Starting a Technology Company: What We Can Learn from Google

With Google’s stock down around 30 points yesterday (almost 10%) after announcing quarterly earnings, this seems like an appropriate time to discuss what we can learn from Google about starting a technology company.

After listening to The Google Story on audiobook last week (which I highly recommend) I was struck by three core principles that had a significant impact on Google’s success and their ability to call the shots when dealing with venture capitalists, investment bankers, and other business-people who have a reputation for taking advantage of small tech companies. These principles apply the most in the early phase of a startup when you’re dealing with angels and venture capitalists and working 14+ hour days out of a garage.

They are:

  1. Have a Partner. Time and time again the two founders, Larry Page and Sergey Brin, were able to confide in one another, argue with one another, and back the other up when making tough decisions. The duo, like Hewlett & Packard, Jobs & Wozniak, Gates and Balmer, left the comfort of their university lifestyle for a chance to change the world with their technology. Along the way they snubbed venture capitalists who weren’t willing to work within Google’s terms, and defied investment bankers with their Dutch auction IPO. Each of these decisions was that much easier because they had the other to rely on.
  2. Have a Vision. From the earliest days of Google, as they worked in a Stanford computer science lab, they had a vision. Their primary focus was not to build a search engine, but to organize the mountains of data generated by the internet; it just so happened that the easiest way to do that was with a search engine. And, for the most part, they’ve strictly adhered to their vision of organizing the world’s information. From their search engine to Google News to Google Library to Gmail, their services are aimed at taking mountains of data and making them usable for everyone. This vision has kept them focused on providing real services that people need, even when it didn’t make them a cent.
  3. Have a Unique Technology. This is easier said than done, but it’s the most important of the three. Their unique search technology was the defining attribute of Google, and it’s what set them apart from other startups of the day such as Pets.com and Kozmo. They consistently used their search technology as a bargaining chip with investors, venture capitalist, and other business-types who almost always have the upper hand when dealing with needy companies. As with companies like Netscape, who also called their shots with venture capitalists, having a difficult-to-copy, proprietary technology puts you in the driver’s seat.

If you’re interested in Google I encourage you to check out The Google Story.

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1 comment so far ↓

#1 Adnan Masood on 02.05.06 at 3:02 am

Thanks for recommending it to me Rob, it’s an excellent book. Although Most of the events discussed in are already known by those who normally follow tech news, it’s still impressive to read them like events in a story. Author did an impressive job putting together the chronology of Larry Page and Sergey Brin’s efforts and their ‘healthy disregard for impossible”; It’s a must read in my recommendations list.