FROM GOOGLE TO ALPHABET, LARRY & SERGEY’S 3 PRINCIPLES OF SUSTAINED ENTREPRENEURSHIP
There was great astonishment in the tech world when Google recently announced the creation of Alphabet and the implied restructuring of the entire enterprise. Today Google added a new surprise in the form of a new logo. So far, it is not entirely clear which implications the change in strategy will have on Google’s future as one of the most innovative companies in the world. Even though Wall Street has already made up its mind and reacted in an approving manner, many people engaged in the tech and startup community will need time to build an opinion about that controversial action. While it seems strange that Larry Page and Sergey Brin kind of let go of their precious Google and left it for Sundar Pichai to run, there are 3 major lessons that especially entrepreneurs can learn from them.
It is important to point out the difference between entrepreneurs and business founders/owners. While business owners concentrate their efforts on keeping their businesses alive and profitable, entrepreneurs focus on how to make the biggest impact on society by their grand and uncommon ideas. There is nothing wrong of being the owner of a small business without dreaming of moonshots. In the contrary, focusing entirely on running the business will most of the time lead to more sustainable success of the business. Still, there are the ones among us that cannot settle without creating disruptive solutions of problems that people may not even be aware of. And usually, they will not even settle after succeeding once but they want to continue their internal drive of innovation. Larry Page and Sergey Brin can be called entrepreneurs without doubt. Learning from them and applying these takeaways can keep entrepreneurs in later-stage startups on their track of innovation:
Employ people that are better than you are
The key factor determining the future of Google’s future within Alphabet is the naming of Sundar Pichai as the new CEO. Over the recent years, Sundar has been gaining more and more responsibility for Google’s core products including Android, Chrome, Google Drive, Gmail and Google Maps and has proved his eligibility for the position of CEO. In fact, Google employees even mentioned that Sundar Pichai might be a better CEO than Larry Page in running the daily business of Google.
With Google’s experiments in Google [x], it has been clear that Larry Page did not focus his attention entirely on Google’s original business of digital advertising through the power of information anymore. Instead, he wanted to dive into areas that he considered as being able to improve the lives of as many people as possible. Managing the cash flow of the second most valuable company in the world only half-heartedly is not possible. Google’s core business needs someone who is good in dedicating all efforts into running it. This is not the first time that the founders of Google gave the title of CEO to someone else. In the past, Eric Schmidt was the one that built the foundations of Google’s success. Larry Page and Sergey Brin are great inventors, creators and entrepreneurs but not necessarily the best suitable candidates to run the company and hold discussions in meetings. For that, it was important in the past, as well as nowadays to find someone who is better in that area than they are.
What does this tell entrepreneurs about the people that are hired for their business? They should go and look for candidates that are better in doing what they are hired for than the entrepreneur herself. And it is always possible to find people who are better than oneself. If a technical or non-technical co-founder tries to employ new staff or executives finding people that are better in at least a few aspects will be essential for the success of the business. A CTO should hire a technical design thinker who is better in designing, developing and managing the product. A CMO should hire an IT-affine growth hacker that is able to plan and implement a marketing strategy that is beyond the skillset of the CMO. A CSO should hire a seasoned sales guru that scales sales incredibly faster and more way more efficiently than believed to be possible. And an entrepreneur should in time find a CEO that is better in running the business.
Leave running your business to your executives
The principle of gathering competent people that assist in complex management tasks is described by Napoleon Hill as creating a Mastermind Group. By doing so, the head of the company does not need to be good in all business areas but only needs to delegate the tasks to the best suitable partners. Running the business means spending more and more time managing human resources and cash flows instead of doing operational work. By finding people that the entrepreneur can entrust business areas to she can focus more on the task of allocating resources and juggling with people’s competences in order to create the maximum value for the company.
As an example, there will be the time when a technical co-founder will stop coding and leave the product building job to his new CTO so that there is more time for management work. This should not mean that having a technical co-founder is unimportant. In contrary, having one is considered by many Venture Capitalists to be one of the essential success criteria for an early-stage startup. The technical co-founder is needed to create the MVP which is necessary to attract the first customers. But then, most of the time, the initial product logic will be completely restructured as soon as the product team has gained a size big enough to focus on building a scalable product architecture. This can be a good timing for a technical co-founder to start internally mentoring a promising talent or externally hiring a renowned tech executive for her role. By spending less time on the operational product development, the technical co-founder can focus on specifying the product vision together with the management.
With the creation of Alphabet and the assignment of Sundar Pichai as Google’s CEO, Larry Page has found a way to withdraw from his task of running the day to day work of managing Google for the sake of focusing on new projects. The important point is the timing of this decision. First, Sundar Pichai has been gaining in responsibility and renown. Secondly, Google’s CFO Ruth Porat has cut down costs increasing Google’s financial strength and stability. And finally, it was time to respond to growing shareholder concerns about Google’s ongoing profitability considering the multiple loss-heavy new business areas including moonshots. Sundar and Ruth among other executives enabled the creation of Alphabet because they built the foundation of a solid and promising future for Google even without the work of Larry Page and Sergey Brin. At the same time, it was Larry’s trust in Sundar Pichai and the general public’s approval that made it possible. The timing for an entrepreneur’s possible withdrawal as the CEO can therefore be described as the moment when:
- The founder has fostered a new candidate for her position as the head of the business,
- The founder trusts the new CEO in running the business successfully with only limited further help and
- The shareholders believe in a sustainable profitable business that does not need the help of the founders anymore.
Keep on being entrepreneurial even after having success
Considering the right setting for Larry Page to pass on his role as Google’s CEO it is still quite surprising that Larry actually stepped down. Usually, most founders would be happy enough to have founded and run a multi-billion company. Then again, Larry Page and Sergey Brin are not usual. The final lesson from Google’s change to Alphabet is letting go of the own highly successful company in order to pursue personal dreams once again. By definition, an entrepreneur is not a one-time founder and steady business owner but someone who takes risks and continues her pursuit for an impact that matters again and again. This being said, what differs an entrepreneur from a Serial Entrepreneur? Nothing except for the boastfulness of its expression. An entrepreneur is someone who continues innovating. Entrepreneurs do not settle down but want to explore new areas and try themselves at new challenges. This does not necessarily mean founding multiple companies. An entrepreneurial mindset also expresses itself in R&D departments, in Venture Capital companies, in a Business Angel’s attempt to play a role in the creation of new startups and in all those ideas that are judged as stupid and impossible by the majority of society.
Self-driving cars? Balloon-distributed Internet? Drone-based delivery services? These ideas sound unbelievable and impossible by their nature. It is not proven though that they are in fact impossible. Many times, innovative inventions only succeeded after failing several times and being deemed stupid by the public. It is the strong will and the internal drive of entrepreneurs not to give up innovating that provides us with today’s life quality. Thank you Google for still going after these moonshots no matter what media, shareholders and internal managers might say. Thank you Larry Page and Sergey Brin for setting a sign that a real entrepreneur will go after her dreams even after successfully establishing a world brand and having the chance to settle down. This internal drive to do more than what is already done is what makes entrepreneurs inspiring others. Hopefully, future successful entrepreneurs with the capabilities to not only succeed once but again and again will take Google’s founders as an example and stay innovative until their endless ideas run out.
Originally posted on Startup Grind, the global startup community.
Ha is a graduate student focusing on Entrepreneurship. Learn more here.
