Innovation in business: a short history of Google.
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We often talk of innovation in business and mostly what we reference are new products, new technologies and processes. But in reality, the shifts in thinking that consistently create the most wealth are around new business models rather than new NPD or tech development.
The best recent examples of this include the largest accommodation provider in the world that doesn’t own a single room, Airbnb, one of the worlds biggest online shops that has no inventory, Alibaba and the worlds biggest taxi firm that doesn’t own a single cab, our friend Uber. But you could also include the likes of Zara, the produce what we sell fashion chain, Ikea’s marriage of global resourcing with European design and Hilti – who develop, manufacture, rent and maintain products to the global construction and mining industries.
Here, now – I’d like to consider in a little more detail perhaps one of if not the finest example of shift business thinking over the last 25 years, Google.
Google was a relatively late entrant to the web search space, incorporating in 1998 with $100,000 investment from Sun Microsystems co-founder Andy Bechtolsheim. At the time most educated observers thought the market mature with little space for new entrants, what made Google different was the model it used to shape what it did, basing its approach not on any new or breakthrough technologies but on how it interpreted what we, the user wanted.
Before Google, most search engines relied on databases of textual keywords to find and display relevant results. Whenever internet users entered a search term, programs such as Lycos and AltaVista would simply compare the term to their databases. What Google did was to re-imagine their search algorithm by using the link structure of the web to make editorial decision on behalf of their users – based on tow key criteria, relevance and popularity.
They concluded that to be as useful as they could as an information service they needed to do what other search functions were either not doing or not doing well, discriminating, prioritising, editing, what was useful, relevant and engaging from that which was merely trivial, distracting or meaningless. And the key to the very linking nature of pages on the internet. They view a link between pages as a ‘vote’ and quite simply, the more votes a page got, the more useful, relevant etc it was and the higher up the search results it appeared.
The choices and preferences of the user were in effect fashioning and delivering the product offering.
In his book Weaving the Web, Tim Berners-Lee writes:
I was excited about escaping from the straight jacket of hierarchical documentation systems…. By being able to reference everything with equal ease, the web could also represent associations between things that might seem unrelated but for some reason did actually share a relationship… On the Web… scientists could escape from the sequential organisation of each paper and bibliography, to pick and choose a path of references that served their own interest.
Google were the first to understand the practical potential of Berners-Lee’s vision and build their information service on skilful editing. This was what set Google apart from its competitors – this is why Google won.
There is no business more responsible for shaping the modern internet and modern life, than Google. As the global repository of human knowledge, Google’s 95% share in search traffic has completely taken over how we inhabit the vastness of the internet. In September 2018, Google turned 20 years old, and in January 2020 the stock market value of Google’s parent Alphabet surpassed $1 trillion, the fourth company in corporate history to do so and marking one of the most influential stories of any corporation in history.
Yes all of this requires some incredibly clever science, impressive tech and business management but the innovation, the critical shift that set this company apart came from the innovation in thinking and the insight then to practically apply that thinking in a way that delivered something new, something relevant and useful, something better.