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Amazing Business Story: Google Boys

by Valentine Ogbamebor

Born in the kind of home that Larry Page was born in, it is no wonder he turned out the way he did. Larry Page was born in East Lansing, Michigan, United states on March 26, 1973 to Carl Vincent and Gloria Page. His father was a Professor in Computer science in the University of Michigan and has been described as a pioneer in computer science and artificial intelligence. His mother was also a professor in computer science and was an instructor in computer programming.

Larry grew up surrounded by computers and computer magazine and this fueled his fascination with the amazing machine. His flair for business was however kindled after he read the story of Nikola Tesla, a brilliant inventor who died in penury because he couldn’t understand how to sufficiently monetize his inventions. Larry, at 12 years of age, determined he was going to start a company that would benefit lives and he would not be cheated out of his innovations. But that dream was going to tarry of a little more than a decade to come to fulfillment.

In 1991, Larry enrolled in the University of Michigan to study Computer engineering, he then went ahead to obtain his Masters’ degree in the Computer science from Stanford University. In 1995, when he was just 22 years old, and was considering doing his Ph.D in Stanford that Larry met the boy who would turn out to be his long time business partner and friend, Sergey Brin. Sergey, who was 21, was already pursuing his Ph.D in the same department. Despite the brilliance of the two boys, both of them said on a rough patch. Both of them found each other obnoxious and they argued over a lot of issues. But at the same time they spent a lot of time in each other’s company.

Sergey’s background is in many ways similar to that of Larry. Sergey was born in Moscow, Russia, on August 21, 1973 to Russian Jewish parents, Yevgenia and Mikhail Brin. His father was a mathematics professor in the University of Maryland while his mother a researcher at NASA‘s Goddard Space Flight Center. Sergey’s family had to relocate from Russia when he was six because of racial discrimination; Jews in Russia were barred from attaining certain upper professional ranks and were also prevented from studying certain courses.

As a research project during his Ph.d, Larry considered exploring the mathematical properties of the World Wide Web, understanding its link structure as a huge graph-basically, Larry’s project was to find out the total number of links that leads to a given page and to use that number and nature of those links (called backlinks) to rank that page. The research project was named Backrub. This was in 1996.

Sergey, who was more of an extrovertial and naughty fellow (he was known to always barge into his professor’s offices without knocking), was yet to begin working on any thesis topic, he moved from one research group to another asking what they were working on, and since it didn’t interest him, he moved on. He however was held spellbound by Larry’s challenging research and decided to join him.

To achieve his ambition of counting all the links in all the documents on the web and qualifying them, Larry had to build a massive web crawler that could crawl 10 million documents. The task was outrageously massive, but Larry started.

Larry’s BackRub web crawler worked perfectly well ranking pages according to their importance by determining the number of its backlinks. To convert the backlink data gathered by BackRub’s web crawler into a measure of importance for a given web page, Brin and Page developed the PageRank algorithm, and realized that it could be used to build a search engine far superior to existing ones. It was a pleasant discovery that they had stumbled upon.

Page recalled: “We realized that we had a querying tool. It gave you a good overall ranking of pages and ordering of follow-up pages.”

The boys believed their search engine would perform better than the existing search engines, so they got to work to make it even better. They decided to use Larry’s dorm room as the machine laboratory while using Sergey’s as their office and programming base. Sergey’s basic HTML knowledge was used to set up a simple search page for users.

By 1997 the search engine had grew rapidly in popularity, garnering up to 10,000 searches every day. The boys considered selling their project and talked to Yahoo! and several other companies, but none of them were ready to part with any real money. In the end the boys just went back to school and decided to build their own company. They discarded the name Backrub and adopted Google; Google was from the mathematical term googol which refers to the number 1 followed by one hundred zeros, this represented the vast amount of data that the search engine was intended to explore and organize.

After opting to build their own company, they knew they needed to raise capital to finance their ambition. They were able to raise $1million from friends and family after which they moved from their college dorm and rented a garage in Menlo Park. Part of the money was also used to purchase servers for the search engine. Shortly after, Sun Microsystem Andy Bechtolsheim contributed the first venture capitalist funding to the startup with a cheque of $100,000.

On September 4, 1998, the company, Google Inc. was legally incorporated with Larry Page as the CEO. By 1999 the company had eight employees and the garage had become too small for them, so they moved to Palo Alto in California; the office complex would be known as Googleplex.

By June 2000 Google had indexed one billion Internet URLs, or Uniform Resource Locators, making it the most comprehensive search engine on the Web at the time.

Google had undoubtedly started showing great promises and prospects of becoming an internet giant by 2000, it is at this time that Larry’s story began to shape like that of Steve Jobs.

On one morning of July 2001, Larry announced that he was letting go of all Google’s project managers. The project managers were responsible for heading various engineering groups, giving them deadlines and directing their activities, and reporting to the CEO, Larry, and other senior executive of Google. So the project managers were like the go-between the higher echelon and the foot soldiers. Larry felt the project managers role was not necessary, and he hated the fact that non-engineers were heading Google’s engineers. In place of the project managers, Larry plan to institute a VP Engineering position. All Google’s engineers were to report to the VP Engineering who would then report to him.

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Virtually everyone in the top echelon of Google disagreed with Larry’s restructuring, but he adamantly stuck to his guns. He even listed his management tenets;

  • Don’t delegate: Do everything you can yourself to make things go faster.
  • Don’t get in the way if you’re not adding value. Let the people actually doing the work talk to each other while you go do something else.
  • Don’t be a bureaucrat.
  • Ideas are more important than age. Just because someone is junior doesn’t mean they don’t deserve respect and cooperation.
  • The worst thing you can do is stop someone from doing something by saying, “No. Period.” If you say no, you have to help them find a better way to get it done

In 2001, Google received venture capitalist fund from Kleiner Perkins Caufield & Byers and Sequoia Capital amounting to $25 million. There was however a clause to the fund; Larry Page would have to step aside as CEO and hire someone who had more experience in managing a world class company to take the position. After an initial hesitation, Larry finally agreed to step aside and Eric Schmidt (who was the chairman of Google) became the new CEO.

Eric stayed as CEO of Google for a decade and during this time the company experienced tremendous growth, but those ten years were the darkest for Larry.

On August 20, 2004 Google went public making Larry and Sergey billionaires and also enriched many Google employees. Although Eric was the CEO he hardly carried out a decision without first consulting Larry and Sergey. Without the approval of the duo, Eric hardly did anything. When Eric held meetings with his Operating Committee the boys would show up but would have their laptops opened in front of them, concentrating on the screen and not saying a word until Eric called their attention to something. Larry, in particular, would contribute nonchalantly when called upon, and would return to his laptop.

In 2005, Larry acquired Android for $50 million. The acquisition was made without the knowledge or approval of Eric Schmidt. When Eric learnt of it he chose to ignore it; the amount of money involved was too negligible for it to cause an issue. Larry’s ambition was to place handhold computers in the hands or pockets of everyone in the world so they can be access Google at anytime or anyplace. As Larry became more and more comfortable with the way Eric ran the Google, he spent lesser time at the company and more time with Andy Rubin, Android co-founder and CEO.  Larry set up Android as a separate entity from Google and gave Andy adequate room to properly run the company without interference.

2005 was also a very successful year in the reign of Eric Schmidt, Google Maps, Blogger Mobile, Google Reader, and iGoogle were released that year. The following year, 2006, Google acquired YouTube, the most popular website for user-submitted videos for a whopping $1.65 billion in stock.

In September 2008, T-Mobile launched G1, the first phone that ran on the Android OS. The Android Operating System was free for phone manufacturers to install, hence its proliferation spread like wildfire. The iPhone OS was the market’s big dog as at the time. In the second quarter of 2009, phones running on the Android OS accounted for 1.8% of all sales. In the same quarter of 2010 the number jumped to 17.2% of the market sales, topping iPhone for the first time. Since then, the number has kept growing like a wayward Cancer. Currently, Android is the most popular mobile operating system in the world.

The success at Android emboldened Larry to think he was matured enough to once again reclaim the title of CEO of Google. From his period in isolation and his success at Android he realized one of his major issues was that he was bad at delegating and could not properly trust people. He had experienced what it felt like to delegate and trust appropriately with Android and he saw the result.

This was not the only reason Larry felt compelled to reclaim the headship of the company he co-founded. In 2010, Google had become a massive company with 24,000 employees and a market capitalization of $180 billion. Majority of its revenue came from ads. On the surface Google was doing tremendously well, but down below it was facing what is termed as ‘big company problems’. Project groups that were usually limited to 10 or so engineers now had 20-30, this allowed so many engineers to just lay around not doing anything. And when someone eventually thinks up a great idea, it is difficult to get the attention of those that matter; they were not having any impact as they once did. Engineers were encouraged to work towards building improvements to existing Google products and to work less on creating new ones. Redundancy was at its peak.

Facebook also rose during this period, becoming the cool mega power in Silicon Valley; 142 of Facebook’s 1,700 employees were from Google.

Above all these, Larry felt Google was just not doing enough. The money was available, yes; they were the biggest search engine in the world, yes; but then what? Was that all they could do?

During Google’s earning calls on January 20, 2011, Eric announced that he was stepping down as CEO; the position was once again for Larry.

 Larry took the reins at Google with the fast moving determination of someone who was on a mission. He wanted to replicate the success at Android so he put a CEO-like manager at the top of the company’s most important product divisions, and then went ahead to respond to Facebook’s threat by creating Google’s own social network Google+.

In 2012, Larry acquired Motorola for $12.5 billion. That same year Google also began installing fiber optics internet cables in Kansas City, providing anyone in the city with internet that was 100x faster than BroadBand. Soon he began to spread the innovation to other cities under the division Google Fiber Inc.

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Google also went into hardware, developing the Chromebook; a computer that ran on Google Operating System and a web enabled eyeglass called Google Glass.

Larry’s managerial approach changed tremendously since he returned as CEO, he encouraged cordiality between his product managers and other high ranking officials and he encouraged them to work on new products, and create new markets and solve problems in as yet unimagined ways. Ninety percent of Google’s revenue comes from advertising. Google’s revenue is bigger than all the money marketers spend on newspaper and magazine ads combined. But still Larry wants to come up with another great business like Google Search.

And for that, Larry has acquired or started several divisions in different fields of life. Google Calico is a Google division that is charged with finding solutions to the problem of aging and death.

Google Robots is working on building humanoid robots that Larry believes can make our lives easier by helping the elderly or loading our self-driving Google cars with groceries while we are busy with other stuffs at work.

Just like Steve Jobs warned, investors are worried that Google may spread itself too thin by working on some many different divisions and products at the same time. But Larry does not think so, his rationale is that it is more easier to work on challenging task than mundane ones. Also, challenging projects tends to attract the most talented people, hence Google would never be devoid of the best engineers. Finally he believes that these divisions are not as unrelated as people think, but can all work in sync to make life as a whole much better. He hopes that in the next 50 years or so, Google’s software would be knowledgeable about what people want before the person voices it.

“So in Page’s vision, if you walk into your house and feel cold, your Google-powered wristwatch will be performing a search to understand that feeling. The search result will be for your Google-powered thermostat to turn up the heat.

Likewise, if you run out of milk and your Google-powered fridge notifies your Google-powered self-driving car to go collect some more from the Google-powered robots at the local grocery warehouse (no doubt paying with your Google wallet), it will all be a function of search.” Business Insider

Larry aims to one day create a pervasively connected artificial intelligence that can sync all of Google’s products and make our lives much more pleasurable.

On August 10, 2015, Larry announced that Google and its other divisions were being restructured under the umbrella of a new parent company called Alphabet Inc. Larry would  serve as the CEO and Sergey the President.

Larry described the planned holding company as follows; “Alphabet is mostly a collection of companies. The largest of which, of course, is Google. This newer Google is a bit slimmed down, with the companies that are pretty far afield of our main internet products contained in Alphabet instead. […] Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related.”

The motivation according to Larry for the reorganization was to make Google “cleaner and more accountable”

The philanthropic arm of Google, Google.org was formed in 2004 with a start up fund of $1 billion. The mission of the organization is to create awareness climate change, global public health and global poverty.

Larry Page is married to Lucinda Southwort and they have two children, his net worth as at Feb, 2015 was $40.1 billion. Sergey Brin married and divorced Anne Wojcicki, his net worth is $39.2 billion.

Google search is the most used search engine on the World Wide Web with more than three billion searches each day. Google is the second most valuable company in the world with a valuation of $527 billion.


The need to back away:

If you are a regular chess player or any other intellectually demanding game, you would notice that many times, people who are observing or watching the game tend to see opportunities and moves that the player should have made but never saw. The moves are so plain, so clear to the onlookers, but they are completely clouded to the player. Perhaps it is because of the anxiety of the game or due to the player’s mind thinking of so many different moves he easily misses the most obvious and beneficial.

Many times while I play I have often, although very difficult, distant myself from being the player. I try to look at the game from the perspective of an onlooker rather than from that of a player. Many times I see things I otherwise would not have seen sitting down on that driver’s seat.

When Larry was asked to step aside from the CEO position of Google, the company he had built, he hated the idea, he fought it with all he had. But in the end it was for the best. He needed to stop being a player and be an onlooker, if not, he would not have recognized the ‘big company’ problems that Google was facing, he would not have been forced to ask, “After Search, then what?” He would not have recognized that Google had so much capacity to do more than it was doing at that time.

By all standards Google was doing tremendously well in 2010, they were raking in billions in revenue and their market capitalization was amazing, but there was a redundancy and a staleness that could threaten the future of the business. Eric Schmidt knew there was something  wrong but he just could not pinpoint exactly what it was. It took an onlooker to figure out the right move to make at such turn of the business history.

There is often the need for us to back away from something in order to see more clearly, our interest in a venture must be brought low in order for our objectivity to rise up. (It is just like what fasting does to the physical and spiritual body.) That is what makes consultants so good at what they do. That is what makes doctors and surgeons so good at what they do.  (vested interest which birth a lack of objectivity is why doctors/surgeons aren’t advised to treat immediate family members).

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