How Google Works

by Eric Schmidt

innovation has to evolve organically. It is the final destination of a path that starts when ideas spawn like mutations from a primordial ooze and traverse a long, perilous route from inception to fruition. Along the way, stronger ideas accumulate believers and momentum, and weaker ones fall to the wayside.

Robert Noyce, cofounder of Fairchild Semiconductor and Intel, said, “Optimism is an essential ingredient for innovation. How else can the individual welcome change over security, adventure over staying in a safe place?”

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. Give the wrong people a big challenge, and you’ll induce anxiety. But give it to the right people, and you’ll induce joy.

creativity loves constraints.

When you want to spur innovation, the worst thing you can do is overfund it.

Frank Lloyd Wright once observed, “The human race built most nobly when limitations were greatest.”

Using data will muffle the sunk-costs fallacy—that irrational tendency most humans have to count the amount of resources that have already been invested in a project as one of the reasons to continue to invest in the project (“We have already invested millions, we can’t stop now”).

A good failure is a fast one: Once you see that the project will not succeed, you want to pull the plug as quickly as possible, to avoid further wasting resources and incurring opportunity costs (those smart creatives working on a doomed project could be better deployed working on one that is a potential success).

Ask the hardest question. Understanding what you do about the future, what do you see for the business that others may not, or may see but choose to ignore?

incumbents have a big influence on the creation of regulations, and there is often a lot of movement between the public and private sectors, so the people who are making and enforcing innovation-killing regulations today become the executives in the private sector who benefit from them tomorrow.

Infinite data and infinite computing power create an amazing playground for the world’s smart creatives to solve big problems.