Susan Wojcicki on the Secrets of Google's Success

There was a brief glimpse into Google's early days at the First Annual Women's Angel Colloquium in San Francisco, hosted by the Women's Technology Cluster. Susan Wojcicki, the VP of Product Management from Google, shared lessons learned, along with the odd idiosyncracy:

Wojcicki laughed about having to grab Larry Page and Sergey Brin in order to remember what Google was like seven years ago. After sharing the common Google mythology, she then spilled a few less-known-but-more-amusing snippets. Apparently, the company was originally called BackRub (since they were tracking backlinks), and the original logo is just as tacky as you would think. And when the original groaning table of servers became inadequate, so the guys maxed out their credit cards buying a terabyte of storage. (Remember when buying a terabyte was that expensive?) And when that ran out, they began "borrowing" equipment from the Stanford loading docks. (And though Wojcicki didn't say it, I presume that all the gear was dutifully returned!)

Given the pressing need for cash, Brin and Page went to Professor David Cheriton for help with cash. Cheriton passed the pair on to Andy Bechtolstein, and though Bechtolstein came in for a demo, he ran out of time and simply wrote out a check for a $100,000 loan. (Note that this snippet prompted a lot of protest from the folks who had just been through a boot camp on due diligence processes.)

At this point in Google's development, Inktomi was launched, Brin and Page were considered kids, and it was common knowledge was that there wasn't any money in search. On the plus side, the product worked impressively and traffic was growing exponentially. And as Wojcicki noted, though the founders didn't know a lot about marketing and advertising, they did know how to build a product that customers would use. They also realized that if they could act as the gateway to a growing web, they'd be well-positioned.

This is when Wojcicki came into the picture: when the founders needed office space in 1998, they frugally moved into Wojcicki's garage. Since they weren't allowed to go through her front door - and neither were Google's visitors - everyone had to tromp around the side yard. Wojcicki, who was working for Intel during this period, didn't go to work for Google until the guys had moved out of her garage.

Per Wojcicki, here's what Google did well:

• Focused on a product designed for real users
• Set a strong vision about information access
• Took hiring very seriously; lots of energy into trying to hire the right people. Most of the early hires are now VPs of major areas (of the first 35, 6 are VPs)
• Performed scientific-level analysis of what worked

What Google didn't have right, however, was how to make money. The first challenge was figuring it out, and they originally thought that 1/3 of revenue would come from each of site search, licensing, and advertising. Wojcicki admitted that this was basically a guess, and they learned from doing. Site search represents none of their revenue today, and Google only did one major deal here. They did close a few licenses, but then figured out that portals would make vastly more money than Google would, since the portals sold the ads. Instead, it's turned out that 99% of Google's revenue comes from advertising.

As a company of 35 people with one sales person, it was seen as insanity for Google to compete with larger companies, and to build their own ad engine. Wojcicki revealed that Google's first ads didn't work...no one clicked on them. This path goes back to the corporate philosophy of doing the right thing for the long term.

Though Google turned down a lot of big deals, it took on Netscape. And when they first turned on Netscape, they didn't have enough servers for both Google.com and Netscape, so they turned off Google.com. (Talk about customer service!) Even at that, the company was being creative with use cheap machines. Wojcicki talked about bungee cords for earthquake-proofing, velcro for attaching machines to the wall, etc. Anything that you could do to save money was done.

Another big problem that Wojcicki had to tackle: How do you market with no budget? Altavista was spending $120 million on marketing at the time. It would have been accepted for Google to spend $10 million on an ad campaign (half of their budget), but they ended up spending nothing instead and using the money on operations. There simply weren't any stats to prove that an ad campaign would have been helpful. Instead, Google offered free search to universities, invested in PR, and tried other guerrilla tactics that were far cheaper than a major media campaign.

Wojcicki believes that Google's secrets to success include:

• Encouraging engineers to spend 20% of their time on creative projects, which has resulted in big successes like Google News, but also means that you have to be comfortable with chaos. (Note that Google didn't do this when they were small.)
• Spending budget on exploration. Again, though they didn't do this early in the company's life, Google spending is now 70% on core products, 20% on related products, and 10% on research.
• Flat organizational structure. At one time, the VP of Engineering had 150 direct reports - and though they've backed down from this crazy peak, Google is still relatively flat.

Google took a series of small steps, each of which seemed pretty hard at the time. Over time, things did get easier and easier. Wojcicki's lessons learned:

1. Build a great product that users love
2. Think big
3. Solve an important problem
4. Rally the company around a vision, and be focused on doing one thing well (and this is easier for small companies)
5. Hire the best people you can
6. Question accepted practices, and invent the right ones for you; try new things quickly and learn from the results
7. Base decisions on data, and wait for the information you need to do the right thing
8. Make decisions for the long term

Wojcicki believes that the Google IPO didn't change the culture of the company. Many staff at that time had been through the experience before, so there was very little stock-price checking or flashy car shopping. Today, Google tries to support an entrepreneurial spirit with programs like the Founder Awards, which provide large stock grants to teams that make significant contributions.

Google also tries to go outside the bounds of the typical corporate environment. Google donates 1% of its profits to charitable causes, and Wojcicki affirms that Googlers feel good about participating in programs that give back to the community. This helps with recruiting and the brand, and it's important for them as a company. There's a lot of discussion around Google's "Do No Evil" mantra, and it's part of why Wojcicki thinks that Google is such a good place to be.

Tags: christine herron christine.net space jockeys women vc venture capital  angel best practices wtc google

Comments

[Peter Pan]

Came across your blog while doing some research on Google. You're the prettiest VC I know, boy if VCs looked like you I'd forever apply for funding! :o)

[Empire Internet]

Hello Friends!
I like your work , and because of that i write you.
Please help me!
One year ive been looking for a way to talk to Sergey Brin , but in there is no possibility of this to happen - not in the phone , not in the e-mail , not it the mail.Please! Google didnt help me!
Tell me , how to contact Sergey Brin?
Why does everybody who love Google and Internet and try to Introduce themselves to Sergey Brin , have to go through these bad moments?
Thank you!
From www.empireinternet.org
# Post

[Franz Hrazdira]

It's really great to be able to see a lot of first hand things online by Susan Wojciski and Jeff Huber. It gives Google as an organization and AdSense, as their special product areas a more personal touch.

But I am still trying to understand why AdSense would display such disregard for their clients need to know before closing their AdSense accounts so unexpectedly without providing a better mediation option.

Are some improvements already being considert?

[Christine]

Thanks!!

[Daniel Nerezov]

Christine, that's some great analysis! Awesome read. Thanks