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Chaos as business plan

Kai Ryssdal Sep 26, 2006

KAI RYSSDAL: Sure, Google’s got a plan to cut down on the power used by computers. But the company expends an awful lot of human energy on products that don’t really go very far. Sure, there’s Google Maps. They’re pretty nice. And g-mail, though that hasn’t really taken off. But what about something like Froogle? In case you’ve forgotten, it’s a comparison shopping site. Have you Froogled lately?

And there’s always Orkut, a social networking site. Sadly for the accountants at the home office it’s mostly popular with teenagers in Brazil. It all sounds kind of random. Chaotic. But it’s all part of Google’s master plan. Adam Lashinsky wrote the cover story for the latest issue of Fortune magazine.

ADAM LASHINSKY: Yeah, you’ve gotta remember, this is a company that was started by two, 20-something-year-olds and from the beginning the Google cofounders nurtured a culture of both innovation on the one hand and chaos on the other hand. They were just gonna hang loose and play volleyball and go rollerblading and have massages on campus and make nifty stuff up. Well, that was tremendous once. But it isn’t necessarily a proven way to build a business.

RYSSDAL: Seems to me what they have, actually, is very narrowly controlled chaos, which if you think about it is no way to run a billion-dollar business.

LASHINSKY: Well, narrowly controlled chaos — or managed chaos, which is what they call it — is exactly what they are trying to do. They want to encourage zaniness. On the other hand, they want to figure out a way to control the zaniness. It’s a radical concept. It’s something everybody would like to do. You know, it’s like work-life balance in our personal lives and careers. That’s what they’re trying to do in the shell of a $125 billion market-value company.

RYSSDAL: Alright, that’s great. They’ve got this culture where anything goes and you can learn from your mistakes. Do you ever get fired, though, from Google? I mean, I’ve never heard of anybody losing their job there.

LASHINSKY: In fact, one of Google’s most senior executives Sheryl Sanberg, who’s a vice president and runs all of the automated advertising systems that Google has, told me about a multimillion-dollar mistake that she made. And when she realized her mistake she walked across the street at the Googleplex in Mountain View and she told cofounder Larry Page about it. What was interesting was his reaction. He said, “Yeah, we shouldn’t have done that. We’ll know better next time. But, oh, by the way, it’s good that you made this mistake. I’m glad,” he told her, “because we need to be the kind of company that is willing to make mistakes. Because if we’re not making mistakes, then we’re not taking risks. And if we’re not taking risks, we won’t get to the next level.”

RYSSDAL: You think about that for a second. I mean, if you and I made a million-dollar mistake, even a $100,000 mistake, we’d be gone.

LASHINSKY: Right, but this is a company that makes so much money, first of all, that it can afford it. And second of all, it’s gotten so big that without swinging for the fences, Google’s just not going to be able to continue its growth rate. So, it needs to try things that, you know, go beyond the conventional. And when you go beyond the conventional, you’re going to screw up.

RYSSDAL: You know they’ve tried ever since they’ve been around to sort of break the mold and do things differently. You think back to their IPO and the Dutch Auction. You think back to that letter they wrote about “Don’t be evil.” Have they become a little bit, sort of, too not the same for their own good? You know what I mean?

LASHINSKY: You see as time goes out from the IPO — and it’s been a little over two years now — that everyday Google becomes more and more like a real company. They need to communicate better with Wall Street and they’re trying. They need to cut back on interviewing people 18 times, and they’re trying to make it more like six interviews instead. So, inevitably, everyday they become a little more normal — as, by the way, Kai, Silicon Valley with every passing year becomes a little bit more like the business community everywhere else in the country. But the founders’ letter was something of a manifesto to Google, so no matter what happens they really do keep talking about it, and they keep coming back to it, and they tell themselves and they tell outsiders: “Hey, remember, we said we were going to be different. Let’s keep trying to be different.

RYSSDAL: Alright, Adam Lashinsky from Fortune Magazine. Thanks, Adam.

LASHINSKY: Thank you, Kai. It’s a pleasure.

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