Insights from Google's Trials and Tribulations in Innovation
Written on
Chapter 1: Understanding Google's Ventures
Google stands as the world's leading search engine, handling over 40,000 searches every second. This staggering figure highlights why the majority of its revenue is derived from its Google Ads network. Since its establishment, Alphabet has continuously embarked on new projects and acquisitions in search of the next big product that could generate billions in revenue.
In contrast to many other prominent tech firms, Google's revenue is primarily ad-based. For instance, Amazon has successfully launched AWS and Prime, which contribute nearly 20% of its total revenue. Meanwhile, Microsoft has integrated companies like LinkedIn and Azure, which also add more than 20% to its earnings.
The bulk of Alphabet's income is generated from advertising, with only a mere 0.4% stemming from its numerous experimental ventures. Yet, the company persists in launching new projects each year.
Let's examine some of these endeavors and the lessons we can extract from them.
Section 1.1: A Glimpse at Alphabet's Unsuccessful Initiatives
You might be curious about the number of projects that have met their demise at Google. According to killedbygoogle.com, there are over 225 initiatives that have been initiated and subsequently terminated. Some of the most recognized failures include:
- Google Talk: This messaging service for text and voice was launched in 2005 and discontinued in 2013 in favor of Google Hangouts.
- YouTube Gaming: This live streaming platform lasted for over four years before shutting down, unable to compete with Twitch and Facebook Gaming.
- Google+: Launched in 2011 as a social networking site, it failed to gain traction and was officially closed in 2019.
Interestingly, some lesser-known projects include:
- Google Ride Finder: A service that utilized GPS to locate taxis and shuttles, which was discontinued in 2009, though it seemed close to an early Uber solution.
- Google Flu Trends: This initiative aimed to predict flu activity accurately but was shut down in 2013 after failing to match actual outbreak patterns. In light of COVID-19, its existence could have proved beneficial.
- Pie: A group chat platform similar to Slack that closed within a few years of its launch.
- Hire by Google: An applicant tracking system introduced in 2017 and discontinued in 2020.
Section 1.2: The Takeaways from Google's Experimentation
Google has generated numerous ideas, with its innovation labs producing intriguing products like AI-powered cameras and augmented reality glasses. While many concepts never reached the market, some have evolved into successful products today.
Although the Nexus line has been retired, Google has shifted its focus to the Google Pixel series, which has seen success. One aspect where Google excels compared to other firms is its ability to execute swiftly and maintain a lean structure. This approach enables the company to operate with a startup mentality, despite its large size. With numerous smaller teams working on projects globally, Google can quickly terminate underperforming initiatives and reallocate resources as necessary.
This agility has positioned Google to innovate effectively while also catching up in various markets. Although it was late to the cloud computing sector, the company has recently experienced substantial growth, bringing in $13.06 billion in 2020 with a 47% growth rate.
Chapter 2: Early Exits and Missed Opportunities
The first video, "Why Products Fail & How To Make Yours Succeed," explores the common pitfalls in product development and offers strategies for success.
The second video, "Google's Failed AI Experiment: 3 Key Lessons for Product Managers," discusses critical insights that can be drawn from Google's missteps in the AI sector.
While Google has made strides in various areas, it has also prematurely terminated some products. From communication tools to virtual reality, the company has launched numerous ambitious projects but often without allowing them the time needed to flourish.
For example, despite having multiple communication platforms, Google has closed many of them without establishing a definitive leadership position in that domain. Given its current offerings, one must question whether Google is prepared to fully commit to its latest ventures.
Currently, the company is exploring home technology, augmented reality, AI, and more. Although it was an early entrant in the home tech market, it has had to catch up to Amazon's aggressive expansion.
Section 2.1: Is Acquisition the Key to Google’s Future?
Google has a reputation for being willing to experiment and fail quickly, yet it has not introduced any groundbreaking products that have translated into significant returns in recent years. While one could argue that its app store and Google Maps have bolstered its market presence, these contributions are minimal compared to its primary revenue sources.
Although YouTube was a triumph, it was an acquisition made back in 2006. Recently, Google seems to be focusing more on acquiring startups to maintain a competitive edge in various sectors. From Nest to Waymo and Looker, the company is actively acquiring firms to ensure it has a presence in every growing tech domain.
With its past success with YouTube, it appears that Google may be adopting a different strategy moving forward. In my view, every major tech company is preparing to compete in significant emerging technology sectors, and Google is undoubtedly gearing up for the challenge.