THE STATE OF GOOGLE: I’m sure you’re all familiar with Google’s
Moonshot factory.
It’s the home of Google’s most ambitious projects form Google Glass and Waymo to Loon
and Verily.
Even before the moonshot factory was formally founded in 2010, Google was at the forefront
of technological development and advancement.
But, it appears that this has been changing over the past couple of years.
Like any corporation, Google has become more focused on profits and pleasing shareholders
than making massive bets.
We no longer see those over the top presentations from Sergey Brin and Larry Page.
Nor do we hear about Google making much tangible progress with self driving.
This trend has simply been exacerbated by the recession.
In September, Google cancelled up to half of their R&D projects across the company.
And more recently, it was reported that Google is diverting much of its moonshot factory
efforts into revenue generating projects.
This trend doesn’t just apply to Google’s Moonshot factory either.
It’s actually a larger trend that can be observed across the company.
Many Google veterans have raised concerns that Google’s culture has become unrecognizable.
And the recent layoffs are just one example of that.
The old Google would have done anything to prevent layoffs similar to Southwest.
If you didn’t know, Southwest has never done layoffs despite facing way more tumultuous
times than Google from the 1973 oil crisis and 2001 to 2008 and the pandemic.
Meanwhile, Google is posting near record profits and chose to layoff 12,000 people mostly due
to shareholder concerns.
But likely the best example of Google turning the corner is the fact that they dropped their
famous slogan “Don’t Be Evil”.
In 2015, Google added a new motto to their code of conduct “Do the right thing” before
dropping the original slogan in 2018.
This massive shift didn’t just happen over night though.
So, here’s the slow devolution of Google from being the ambitious startup that was
at the forefront of tech to being the background company that just wants to stay in their lane.
COMPLACENT EMPLOYEES: When you think about a career at Google, one
of the first things that come to mind are the high compensation, prestige, and influence.
For decades, Google has prided themselves with paying the absolute highest salaries
and from a statistical standpoint, this is still very much true.
In 2021, Alphabet once again topped the median employee salary list coming in with a median
compensation of $295,000.
Combine this with the insane perks that Google offers like their free food and remote working
opportunities, and you would think that Google employees are living the high life and objectively
speaking they are.
But, happiness is very much a relative thing, and for people working at Google, all of these
perks are very much the norm.
Not to mention, Google isn’t the only company where they can enjoy these benefits.
Until recently, the number of options that these people had was unprecedented leading
them to feel unsatisfied and yes undercompensated.
I know that’s probably hard to believe, so I’ve got survey results to back this
up.
Back in early 2022, Business Insider found that only a mere 46% of surveyed Google employees
were happy with their compensation.
In other words, over half of Google’s workforce thinks that their compensation isn’t competitive.
And this feeling is simply getting stronger every year.
Back in 2020, 64% of Google’s employees felt that their compensation was competitive.
This number dropped to 56% in 2021 before dropping to 46%.
Much of these can be explained by even stronger offers coming from startups like Coinbase
and Stripe.
But, it’s not just the compensation that Googlers are upset with either.
Many also feel that the company is becoming more bureaucratic and less transparent.
Within the cloud division, for example, only 54% of employees feel that the promotional
process is fair.
You can decipher this in two ways.
Either, you can think that these guys are simply spoiled brats who don’t realize how
good they have it.
Or, you can think that these truly guys truly do have a lot more potential like become a
founder or an executive.
Either way though, the end feeling is the same: unhappy and unmotivated employees.
And this feeling only leads to two things: high attrition and/or a stagnant workforce.
The high attrition is no secret.
At Alphabet, the median tenure is only a mere 1.3 years.
This statistic is skewed by new hires, but that doesn’t really make the statistic all
that much better.
Speaking of new hires, Google has been aggressively recruiting and growing their workforce over
the past 10 years.
Between 2009 and 2021, Google’s workforce grew from 20,000 employees to 156,000 employees.
And realistically speaking, it’s significantly harder to maintain the same culture and caliber
across 156,000 people than it is to maintain it across 20,000 people.
It’s more than likely that a substantial portion of these new hires were simply looking
for the compensation and resume boost.
And when you have too many of these people, it’s just a matter of time until your company
becomes soulless.
COMPLACENT EXECUTIVES: It’s common for founders to have a bunch
of beef with shareholders.
Mark Zuckerburg, for example, is actively fighting the entire world when it comes to
pursuing the Metaverse.
This was very much the same case with Google’s founders: Larry Page & Sergey Brin.
And this strife between investors and executives is very much what gave Google it’s unique
culture.
In 2001, for example, Larry Page went ahead and fired all of Google’s project managers.
The reasoning?
Well, Page felt that engineers didn’t need anyone to give them directions and that they
shouldn’t be forced to follow arbitrary deadlines.
HR did end up reversing this decision, but this gives us a glimpse of just how Page felt
about managers and why Google ended up being such an engineering driven company.
Similarly, Sergey felt that no one should be 200 feet away from food.
And this is why Google has so much food everywhere despite it being rather uneconmical.
Many of Google’s most iconic moves were such unorthodox rebellious actions.
Both Page and Brin had a history of completing acquisitions without consulting with anyone
else in the company including even the official CEO.
This was the case with even Android and Google Earth.
We should also note that this approach led to a bunch of failures like Google Glass,
but the takeaway isn’t that the founders were rebellious.
The takeaway is that the founders didn’t care about bureaucracy or angry shareholders,
and that their main goal was simply doing the best thing for the company.
This is actually the main reason that both founders actually left Google.
They felt that they could no longer do what was right for the company and that there was
simply too much red tape to keep fighting.
Conversely, Google’s new leadership isn’t put off by the red tape.
In fact, you could even argue that they like the red tape as it gives them purpose, definition,
and meaning.
Their jobs as executives is to make shareholders happy and to constantly grow earnings quarter
after quarter.
And from this perspective, Sundar Pichai has hit it out of the park.
Since he became CEO in 2015, Google stock has grown as much as 5X.
And even with the recession, Google is up 4X.
A similar story can be seen with Google’s fundamentals as well.
Since 2015, Google’s revenue has grown from $70 billion to $280 billion and their net
income has grown from $15 billion to over $70 billion.
So, clearly, Sundar has given shareholders exactly what they wanted, but this very much
came with a cost.
To accomplish such growth, Google couldn’t focus on random out there projects that were
very much a gamble.
Instead, Google had to double down on their revenue generating sectors such as ads and
the cloud and focus on making these endeavors as profitable as possible.
And that’s exactly what they did.
They cut out all the fluff.
But, while this seemed like fluff for shareholders, this was what made Google Google.
And without it, Google became just another soulless tech corporation.
PUBLIC SENTIMENT: While much of the new Google has to do with
a shift in leadership and employee culture, not all of it can be attributed to Google
themselves.
Much of the old Google was formed by public sentiment and much of the new Google is also
formed by public sentiment.
In fact, you could argue that Google’s public sentiment was what made them so successful
in the first place.
Take Gmail for example.
Much of Gmail’s appeal came from the fact that it was exclusive, had generous storage,
and was anti Yahoo and Microsoft.
The same thing could be said about Chrome.
Much of Chrome’s appeal came from the fact that it was fast, reliable, and anti Internet
Explorer and Microsoft.
Google had built this image as the white knight savior tech company that wasn’t evil.
But, the sentiment around Google has shifted substantially over the past 15 years.
Google is no longer the startup taking on the big players.
Google is the big player.
Not to mention, Google has also built up a rather negative reputation when it comes to
data collection and privacy.
We’ve all seen those memes that Alexa, Google, and Siri are always listening.
This sentiment hurts the company in two ways.
For one, the public is less likely to support new products that come from the company.
A great example of this is with Google Fi, their cell phone plan.
Objectively speaking, Google Fi offers extremely generous plans that come in way cheaper than
the competition.
This is the same formula that Google used with Gmail and Google Fiber to great success.
But, most people don’t even know about Google Fi because the cellular space already had
an anti carrier player: T-Mobile.
If anything, Google was viewed more like AT&T or Verizon than they were as T-Mobile.
And this makes sense because Google was essentially trying to control you smartphone, your OS,
the things that you do on your phone, and your connection.
And if the public isn’t willing to support a cell phone plan, it’s much less likely
that they’ll support something that’s truly out there.
I mean just take a look at Facebook.
Sure, the Metaverse is underwhelming, but I’d bet that much of its criticism comes
from people’s already negative opinion of Facebook.
The Metaverse wouldn’t be nearly as ridiculed if it wasn’t associated with Facebook and
Mark Zuckerberg.
For obvious reasons, Google doesn’t want to go down the same path, so they’ve decided
to simply play it on the safe side.
Aside from the public not be receptive to new products, a negative stigma also makes
it much more difficult to attract the best talent.
Google is not the top company that engineering students want to work for.
The top companies that engineering students want to work for are SpaceX and Tesla, and
those companies don’t even pay crazy salaries or offer ridiculous perks.
As more and more talented engineers flock to such companies and startups, it’s no
wonder why Google is no longer pushing the boundaries.
THE FUTURE OF GOOGLE: In the end, Google was iconic for setting
outrageous goals and going all in regardless of how ridiculous it makes them look or the
odds of success.
But eversince Larry and Sergey left, Google has become much more tame mostly due to complacent
employees, a priority to please shareholders, and a rapidly deteriorating public image.
Given that Google’s revenue and net income was growing faster than they can count for
the past several years, Google didn’t have any problems keeping some out there projects
alive.
But, now that Google can feel the pressure on their bottom line, Google is shifting to
take decisive action.
This isn’t to say that Google will be screwed or that this move will backfire.
In fact, I’m sure that this move will work out great financially.
But, at the same time, this is just another example of Google taking another step closer
to becoming a Cisco or an Intel, and that’s truly quite a shame.
Are you a fan of the New Google?
Comment that down below.
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