How Google Works – by Eric Schmidt and Jonathan Rosenberg
Date read: 3/11/18. Recommendation: 9/10.

Fascinating read and tremendous resource for anyone working in a startup and/or the tech industry. How Google Works offers an insightful look into all the elements that have contributed to Google's success in recent years, as well as the initiatives that have come up short. The core tenets of the book emphasize the importance of creating great products, attracting smart creatives, and cultivating an environment where you can succeed at scale. Many of these contradict the way massive corporations work–Google values user experience over revenue, transparency at all levels, less ego, more freedom, fewer meetings, and smaller teams, to name a few. As a side note, make sure you grab the latest edition of this book, as it contains an interesting addition that discusses how Alphabet (Google's parent company) works.

See my notes below or Amazon for details and reviews.

 

My Notes:

The core principle: The only way to succeed in business in the twenty-first century is to continually create great products, and the only way to do that is to attract smart creatives and put them in an environment where they can succeed at scale.

But a start-up, or any venture that is trying to do something big and new, favors the chaos. Start-ups don't run on process, they run on ideas, passion, and a common set of goals. They don't wait for the meeting to make decisions.

The best products are still the ones that are based on technical insights, those unique ideas that apply one or more technologies in a new way to solve big problems.

We have long felt that the start-up model, with small, autonomous teams located in one office led by passionate founders, is the most effective way to achieve remarkable new things (or fail quickly in the effort).

Business leaders should be constantly asking themselves the question, What could be true in five years?

Hire as many talented software engineers as possible, and give them freedom.

"In the old world, you devoted 30 percent of your time to building a great service and 70 percent of your time to shouting about it. In the new world, that inverts." -Jeff Bezos

Since the industrial revolution, operating processes have been biased toward lowering risk and avoiding mistakes. These processes, and the overall management approach from which they were derived, result in environments that stifle smart creatives.

A smart creative has deep technical knowledge in how to use the tools of her trade, and plenty of hands-on experience.

Smart creatives, though, place culture at the top of the list. To be effective, they need to care about the place they work.

In the Internet Century, a product manager's job is to work together with the people who design, engineer, and develop things to make great products.

We invest in our offices because we expect people to work there, not from home. 

The Bezos two-pizza rule: teams should be small enough to be fed by two pizzas.

At the most senior level, the people with the greatest impact–the ones who are running the company–should be product people. 

MBA-style business plans are always flawed in some important way. This is why a venture capitalist will always follow the maxim of investing in the team, not the plan.

So although your plan might change, it needs to be based on a foundational set of principles...The plan is fluid, the foundation is stable.

Google Principles: Bet on technical insights that help solve a big problem in a novel way, optimize for scale, not for revenue, and let great products grow the market for everyone.

A technical insight is a new way of applying technology or design that either drives down the cost or increases the functions and usability of the product by a significant factor. The result is something that is better than the competition in a fundamental way.

Market research can't tell you about solving problems that customers can't conceive are solvable. Giving the customer what he wants is less important than giving him what he doesn't yet know he wants.

The best product had achieved their success based on technical factors, not business ones.

When you base your product strategy on technical insights, you avoid me-too products that simply deliver what customers are asking for. (Henry Ford: "If I had listened to customers, I would have gone looking for faster horses.") That sort of incremental innovation can work very well for incumbents....but for a new venture, it's not enough.

*Never prioritize revenue over growth. Do the opposite. Focus on creating the best user experience.

A workforce of great people not only does great work, it attracts more great people. 

Passionate people don't wear their passion on their sleeves; they have it in their hearts. They live it. (And the truly passionate don't often use the "P-word.")

"Anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young. The greatest thing in life is to keep your mind young." -Henry Ford

Google focuses on hiring "learning animals" who have the smarts to handle massive change and the character to love it.

Favoring specialization over intelligence is exactly wrong, especially in high tech...A smart generalist doesn't have bias, so is free to survey the wide range of solutions and gravitate to find the best one.

Rules of well-run meetings:
-Single decision maker
-Manageable in size (no more than eight people)
-Attendance is not a badge of importance – if you aren't needed, leave, or better yet excuse yourself ahead of time.

Spend 80 percent of your time on 80 percent of your revenue.

"Power comes not from knowledge kept but from knowledge shared." -Bill Gates

In all effective communication, reinforce core themes (At Google: putting users first, thinking big, not being afraid to fail).

Golden rule for management: Make sure you would work for yourself.

When you start a new position, for the first three weeks don't do anything. Listen to people, understand their issues and priorities, get to know and care about them, and earn their trust. So in fact, you are doing something: You are establishing a healthy relationship.

The more inclusive definition–innovation isn't just about the really new, really big things–matters because it affords everyone the opportunity to innovate, rather than keeping it the exclusive realm of those few people in that off-campus building whose job it is to innovate. i.e. Google self-driving cars vs. search engine improvements (core business with over 500 improvements/year).

Google[x] Venn diagram to determine if it will pursue something:
1) The idea has to be something that addresses a big challenge or opportunity
2) They have to have an idea for a solution that is radically different from anything currently in the market.
3) The breakthrough technologies that could bring that radical solution to life have to at least be feasible, and achievable in the not-too-distant future.

"Innovative people do not need to be told to do it, they need to be allowed to do it." -Udi Manber

Innovation has to evolve organically...Along the way, stronger ideas accumulate believers and momentum, and weaker ones fall to the wayside. There is no process by which to implement this evolution; its defining characteristic is its lack of process. think of it as a natural selection for ideas.

UX vs. revenue:
-Google Instant – immediate search results when you start typing. A few weeks before launch, no one had performed a detailed financial analysis. The product was obviously great for the user, so we all knew that launching it was the best business decision.
-Google has launched features that improve UX but hurt revenue a little (Knowledge Graph, side panel for people/places/things).
-Gmail – just concentrate on making it great and worry about revenue later.

Google knows that in the Internet Century user trust is just as important as dollars, euros, pounds, yen, or any other currency. Product excellence is the only way for a company to be consistently successful, so our prime directive when it comes to product strategy is to focus on the user.

There are rarely conflicts between [partners and customers], but when there are, our bias is toward the user. It has to be this way, regardless of your industry. Users are more empowered than ever, and won't tolerate crummy products.

Bigger challenges attract big talent. There is a symbiotic relationship between big challenges and highly smart, skilled people: The challenges get solved and the people get happy.

A good OKR should be a stretch to achieve, and hitting 100 percent on all OKRs should be practically unattainable.

70/20/10: 70 percent of resources dedicated to the core business, 20 percent on emerging, and 10 percent on new.

"If you want to hire great people and have them stay working for you, you have to let them make a lot of decisions, and you have to be run by ideas, not hierarchy. The best ideas have tow in, otherwise good people don't stay." -Steve Jobs

The most valuable result of 20 percent time isn't the products and features that get created, it's the things that people learn when they try something new.

Create a product, ship it, see how it does, design and implement improvements, and push it back out. Ship and iterate. The companies that are the fastest at this process will win...Leadership's job must to feed the winners and starve the losers, regardless of prior investment.

And don't stigmatize the team that failed: Make sure they land good internal jobs. The next innovators will be watching to see if the failed team is punished. Their failure shouldn't be celebrated, but it is a bade of honor of sorts.

Antifragile: Management's job is not to mitigate risks or prevent failures, but to create an environment resilient enough to take on those risks and tolerate inevitable missteps. 

"Good judgment comes from experience; experience comes from bad judgment." -Mulla Nasrudin

Among your stronger employees, how many see themselves at the company in three years? How many would leave for a 10 percent raise at another company?