Why Google's Founders Really Left Google

Ethan
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DON’T LOOK BACK

On August 10, 2015, Larry Page and Sergey Brin made Sundar Pichai the CEO of Google. At first glance, it seemed like the duo just wanted to play a more hands-off role at the company. While Sundar handled all of the day-to-day nuances of running Google, Larry, and Sergey could focus on the long-term future of the company. 

But, just 4 years later in December of 2019, Larry and Sergey would make Sundar the CEO of Alphabet itself and they would more or less fall off the grid completely. They rarely make any public appearances and they’re notorious for skipping meetings. 

Why Google's Founders Really Left Google


This is quite out of the blue given that most founders tend to play a significant role in their companies until the day they die. I mean just look at Warren Buffett or Charlie Munger. Larry and Sergey, however, have truly left the company and the spotlight despite still having 51% control of the company. 

This is a pretty bold move given that their entire fortunes depend on the performance of Google. If you ask them directly, they’ll tell you that it was time to assume the role of proud parents - offering advice and love, but not daily nagging. 

But, if you take a closer look, you’ll see that there’s more to this than they let on. It’s not that Larry and Sergey don’t have visions for Google or that they don’t want to lead the company. Rather, they’ve found that every time they try to take the reigns of the company, shareholders aren’t particularly happy. 

And this wasn’t a one or two-time event, it was a consistent theme throughout their entire time at Google. It seems that eventually, they came to accept that the goals of Google and their own goals simply did not align. 

And instead of trying to resist, they did the classy thing and truly retired. So, here’s the truth behind why Google’s founders really ditched Google and never looked back. 


FIRST TRY AS CEO

While Larry and Sergey didn’t leave till recent years, their unorthodox leadership style was evident from day one. Likely one of the best examples of this was Larry’s workplace rulebook which consisted of five rules. 

  • Rule #1 was Don’t delegate: do everything you can yourself to make things go faster. This is quite ironic given that you could argue that Larry himself is breaking this rule today. Putting that aside though, effective delegation within any business is extremely important, but Larry was actively encouraging employees to specifically avoid delegation. 
  • Moving onto rule #2, we don't get in the way if you're not adding value. Let the people actually doing the work talk to each other while you go do something else. 
  • Rule #3 was Don’t be a bureaucrat. 
  • Rule #4 was Ideas are more important than age. Just because someone is junior doesn't mean they don't deserve respect and cooperation. 
  • And finally, Rule #5 was The worst thing you can do is stop someone from doing something by saying, “No. Period.” If you say no, you have to help them find a better way to get it done. 

While many of these rules do make sense, Larry’s motivation for these rules isn’t exactly pure. You see, Larry wasn’t trying to create a harmony between managers and engineers. Rather, he was trying to completely eliminate managers altogether because he didn’t like the idea of non-engineers supervising engineers. 

He felt that this supervision was not only unnecessary but also an impediment. Larry was extremely confident in the quality of his engineering hires, and he felt that there was no reason for them to babysit, hence the rule book. Larry was hoping that the rule book would keep managers out of the hair of engineers. 

But, with time, he came to realize that this wasn’t the case and he became more and more irritated. One of the factors that pushed him over the edge was the fact that he wasn’t seeing any progress on his book-searching idea. 

Larry wanted Google to be able to scan all the books in the world and then make them searchable online, you’re probably familiar with this feature today. But, this wasn’t going well, and I don’t think you’d be surprised that he blamed the project managers. 

Instead of holding a meeting with the managers like a reasonable CEO though, he would hold a townhall style meeting with all the managers and engineers in July of 2001. He would go on to insult all of the managers in front of everyone before firing them all. 

To Larry’s surprise though, this didn’t get anyone fired except himself. As you guessed, the project managers were not happy with the choice for obvious reasons. But, it wasn’t just the project managers that were unhappy either. Many engineers weren’t convinced by this move either. 

One engineer even yelled at Larry declaring that what he was doing was completely ridiculous and totally unprofessional. Google’s human resources boss, Stacy Sullivan, would escalate this issue to the chairman of Google, Eric Schmidt, who had been placed there by Google’s investors. 

Eric would of course side with the managers and this resulted in most of the managers being reinstated and Larry being demoted from being CEO. Eric would take on this role so that he could supervise Larry and Sergey. Let’s just say Larry was very unhappy. 


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BABYSITTING

Fortunately for Eric, he didn’t have to do too much babysitting over the next several years because Larry and Sergey didn’t poke around too much when it came to the operations of Google. Instead, they focused on acquisitions that they knocked out of the park. 

First, they had the Android acquisition in 2005 which cost Google $50 million. Larry actually completed this acquisition without even telling Eric, but he didn’t mind. From Eric’s perspective, Google was already a $100 billion company and if a mere $50 million could keep Larry occupied and prevent him from making any more rash decisions at Google, that was a major win, and that’s exactly what happened. 

Over the next few years, Larry and Sergey would be enthralled with making a bunch of acquisitions. And to their credit, many of their acquisitions proved to be extremely successful like YouTube. Aside from acquisitions, these two were also super busy with what they like to call the moonshot factory. 

Likely the two most famous inventions out of this factory are of course the Google self-driving car and Google Glass. Pretty soon, Eric began to feel that he could trust these two once again. Not only were they making phenomenal acquisitions and groundbreaking innovations, but they weren’t doing anything that was too questionable either. 

They weren’t insulting employees in front of each other nor were they firing every manager in the company. It seemed like the duo had matured as business leaders, and shareholders very much agreed. So, in 2011, when Eric stepped down as CEO, he would pass on the title to Larry. 

But, it didn’t take long for everyone to realize that nothing had changed for Larry or Sergey. They had simply found an outlook for their unorthodox ideas with acquisitions and the moonshot factory. But, now that Larry was back to running Google properly, many of the same issues started to resurface once again. 


SECOND TRY AS CEO

A common theme for Second Try As CEO Larry seems to be that he simply doesn’t like oversight in general. Originally, he didn’t like managers overseeing engineers, but that was before Google went public. 

Now that Google was public, one of his largest concerns was investor oversight of Google, but he wasn’t gonna immediately try to tackle that issue. The reason that he got screwed a decade ago was because the employees weren’t on his side. 

So, this time he was going to make sure that investors were on his side before he tried anything too radical. And this started with giving investors what they wanted most: sustainable growth. Larry started off by slashing Google’s products, features, and services. 

Apparently, he reduced these by 70 within just 2 years of taking over. He also placed an emphasis on design and simplicity trying to emulate some of Apple’s success within that realm. And finally, Larry also implemented a new constraint for acquisitions called the toothbrush test. 

Instead of looking at the profitability or financials of a given company, Google evaluated these companies based on their usefulness alone. If a company offers something that people will use once or twice per day and it makes their life better, the company is a winner. If it doesn’t do that, however, Larry wouldn’t buy the company even if they have tremendous financials. 

While this was definitely on the side of unorthodox, it worked. Google’s revenue was growing, its profits were growing, and most importantly, its stock price was growing. Investors were starting to trust Larry, but it didn’t take very long for him to take things too far once again with Google Island. 

If you haven’t heard about Google Island, it was essentially Larry’s idea to take Google off the grid not necessarily physically but metaphorically. He wanted Google to have freedom from not only investors but also government regulation. 

One of his proposed ideas was that laws older than 50 years wouldn’t apply to tech companies. TechCrunch put it as Larry wanting the Earth to have a mad scientist island that was run by Google. While this may sound cool in theory, it was also super unrealistic. 

Google Island would not only free Google from some of the barriers to innovation but it would also free them from accountability altogether. If neither the government nor investors could keep Google accountable, who would? 

Obviously, Larry believed that he could keep Google accountable, but this was more of a pipe dream than anything. After pitching this idea, dozens of publications would ruthlessly bag on Larry claiming that he was completely out of touch with reality. And almost all of them posed the same question: is this the type of guy you want to be in charge of Google? 


A REALIZATION

No one would fire Larry from his position the second time around, but Larry himself had come to a realization: Google would never be what he wanted it to be. This isn’t to say that Google wouldn’t be successful or that it wouldn’t make a boatload of money because it’s done both of those. 

But, what this did mean though is that Google would never become a groundbreaking research institution which is what Larry and Sergey wanted from day 1. Larry and Sergey were never your traditional tech founders. They weren’t your classic college dropouts who wanted to change the world and become mega-rich. 

They were actually PhD students who founded Google as a research project. And while they were all for the financial side of Google, they didn’t want Google to lose its identity as a research institution either. 

But with time, it was clear that investors didn’t really care about this unless it could directly be linked to profits. At the same time, both Larry and Sergey were facing significant personal challenges as well. Larry had been struggling with vocal chord paralysis for much of his adult life and things were only getting worse in the early 2010s. 

This made it especially difficult for Larry to engage in interviews, earnings calls, and other PR events which are extremely important for any public company CEO. This would make Larry infamous for being MIA. Meanwhile, Sergey had gotten caught up in an affair which not only ruined his public reputation but also his relationship with Larry who has refused to speak to him since. 

Given that Larry and Sergey have 51% voting power at Google, they could technically take Google in whatever direction they want. But, given that they only own about 14% of the company together, I think it was pretty clear to them that abusing their voting power would be a pretty douchy thing to do to the other 86% of shareholders. 

So, they would decide to do the classy thing and give shareholders what they wanted. They gave the shareholders a CEO who could grow Google into a trillion-dollar company: Sundar Pichai. 


Wrapping Up

In the meantime, Larry and Sergey have ventured off into what they’ve always wanted to do. Research exciting ideas like flying cars and anti-aging and hopefully bring them to fruition. And that’s why Google’s founders really left Google. 

Do you think Google would be better under Larry and Sergey’s leadership? Comment that down below. Also, drop a like if you hope that Google doesn't forget their slogan: Don’t be Evil.

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