This Is What Google Does Wrong
This Is What Google Does Wrong
Why startups shouldn’t follow Google’s lead.
Mitchell Luo
Google is a bad example of a solid business model.
I know that this is an unpopular opinion, but as a startup educator who coaches entrepreneurs for a living, I want to make it very clear the types of businesses startups should look up to.
Google is not one of them.
Here’s why I think so —
Revenue from the ads side of Google’s business makes up more than 90%. A vast majority. Rather than doubling down on this segment, Google keeps taking stabs at creating new products with mediocre results.
Remember Google+? Pretty much a joke of a platform.
Do any of you regularly use Google Hangouts, or just when someone forgets to include a Zoom link?
Many of Google’s business moves are the opposite of what most startups should do, here’s an analysis of the do-nots you can learn from Google’s business model.
Splatter Method
Google uses the splatter method to an extreme. They have had their tentacles in so many different SaaS categories, it’s hard to keep up. The results of this strategy have been a lot of embarrassing attempts at doing a C+ job in markets where the players were already skyrocketing.
Some examples of products they’ve created with mediocre results include: Google+, Google Talk, Google Reader, Google Now, Google Play Music, and Google Hangouts. According to KilledByGoogle they’ve killed over 200 products (check out the full graveyard here).
The results? A lot of cash burned and time wasted, but probably a lot of good data collection.
It’s difficult for me to understand why Google keeps creating mediocre products in arenas that already have heavy hitters light years ahead in their development. Maybe they are just doing it for data collection purposes and using these products as a front. Or maybe it’s plain and simple — their leadership team isn’t that great at creating products. Who knows.
Regardless, as a startup, you should not be taking cues from Google’s splatter method when it comes to product development and take an opposing approach — focus on one or a few products and obsess over perfecting it.
If you want an unreliable business model that shifts in sales as often as the change of the wind, you go the Google route.
If you want a business with reliable revenue streams, you lock it down by making your customers happy with an excellent product, and get savage at carving out a desirable product within your industry.
A product that creates desire is a product that pays the bills.
Solid, But Not Exciting
Remember those 3-5 restaurants in your hometown that aren’t that great, but they’re reliable and have been cooking you mediocre meals since you were an infant?
No one goes to these restaurants to have an electrifying dining experience, they go because they know what to expect.
Google is that Italian restaurant in your hometown that makes a solid, but not exciting spaghetti and meatball.
They’re not in the business of creating exciting products that romance you. They’re good at creating solid products that work, and then throwing the hammer down on market dominance.
For many industries and startups, taking the solid, but not exciting approach is a privileged one to take. It’s not one you take if you need to take the fastest route towards making a high volume of sales ASAP. It’s not one you take if you are on a fast track towards paying your founding team their salaries.
Unless your industry is craving solid, but not exciting, this isn’t a byline you want under your business’ name — for the sake of competitiveness and for your founder’s wallets.
This is a strategy that startups with a blank check can employ, but the vast majority should not. It’s a money and time fire pit.
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