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University of Chicago economist and Nobel laureate Ronald Coase, who argued that it often makes sense for firms to do things internally rather than externally, because the transaction costs of finding vendors, negotiating contracts, and making sure the work gets done right are high.
Don Tapscott put it well in Wikinomics, when he wrote that “the Internet has caused transaction costs to plunge so steeply that it has become much more useful to read Coase’s law, in effect, backward: Nowadays firms should shrink until the cost of performing a transaction internally no longer exceeds the cost of performing it externally.”
Eric’s Notes for a Strategy Meeting
Start by asking what will be true in five years and work backward.
Spend the vast majority of your time thinking about product and platform.
Don’t use market research and competitive analyses.
Iteration is the most important part of the strategy. It needs to be very, very fast and always based on learning.
Scouting is like shaving: If you don’t do it every day, it shows.
Passion is more than résumé-deep, because its hallmarks—persistence, grit, seriousness, all-encompassing absorption—cannot be gauged from a checklist. Nor is it always synonymous with success.
Ray Kurzweil said that “information technology’s growing exponentially… And our intuition about the future is not exponential, it’s linear.”
Henry Ford said that “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.”
“growth mindset.”
If you think your abilities are fixed, you’ll set for yourself what she calls “performance goals” to maintain that self-image, but if you have a growth mindset, you’ll set “learning goals”
Jonathan’s modus operandi is to ask candidates to reflect on a past mistake. In the early 2000s, he used to ask candidates “What big trend did you miss about the Internet in 1996? What did you get right, and what did you get wrong?” It’s a deceptively tricky question. It makes candidates define what they expected, link it to what they observed and explore the revelations, and forces them to admit a mistake—and not in the lame, my-biggest-weakness-is-that-I’m-a-perfectionist sort of way. It’s impossible to fake the answer.
if she’s the best she can down enough Java to C how to make the Python Go.
“do not usually know what’s supposed to be impossible.”
Martha Josephson, suggested that the right combination might be McKinsey partner + Rhodes scholar, and brought us Shona Brown, whom we hired to run business operations
estimable George Reyes, Eric asked Martha to “find another Shona Brown.” She found Rhodes scholar and former McKinsey partner Patrick Pichette, who became CFO in 2008.
“What surprised you about…?”
“If I were to look at the web history section of your browser, what would I learn about you that isn’t on your résumé?”
Treat your career like you are surfing
In business, and particularly in high tech, it’s not enough to be great at what you do, you have to catch at least one really big wave and ride it all the way in to shore. When people are right out of school, they tend to prioritize company first, then job, then industry. But at this point in their career that is exactly the wrong order. The right industry is paramount, because while you will likely switch companies several times in your career, it is much harder to switch industries. Think of the industry as the place you surf (in Northern California the most rad waves are at Mavericks, dude)
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Always listen for those who get technology
Plan your career
Think about your ideal job, not today but five years from now. Where do you want to be? What do you want to do? How much do you want to make? Write down the job description:
Keep thinking about that ideal job, and assess your strengths and weaknesses in light of it. What do you need to improve to get there? This step requires external input, so talk to your manager or peers and get their take on it. Finally, how will you get there? What training do you need? What work experience?
Statistics is the new plastics
to ingest the founders’ letter from our 2004 IPO and all the internal strategy memos that Eric and Larry subsequently wrote.
Know your elevator pitch Let’s say you run into your manager’s manager in the hallway and she asks you what you’re working on. Heck, let’s make it the CEO. What do you say? This isn’t a rhetorical question—try it out right now, out loud. Go ahead—you have 30 seconds. Ugh, that didn’t sound great. You obviously haven’t practiced your elevator pitch. Work on it. Your pitch should explain what you are working on, the technical insight that’s driving it, how you are measuring your success (particularly customer benefit), and perhaps how it fits into the big picture. Know this and practice it so
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Go abroad
Combine passion with contribution
Sheryl Sandberg: “It is the ultimate luxury to combine passion and contribution. It’s also a very clear path to happiness.”
John Dewey, an American philosopher and writer, said that “a problem well put is half solved.”
Berkeley political science professor Raymond Wolfinger once observed, “the plural of anecdote is data,”
(A frequent Eric aphorism during financial discussions: “Revenue solves all known problems.”)
meaning of consensus. For those of you who skipped Latin, it stems from the Latin cum, meaning “together with,” and sentire, meaning “to think or feel,” so it literally means “to think or feel together.”
As General Patton famously said, “If everyone is thinking alike, then somebody isn’t thinking.”
Tom Peters would call Bill’s attitude in this situation a “bias for action,” and his book In Search of Excellence lists it as a top common attribute of the companies he studied.
Whenever you watch a world-class athlete perform, you can be sure that there is a great coach behind her success. It’s not that the coach is better at playing the sport than the player, in fact that is almost never the case. But the coaches have a different skill: They can observe players in action and tell them how to be better.
John Seely Brown, the former director of Xerox’s Palo Alto Research Center, once said, “The essence of being human involves asking questions, not answering them.”
Eric calls our approach to transparency a “climb, confess, comply” model. Pilots learn that when they get in trouble, the first step is to climb: Get yourself out of danger. Then, confess: Talk to the tower and explain that you screwed up and how. Finally, comply: When traffic controllers tell you how to do it better next time, do it!
“Repetition doesn’t spoil the prayer,”
They are the things you want everyone to grasp; they should be sacred; and there should be only a few of them, all related to your mission, values, strategy, and industry. At Google, our themes include putting users first, thinking big, and not being afraid to fail.
users are getting more sophisticated, as proven by the fact that search query length was increasing nearly 5 percent annually.
Make sure you would work for yourself.
Elmore Leonard’s response to a question about his success as a writer: “I leave out the parts that people skip.”
OHIO acronym: Only Hold It Once. If you read the note and know what needs doing, do it right away. Otherwise you are dooming yourself to rereading it, which is 100 percent wasted time.
The manager should write down the top five things she wants to cover in the meeting, and the employee should do the same. When the separate lists are revealed, chances are that at least some of the items overlap. The mutual objective of any 1:1 meeting should be to solve problems, and if a manager and employee can’t independently identify the same top problems that they should solve together, there are even bigger problems afoot.
1. Performance on job requirements
2. Relationship with peer groups (critical for company integration and cohesiveness)
