Eric Schmidt of Google won over the crowd at the NVCA (National Venture Capital Association) 2006 Annual Meeting with his first comment onstage: "Everything that has happened in my career, has happened because of venture capital."
Schmidt believes that Google is the first systematic innovator in
its space. As he tells it, Google was the last of the significant
search engines to enter the market, and now it's the largest. In order
to stay the largest, Google must challenge its original assumptions
about complexity. Schmidt wants Google to become "as ubiquitous as
brushing your teeth." As consumers demand "what I want, when I want
it," microseconds start to matter. And no matter what you are doing,
Schmidt wants Google to be there.
(Scared?)
There are three times the number of mobile phones as there are computers, so the phone should be a bigger developer platform than PCs or Macs. Schmidt posited that very few companies are prepared for this next wave. At the same time, in these network businesses, the race is for the entire market. As a result, he's watching for several businesses with the scale and success of Google.
As mobile phones become the dominant consumer device, then it makes sense for there to be more searches on phones than there are on PCs. Schmidt sees the paradigm shifting from browsing to finding. On a phone, Google tries to figure out what you are looking for and then give you that answer. The notion of a search engine that knows who you are, where you are, and what you want at any given time is possible, and Google wants to provide it. (Even if I'm still brushing my teeth.)
Schmidt defends the role of portals in a networked world. He assumes that portals are defined as paths to information, rather than aggregators of information. Using a portal used to mean getting to information more quickly, but it's now starting to mean having access to more relevant information.
When talking about mashups, Schmidt described how Google can mine web information, and then tag it using Google Maps information. As he puts it, "the point is to get the users to do the work. The first principle about the user is that they have a lot of free time; from a VC perspective, they have an infinite amount of free time."
User-generated content communities behave very differently from other communities. Schmidt used the label "disinhibition," and describes it as what the world would look like if we all lived on Jerry Springer. In many online communities, people disregard traditional social constructs of what to say and what not to say. The new online community is built upon how teens interact (fewer social guidelines), rather than how adults interact (with an interface of social mores). Schmidt thinks that we should be debating this as a society.
What sort of changes should we expect in the world, given all of the information that is being assembled online? Will the expert become someone who can learn information quickly, rather than someone who already learned information? Can we detect emerging pandemics, based upon what people are doing online?Will revolutionaries need a Radio Free Internet?
If Schmidt were a venture capitalist, he would invest in these areas:
- Auto-generation of sales leads, or other business repositories
- Search that tells you what you should be asking about/what you should know
- Infinite memories of all the experiences of our lives
- Using mobile phones as banks
- Automatically tagging photos with the location the phone was in when the photo was taken
- Phones that suggest what you should be saying in a conversation
- RFIDs tied to large databases
- Probability that information you read or hear is truthful
Google looks for big, unmet problems in the world that respond to scale. Schmidt doesn't worry about competitive issues in the midpoint of the Internet, and doesn't need to be providing wireless. He worries about places like Africa, where fiberoptic cables weren't run, and about issues such as net neutrality. For Schmidt, anything that can be done to increase penetration - wireless, last mile, whatever - will help these issues. Oddly enough, this maps pretty well to Google's interest in the monetization of traffic once people get online.
My favorite quote from Schmidt came up in the Q&A, when he was asked why Google doesn't make large acquisitions. Quite simply, the answer is that Google doesn't believe that large acquisitions work well. Combined with the kooky Google culture, Schmidt thinks that "it's much better to bring them (acquired people] in in groups of 10 and seriously Googlize them." Free food, massages, and other forms of cultural assimilation are more impactful upon small groups.
Tags: christine herron christine.net space jockeys google eric schmidt nvca venture capital vc technology
