Do we all have to be more like Google to succeed?
by Brad Liebmann, Managing Director, Xbridge Ltd
Business Money, January 2006
A recent poll now asserts that Google is the world's biggest brand. Although the source (brandchannel.com) appears to have a bias in its methodology toward online brands, the claim itself is startling. Even more astonishing is that a start-up company has built £75 billion of shareholder value within the space of only 10 years. Google is now worth more than British Airways, BT, Cadbury Schweppes, Marks & Spencer, Sainsbury and Tesco combined. Google generates £1 million of turnover and £420,000 of cash annually per employee, more than six times than the amount of cash generated per Time Warner employee.
So what lessons can we learn from the Google's meteoric rise that might increase value for our own shareholders?
Focus on the customer and all else will follow
Google has built the most loyal audience on the web. Incredibly, it has created this customer base by word of mouth. Since its founding in 1996, Google has focused on providing the best user experience possible. Its home page is simple and intuitive. Its pages load quickly. Google does not allow ads to be displayed on its results pages unless they're relevant to the results page on which they're shown. It is through this unwavering commitment to the customer that Google has built its formidable brand.
It's best to do one thing really well
Google is singularly focused on organising the world's information. This unwavering focus is how Google captured the dominant share of search traffic. Its continued focus on this science is why they will continue to grow. Although they are expanding into other related areas, this is all a natural evolution of its key competitive strength - organising information.
Fail fast and often
Google likes to release new products early and often. In the UK, Google launched its "Google Local" product within two weeks of purchasing the raw data from Yell. Implicit in this approach is a mentality that says "we want to learn from successes and failures and will do so instantly". This sounds brave, chic and thoroughly modern, however in practise it means little more than continuous improvement and embracing positive change.
Great isn't good enough
No business should accept being the best as an endpoint, but a starting point. Through continuous innovation and iteration, Google takes something that works well and improves upon it. By comparison, Microsoft has been relatively complacent as Google built its dominant position in search and as Google launches new products such as Gmail and Google Desktop that threaten Microsoft's dominance of the desktop.
Google faces significant challenges ahead. The recent controversy about China will fade but recent disclosures around "click fraud" will grow over time. Nevertheless, the UK commercial finance industry can learn a great deal from Google's passion to improve upon the status quo and Google's focus on the customer. Both should be driving forces in our industry.