all the clicks from their blog go to the others. So bloggers end up sort of disasters on a human scale because they can’t deal with the fact that they can’t even sleep, it’s such a tense environment.”

6. [Google’s innovation tactics]. “Innovation always has been driven by a person or a small team that has the luxury of thinking of a new idea and pursuing it”. “So, in our case, we try to encourage [innovation] with things like 20 percent time, and the small technology teams, which are undirected. We try to encourage real thinking out of the box. We also try to look for small companies that we can acquire. Because, often, it’s small companies which have the great new ideas. They have gotten started with them but can’t really complete them.” Google’s objective is to be a systematic innovator at scale.

7. [How organization Structure helps Google foster innovation?]. “One of the things that we’ve tried very hard to avoid at Google is the sort of divisional structure and the business unit structure that prevents collaboration across units. It’s difficult. So, I understand why people want to build business units, and have their presidents. But by doing that you cut down the informal ties that, in an open culture, drive so much collaboration. If people in the organization understand the values of the company, they should be able to self organize to work on the most interesting problems. And if they haven’t, or are not able to do that, you haven’t talked to them about what’s important. You haven’t built a shared value culture.”

I hope this was helpful to you guys. I’d suggest you all to go through the complete interview once. It’s amazing!