Everyone uses Google but have you wondered how it came to be the tech giant it is today? More importantly, what lessons can an individual learn from a company’s success story? To know them, read this email!
Google was initially conceived as a Ph.D. project by two students from Stanford – Larry Page and Sergey Brin
They noticed that the other popular search engines at the time like Yahoo, Excite, and Altavista were giving irrelevant results and easily manipulated.
They came up with the idea that the ranking of a webpage in search should be determined by how many other pages on the internet linked to that page, thus proving that webpage’s credibility and authority.
On top of that, the pages linking to that webpage should themselves have high authority and legitimacy. This algorithm was the basis of how the search engine would work.
They patented their concept and called it PageRank.
As Page and Brin were more of scientists rather than businessmen, they decided that they wanted to sell their patent to Excite. They offered to sell it for a million dollars. The CEO refused. They then decided to reduce the amount but he refused again.
With no other option, they decided to pursue it themselves as a business and registered the domain Google.com
Around that time, they met an investor from Sun Microsystems who liked the idea and gave them 100,000 dollars as an initial investment.
The company hired its first few employees and started gaining popularity.
After this, other investors started putting money into it. Eventually, the investment they got exceeded 1 million dollars, the amount they were earlier willing to sell it for!
But while Google was rapidly gaining popularity, its main problem was that it did not know how to make money. So eventually, the founders again decided that it was probably best to sell the company.
They decided to offer to sell it to Yahoo for One Billion Dollars. Yahoo refused!
To add to it, around that time, the stock market crashed and investors were no longer funding companies with no path to profitability. Google itself was not even making any sales, forget about profit!
It was then that they came up with the idea of Google AdWords – which would get advertisers to place text-based ads above search results.
AdWords was a game changer! There were hundreds of millions of searches being conducted on Google even in the early 2000’s and placing ads on even a percentage of those began making a lot of money!
Not only that, but because they were a tech company, they did not have a huge overhead and much of what they made was pure profit!
Google continued to gain more and more popularity and started to have billions of searches conducted daily. As a result, their revenue and their profits both grew massively.
In 2004, they got themselves listed on the Stock Market and over the years became one of the biggest tech giants!
As of 2021, under the new parent company Alphabet Inc, which their founders created, Google has gone on to have a market cap of almost 2 Trillion Dollars! This is a company that just started around 20 years ago!
So, what have been the three main reasons behind Google’s Success?
The first reason has been constantly focusing on Innovation That Delivers Value.
By coming out with an innovative Search Engine that was vastly better than its competitors, Google became greatly popular and used that popularity to drive its profits.
But, it didn’t stop there. It encouraged employees to come out with innovative products themselves! It encouraged people to spend 20 percent of their time on creating innovative projects that could potentially become future Google Products. Revolutionary services like Google Maps and Gmail have been the results of the very same practice!
Second, it only competed in the long term in areas where it could be number 1 or Number 2. While it came out with several products, not all of them were successful. Google knew that not only was it important to make a profit from products, it was also important to discontinue those that had no future. By investing more in its winners and getting rid of its losers relatively quickly, it won big!
Finally, it learned from the mistakes of its competitors. When Google was offered for 1 Billion dollars, Yahoo refused and Google went on to become worth a lot more!
Google itself learned a huge lesson from this. In 2006, when it had become a big company, it was presented with a similar opportunity.
A new company that was extremely popular with users but was constantly making losses had offered itself for sale. Unlike Yahoo, Google recognized the massive potential of this loss-making company when combined with AdWords. Determined not to repeat Yahoo’s mistakes, they purchased this company for 1.65 Billion dollars!
That loss-making company was YOUTUBE which now makes billions every year for Google!
Yahoo itself made one bad decision after another and was eventually sold for a very low price.
On the other hand, Google went on to create immense wealth for its founders and shareholders also became one of the biggest technology companies on the planet!
Not everyone can be Google, but if there are three main lessons we can learn from their story, they are:
1) Constant innovation that delivers value is at the core of success for any person/company.
2) Compete at what you are good at and what is making you win. If it is making you lose and it is not your strength, it is better to divert your resources to what helps you win.
3) It is good to learn from your mistakes but it is even better to learn from others’ mistakes as life is too short always keep making your own mistakes!
Even as an individual, these three lessons can be very valuable to your life! So, implement them today and see your life change!