Google tried to do this right up until Larry took over as CEO. It can sometimes succeed spectacularly, like with GMail and Chrome. It can also fail miserably, like with Wave, Google Video, and Buzz.
I think ultimately the problem is that you end up lacking a competitive advantage against startups, who are more highly incentivized to take risks and under fewer constraints (legal, PR, infrastructure, etc.) Most of the ideas that Google put out during that 2004-2011 period were really stuff that could've been done as startups and would've probably been even better products as such, but because Google was able to put them out for free they basically "strangled" the startup ecosystem. Witness how the much-decried Reader cancellation has opened the door for Feedly to really take off.
One of the biggest lessons for me, having worked at Google from 2009-present, is just how context-dependent strategy is. It's been really interesting to see Larry make (or try to make) certain changes in company culture, understand why they're being made and that Google and the world as a whole is probably better off for them, and yet also realize that they aren't very good for me as an entrepreneurially-minded Google employee.
Better to let the market sift out the successful founders than to payroll a hundred of them, hoping for a big win. Think of how many unsuccessful founder types that Facebook didn't hire too.
Also if this guy was working for Facebook, odds are he would have ended up on messenger, and someone else would have filled the SMS market need for Whatsapp in India. Then Facebook would be acquiring that company instead.
> Better to let the market sift out the successful founders than to payroll a hundred of them, hoping for a big win.
Sorry, I can't help myself, but at a salary of $160k a year, payrolling "a hundred of them" per year would only cost 1/10th of what FB just paid for whatsapp.
It's too bad companies like FB and Twitter would rather let the 'founder' types slip by than to take more chances. When Facebook last tried to recruit me, they described themselves as "a bunch of startups that just happen to work under the same company." Yeah, right.
I meant to write 1/100th - still a mental math fail!
Stated in a different way - Facebook could have paid 1,000 teams of 10 (founders + engineers) at 160k/yr per person, for 10 years... for what they just paid for whatsapp. The collective diversity of products developed by said teams would probably be worth more than whatsapp.
The problem with PARC and AT&T labs wasn't that having a bunch of really smart people doing interesting stuff failed to produce brilliant, world changing ideas, it was that the companies in question weren't always good at capitalising on them (arguably for the better, in the case of Unix).
AT&T Labs wasn't too bad at capitalizing on their inventions, though they didn't do equally well on all of them. For a pretty long time the lab was definitely in the black, though. Their most profitable invention, which came about halfway through the Labs' existence, was probably the transistor, which made AT&T a ton of money. I don't remember where I read it, but some old Bell Labs people calculated that it made AT&T so much money that that single invention paid for something like 40 years of the Labs' operating costs.
I also believe that a significant portion of the deal value is "So Google doesn't get this and buy inroads into 'our turf'".
There's nothing wrong with that, of course, but it supports the idea that not only do you let the market pick the winner, but that once the market HAS picked a winner, sometimes you have to buy that winner partly as a defensive strategy; it's not enough to find a cheaper way to "play offense".
Sure, of course that's exactly what they're doing.
But just giving up on being able to identify these sorts of people when there's tens of billions of dollars at stake seems like an irresponsible business decision.
At these acquisition prices, it's worth putting a great deal of effort and money into alternative processes.
Actually, this is what acquihires are great at. An interesting article recently about eBay's turnaround and how CEO John Donahoe started acquiring startups to drive innovation with talent they can't simply hire or grow internally. http://www.businessinsider.com/explaining-ebays-turnaround-2...
> But beyond the tactics, Donahoe realized there was a deeper issue bedeviling eBay. It had stopped innovating. [...] eBay also had a problem attracting and retaining innovative, entrepreneurial people into its executive ranks ...
> Andreessen’s second theory of innovation is that the people who are the very best at it are the people who create successful technology companies — founders. They are the people who have a proven ability to develop a concept and bring it to fruition.
> For this reason, Andreessen believes that tech companies should be run by their founders.
> The problem for eBay is that its founder, Pierre Omidyar, had no interest in running it. And Donahoe, a talented manager, had the wisdom to know he was not the kind of visionary who could found an innovative tech company.
> So he decided he was going to have to go after the next best thing. He was going to have to build a team of founders, or founder-types, and give them the run of the place.
That's because successful founders are just lucky. That's it. Not qualitatively different from any of us. You'd have no better luck picking lottery winners by the looks of the guys entering the gas station.
You overplay your hand. There is a very large luck component to it, sure. But I mentor at entrepreneurship events, and there is a very wide distribution of people who want to start companies. Some of those people are obviously more suited to the work than others.
I think that's especially true for people who, like WhatsApp, do things that are different than the common wisdom [1]. I had dinner recently with a friend who worked for Jeff Bezos years ago. She remembered Bezos coming into a meeting in something like 1999 excited about eInk and how it was the future for electronic books. Everybody single person in the room thought he was crazy. They didn't get the Kindle out the door until 2007, and most people thought it was crazy then. But it worked.
You could call that pure luck, but I think that's only true in the most abstract sense, where everything we are is luck.
If Mark Zuckerberg was a freshman in college again in 2014, what chances do you give him of creating a $170B company in the next decade? How about in his lifetime? How about a $1B company in his lifetime?
I'd say on the order of 1. 1 in a billion 2. 1 in 100 million. 2. 1 in a million.
Sure he is smart and driven and has had every opportunity available to the one guy on planet earth who will achieve what he has. But that doesn't mean he's qualitatively different than the millions of others equally intelligent and talented who didn't buy the winning ticket.
Pretty slim because Facebook exists in 2014 buddy.
Your problem is that you're associating the biggest most overhyped entrepreneurs as being the typical entrepreneur. And they indeed do hit huge luck. So you're right there.
What the media doesn't talk about -- are the thousands of founders running profitable companies in the tens of millions or even low hundreds of millions.
If you do something of value to society, the world will make you rich with a smile on its face.
No I agree completely there. I think we all have reasonably good chances of creating successful small businesses and extracting our fair value out of society of a few million or even 10 million. But to start something that grows to billions or tens or hundreds of billions that quickly--that isn't skill, that's luck. It takes being the kind of guy who can make the 5 million dollar successful small business to have a chance to play the lottery, but I'm saying that most HN readers are of opportunity to play that lottery. Zuck is much, much different than the typical member of planet earth, but not MUCH (a little better, I'll give him that) than the average silicon valley engineer.
That's one way to look at it. But there are what, 2 million freshmen a year? If we start slotting random freshmen into Mark Zuckerberg's room at Harvard, how many of them would have made it to be a billionaire?
Yes, he got lucky. (Which I already acknowledged.) But successful founders aren't "just lucky".
If in this "what if" scenario we assume the 2014 freshman Zuckerberg has the same drive as the 2004 one, then I would say that the odds of him becoming decently successful (whatever that might mean) would be pretty high.
If you look back at his history, he had a string of very college-student-useful projects before Facebook. He knew he was onto something. Assuming that he would have the same kind of curiosity/initiative/wtv in 2014, chances are he would find new problems to solve.
Seems like he was pretty qualified on paper. Stanford grad and former VP of Engineering at Yahoo. With that in mind, maybe he just had a bad set of interviews. I think this would be more meaningful if we knew the position he was going for.
