With the news that Google stopped work today on Wave, I’m starting to think I’ve been giving them too much credit as a product company. There’s no doubt they can build and monetize a business like search, and I expect they’ll add another big chunk of bottom line revenue with DoubleClick for Publishers. They kill at running huge-scale automated systems that have fat transactional revenues streams under them – and if anyone can find a revenue model for YouTube, I’d bet on Google. Plus they’re more dedicated to raw innovation than virtually any other company on the planet. But can they build something from scratch, market the thing and change the world? The answer seems to be no if you use Nexus One and Wave as examples.
I’ve had many conversations with entrepreneurs about the absolute terror of creating a business that Google could replicate with 20 engineers over a long weekend. While that’s probably still a somewhat legitimate worry for the two-person startup, I think the lesson here really is that Google web tools are the raw material you can comfortably use as part of your technical solution. Their strength lies in creating building blocks, not buildings. And the tech landscape is littered with examples that prove great UI design always wins over a truckload of poorly assembled features – witness 37Signals, Balsamiq, Wufoo, etc. And I can't think of a single UI improvement they've driven beyond threaded conversations in GMail.
The other important role Google plays is market maker. Their amazing pace of innovation rarely comes out the sausage grinder as a world-changing product, but it sure as hell can legitimize a market – like Google Voice did. Most Voice users I know are closer to creating a drinking game out of the transcribed text than depending on it for serious business communications. But more importantly, the market legitimacy enabled a company like Twilio, which has in-turn spawned hundreds of 2-3 person startups – including my man Andrew Watson at OtherNum. So at least all those innovation cycles don’t go to waste, but the Google kids haven’t quite figured out how to use their superpowers for their own benefit.
So maybe Google will simply continue to power its growth with big M&A deals like DoubleClick, but there’s always the chance the next product out of the gate will be a world killer. The next litmus test will be Google TV, which I would tell you is a Bermuda Triangle-like product space that’s stymied every big player that could have killed it – Microsoft, Tivo, Apple, etc. The fact they’re partnered-up with Sony to cook the platform directly into TVs give me a glimmer of hope that computing might finally end up in my living room in a meaningful way. And behind Google TV is Google Games, which a quiet $100M investment in Zynga should bring to life quickly.
They’re fun to watch from the outside, but I’m less scared of them as an entrepreneur these days. I’d love to hear other entrepreneurs’ take on Google as a competitor.