Don Dodge on The Next Big Thing

How Google sets goals and measures success

Google sets impossible bodacious goals…and then achieves them. The engineering mindset of solving the impossible problem is part of the culture instilled in every group at Google. Tough engineering problems don’t have obvious answers. You need to invent the solution, not just optimize something that exists. Every quarter every group at Google sets goals, called OKRs, for the next 90 days. Most big companies set annual goals like improving or growing something by x%, and then measure performance once a year. At Google a year is like a decade. Annual goals aren’t good enough. Set quarterly goals, set them at impossible levels, and then figure out how to achieve them. Measure progress every quarter and reward outstanding achievement.

OKRs are Objectives and Key Results. I submitted my Q1 OKRs with what I thought were aggressive yet achievable goals. Not good enough. My manager explained that we needed to set stretch goals that seemed impossible to fully achieve. Hmmm…I said “This is just a 90 day window and we can predict with reasonable accuracy what is achievable. Why set unrealistic goals?” Because you can’t achieve amazing results by setting modest targets. We want amazing results. We want to tackle the impossible.

Failure is not an option – A while ago I wrote a post about the culture of “failure is not an option” and how, taken the wrong way, that actually conditions people to set modest achievable goals that they are certain they can achieve. Because if they fail…they are fired. Taking great risks, pushing innovation, and striving to achieve the impossible will never happen at companies like that. In that post I discuss how startups definition of “failure is not an option” is completely different. For startups it means they will try 5 or 10 or 20 approaches until they find one that works. They won’t stop until they succeed. Google’s culture seems to follow the Thomas Edison approach which paraphrased is “I haven’t failed, I’ve just found lots of approaches that don’t work, and I am closer to the solution”.

Achieving 65% of the impossible is better than 100% of the ordinary – Setting impossible goals and achieving part of them sets you on a completely different path than the safe route. Sometimes you can achieve the impossible in a quarter, but even when you don’t, you are on a fast track to achieving it soon. Measuring success every quarter allows for mid course corrections and setting higher goals for the next quarter.

Rewards For Success – The rewards for achieving the impossible are significant. As you might expect there is an algorithm for calculating engineering bonuses with various multipliers. Google attracts the best people in the industry for many reasons, maybe most importantly because they give people the resources and support they need to achieve the impossible. Financial rewards are significant, but they are not the primary motivator. Working with the best people in the world and achieving greatness is the ultimate reward.

To use a sports analogy, do you think Peyton Manning or Kobe Bryant are motivated by money? No, they earned more money than they could possibly spend years ago. They are driven by the desire to be the best in the world. That desire and drive is far more powerful than any amount of money. That same drive and desire is evident all across Google.

Startup entrepreneurs are driven by similar desires. To achieve the impossible. To create something from nothing. To attract the best team. And, to make a difference. In many ways Google is still a startup, with the founders still working hard every day to achieve the impossible. Every company has a process for setting goals, measuring success, and calculating rewards. It is not that Google’s process is significantly better…it is the mindset and culture that is totally different. There is an energy force field that you can feel when you are surrounded by top achievers. It is exhilarating, and inspires you to achieve more than you thought possible. It feels good!

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SeedCamp European startups visit NYC and Silicon Valley

SeedCamp is a European based startup incubator similar to Ycombinator or TechStars here in the USA. Google hosted the top startups from the program in New York City and Silicon Valley this week. Each startup pitched to an audience of VCs, Angels, and startup mentors. Here is a short overview of each company written in real time as they presented. Please forgive the brevity…they talk very fast.

Advertag - Tag based search for advertisements for job listings, stock photos, etc. Companies looking to hire people tag their ads with Advertag. Then the ads show up on their destination site. Sort of like AdWords for job listings. They improve SEO by automatically extracting tags from content to make the ads searchable. They aspire to be an ad platform (hard to scale), but are also looking at ways to aggregate and filter results from other sources. Looking to raise some seed funding.

Codility - Test job applicants for coding skills. Send candidates a link to Codility to take an online test. Get an evaluation report and a code listing of everything the candidate did. Great for screening hundreds or thousands of candidates based on coding skill, not resume writing skill. You choose the coding test and the preferred programming language. Codility presents the test to applicants but mutates it slightly so that candidates do not share answers to the test. It also detects cut and paste or other cheating techniques. Looking to raise $650K.

Brainient - Video advertising - Brainient’s technology helps video publishers monetize their content with affiliate marketing and interactive ad elements. Publishers select the best performing advertisement for their video and annotate the video to have an affiliate network link attached to it.

ERPly.net  - Web ERP for retail and distribution, especially for small / medium businesses - includes billing, purchasing, inventory, and CRM. Great management dashboard to monitor your business. Has over 600 paying customers, ASP $60, Monthly rev about $40K. ERPly has a 30 day free trial, then various subscription packages. Plan to raise $500K to $1M

Joobili - Travel site recommendations based on time of year. Joobili starts with the date you want to travel, then suggests places you might be interested in based on events that are happening during your vacation. They have an enormous database of events. Freemium model. Free to list event, and free to use. Pay for premium listings. They also have collect revenue for advertising, and commissions on travel booked. Esther Dyson is an Angel investor. Looking to raise $1M to $2M

Kukunu - Travel planning, recommendation engine, social platform to include friends (Twitter & Facebook integrated) - Recommend cities to visit, hotels, restaurants, cultural events. People spend about 29 days planning their travel. Kukunu has a trip planning tool, recommendation engine, and incorporates your social network friends. Travel is a huge market with lots of revenue streams available. Looking to raise $500K for 9 months runway.

Kwaga - email inbox management - prioritizes your inbox, reminds you to respond to important emails, and reminds you to follow up on emails you sent to others. Uses semantic technology to parse your email and find messages that are important to you.  They prioritize emails based on Todo requests, meeting requests, emails you sent with follow-up flag, telephone requests, passwords included in emails, embedded info like links, FYI (auto down ranks the email). Also available on iPhone, and soon Android. Works with Gmail. Freemium model. Raised $1M from grants and angels. Looking to raise $2.5M

Patients Know Best – Better communication between patients and doctors, allows online consultations, doctors upload test results to one place online, you get full access to your medical records. Track your test results over time. Make your test results and health records available to doctors you select. Helping patients with chronic disease. Chronic disease patients consume 60% of health resources.

Platogo - Development tools for social games, automatically publish games to multiple social networks. Platogo has tools for professional game developers to get games on Facebook. Ad supported, or white label to game developers with a subscription per user. They also share in the micro-transactions from the games. Social network abstraction so when Facebook changes its APIs or infrastructure Platogo makes the necessary changes. Also has modules to add high scores/achievements/challenges capability to your games. Usage statistics. Platogo provides hosting and database infrastructure.

Shout'em - Create your own mobile social network - mobile/LBS = location based Real Time microbloging. Find people who have similar interests based on your present location. They already have 11K networks running on Shout'em after one year. They describe it as Ning meets FourSquare. They have widgets for integration with Facebook, Ning, Twitter.

WonderGraphs - web based graphs and data. Allows people to create a graph, share with others, and get feedback. Viewers can click on the graph and drill down on the data, and make views of the same data. Easy to use drag & drop interface. They have lots of different visualization templates that make it easy to change the view. Targeted at high end power users that analyze lots of data. Works with Google spreadsheets.

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What do Mark Cuban, Dan Farber, Steve Ballmer, and Mary Jo Foley have in common?

Doing what you love to do is a special privilege. Many people trudge through life working jobs they don’t like, or in these times, struggling to find a job at all. This week I had the chance to spend time with Mark Cuban, owner of the Dallas Mavericks, Dan Farber, Editor in Chief of CBSnews.com, and Mary Jo Foley, author of Microsoft 2.0, and writer of MicrosoftWatch. During our conversations Microsoft and Steve Ballmer usually came up. On reflection it became clear to me what all of these people have in common; they love what they do.

Steve Ballmer and Mark Cuban are billionaires many times over. They don’t need to work, and money stopped being a concern for them decades ago. Yet, they still go to work every day and still have the energy and passion they had when they began their careers. Why? Because it isn’t about the money…it is about the competition. It is about making a difference, making something happen, and helping people. It is what they do, and they can’t imagine doing anything else. Retiring to a beach in Hawaii would be boring and unfulfilling.

Mark was in Boston Monday night when the Dallas Mavericks played the Celtics. The Mavericks won convincingly and Mark was on top of the world giving “high fives” to fans and friends all around. Even in enemy territory, everyone likes Mark Cuban. I was down on the floor with him before the game. We were trying to make our way over to the other side of the court where my wife was sitting. We couldn’t go two feet without a Boston fan shouting out his name, asking for an autograph or picture. He acknowledged every single fan.

Robert and Jonathan Kraft, owners of the New England Patriots, are the same way. Everyone respects the Krafts everywhere they go. Patrick McGovern, founder and chairman of IDG, Larry Page and Sergey Brin, founders of Google, are all billionaires, but they all have that same passion and drive to go to work every day.

Dan Farber and Mary Jo Foley aren’t billionaires, but they are doing what they love to do. They are the best in the business at what they do, and they can’t imagine doing anything else. I first met Dan when he was a writer at Cnet. He went to all the tech conferences, always in the front row, taking pictures and writing stories. In a world where writing snarky lines and digging up dirt on people is common practice, Dan is an honorable gentleman who writes balanced insightful stories without the hype. Mary Jo Foley is a legend in the industry. No one knows more about Microsoft than MJ. I visited Dan Farber at CBS News headquarters in New York (pictured right at CBS Evening News desk), and had dinner with Mary Jo Foley later that night. I saw that same exuberance and passion for their work that I saw in Mark the night before. They love what they do, they are good at it. They are recognized as industry leaders. No other reward is necessary.

Start-up entrepreneurs have that same drive and passion. Earlier in the day I hosted the 10 best SeedCamp start-ups at Google in New York. They have interesting ideas on how to solve big problems with software solutions. I will write more about their new companies in a future post. I mention them here because they have the same thing in common with all the aforementioned people…they love what they do.

Love What You Do – We won’t all reach our ultimate goals. But, at least make sure you love what you do. If you can do that, and find the love of your life as your spouse, you have made it. Everything else is just details. Life is good!

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Predictions for 2010 and the new decade

New Years Day is a time for thinking ahead to a new year and decade. But first, a look back. For me, the Internet started in 1994 with Netscape. I started working with AltaVista in 1996, and with Napster in 1999. My first modern and affordable cell phone was the Motorola StarTAC flip phone in 1996. It was like the Star Trek communicator, incredible. Google came along in 1999. Think about the computer, cell phone, TV, and Internet connection you were using 10 years ago, in December of 1999. Now imagine the advances we will see in the coming decade. John Battelle has some interesting predictions, including that Google will become a software company. Here are my predictions.

Trends for the Next Decade

The future of computing – Your cell phone will become your primary computer, communicator, camera, and entertainment device, all in one. The exciting new applications are running in the browser, with application code and data in the cloud, and the cell phone as a major platform.  I think in the near future there will be docking stations everywhere with a screen and a keyboard. You simply pull out your phone, plug it into the docking station, and instantly all your applications and data are available to you. You can connect to the Internet via your cell phone service, WiFi hotspot, or wired connection.  Your phone will have enough storage so you can decide which applications and data are stored on your phone, and which will be in the cloud. Replication will work seamlessly in the background so that you always have a backup copy of your data in the cloud.

Mobile Computing – Mainframe to PC to mobile phone - Mobile phones are clearly the next computing platform. Mainframes (IBM) dominated the 60’s, 70’s and 80’s. PCs displaced mainframes in the mid 80’s, and with it Microsoft became the new king of the hill (1985 – 2000). The Internet in 2000 enabled web applications, web commerce, and the notion of cloud based computing. The iPhone took mobile computing to the next level. It delivered a beautiful user interface on a cell phone screen, with hundreds of applications, and all the computation and data storage in the cloud. Android will accelerate this trend in 2010.

Mary Meeker of Morgan Stanley says Mobile Internet usage is bigger than most people think, and it is exploding. Every platform shift has 10X the number of devices and users. There were about 1M mainframes, 10M mini-computers, 100M PCs, and 1 Billion cell phones. The next wave of mobile devices will be over 10B.

Cloud Computing – The explosion of reliable broadband bandwidth, virtualization technology, cheap storage, memory, and servers, has made Cloud Computing the obvious choice for the next decade. There are huge cost advantages versus on-premise servers. Why buy servers, hire IT admin to manage them, buy operating system licenses, application licenses, pay 20% maintenance fees every year, worry about security updates/breaches, hassle with asset management, etc., when you can just “pay as you go” with cloud computing resources? You can buy compute cycles from Amazon, or hosted applications like Gmail and Google Apps. Google also provides a cloud infrastructure with an integrated development environment to build scalable web applications. The Cloud provides lots of choices and cost advantages.

Browser as Web OS – The browser is becoming more important than the underlying Operating System. HTML5 puts many OS capabilities into the browser, especially off-line storage/use. From 1995 to 2005 there was very little innovation in the browser. That will change in the next decade. Web developers will be able to write their applications to one set of web standards, with more capabilities, and not worry about OS or browser incompatibilities.

Android will disrupt the mobile business – Google’s Android will continue to disrupt the mobile business, and accelerate the pace of innovation. In the past the major mobile carriers controlled the business, decided which applications would be available, and how much they would cost. Innovation was suffocated. Later the iPhone App Store allowed developers to build all sorts of new applications, but Apple still controlled which applications got approved, and it was only available on the AT&T network. Android changes everything. More handset manufacturers and cell phone carriers will support Android. And developers will rush in to build new applications for a wide open market. No more gatekeepers suffocating innovation.

Mobile bandwidth will explode – Cell phone coverage and bandwidth has improved over the past decade, but will explode over the next decade. The new 700Mhz wireless spectrum became available in 2009, and will be built out over the next decade. Think about the dial up Internet service you had in 1995 compared to the broadband you had in 2005. Cell phones will see the same explosion in bandwidth in the coming decade, which will enable new applications and uses.

Games on your cell phone – There are already lots of simple games available for cell phones, but the new bandwidth and cloud computing infrastructure will make new multiplayer games possible. Virtual goods and virtual reality will see lots of innovation, and drive lots of revenue. Platform shifts usually leave the dominant leaders behind. New startups emerge with completely new products, and business models.

Cell phone as payment device – Your credit card is just a piece of plastic that can do nothing by itself. The magnetic strip on the back must be read by a card reader and transmitted digitally to a server in the cloud. How quaint credit cards will seem 10 years from now. Your cell phone is already digitally connected to the cloud. You can authenticate yourself in a variety of ways. Your cell phone is with you all the time, even more so than your credit cards. Other countries are already using cell phones as payment devices. The USA will catch up in the next decade, and develop many new uses.

Software companies become Application companies - Just as the PC revolution spawned hundreds of software startup companies, Android and iPhone will spawn thousands of new, smaller, software app companies of 2 to 4 people. In the past you needed to raise $20M to $40M to start a software company that would reach $50M in revenue and employ 200 to 400 people. Those days, with rare exceptions, are over. The mobile platform allows small single app companies of 1 to 4 people to build a very profitable small company. There will be thousands of small companies and a handful of them will make hundreds of millions. Come to think of it…that is not a lot unlike the old model, just smaller and less expensive to start.

Gmail and Google Apps go enterprise - I think 2010 will be the year that enterprises of all sizes start their transition to Gmail and Google Apps, and take their first steps towards the vision of the future. The move towards Cloud Computing is obvious. Gmail and Google Apps are the easy first steps in that direction. The cost savings are enormous,over $500 per user per year. Compare that to buying software licenses and maintenance from the old style software giants, and add the costs of server hardware, and IT managers to run them. There are already lots of companies and state/local governments using Gmail and Google Apps, but 2010 will be the breakout year where you start hearing about it in the press.

What do you think? What are the big trends for 2010 and the new decade? What companies and products will lead the way?

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