4 ms·

This article is poorly thought out. He accuses Google of stifling innovation, then he spouts this gem: "Meanwhile, at Google, the cash cow is search-driven adv

This article is poorly thought out. He accuses Google of stifling innovation, then he spouts this gem: "Meanwhile, at Google, the cash cow is search-driven advertising. That allows the company to encourage engineers to waste 20% of their time on "projects", like Google Wave." Apparently he thinks that a) A company should only stick to its core product. (and some how this is innovation) b) If a company experiments it is "waste" and crushes other smaller companies stifling innovation (which is why twitter got crushed... oh wait) Waste of my time reading this.

p_nathan 16y ago
Agreed. The author seems to have a very bean-counter attitude towards things; I think he is saying, if it's not immediately making money, or can't be shown to be immediately making money, axe it! Real innovation is so radical there is no business case for it until you create demand for it.
mmt 16y ago
The key here isn't innovation, but useful innovation. But the net result of cash cow disease is a waste of brainpower, and a decrease in useful innovation. From what I can tell, there isn't as much of a contradiction as you imply, and the author is merely advocating a spin-off technique for investing in non-core innovation.
- evilmushroom 16y ago
  And what of the "unuseful successful innovation"? 1) Android is growing like wildfire-- contributes over a billion to revenue last year it was claimed. 2) Google App Engine serves over a billion page load a day. 3) Google Apps? I love it-- etc etc. Spin-off is a technique, but I don't think it's the only way to go.
  - mattmanser 16y ago
    The point the article is making is that if Google hadn't entered those markets, someone else would have and done it a lot better. Who's going to seriously invest in an online word processor or spreadsheet with Google apps squatting on the territory? Just MS. Google apps is still pretty basic and they're not operating under commercial conditions, which means potentially the customer is not getting what they actually want. I think in some ways he's wrong, not operating under commercial pressures is not necessarily a bad thing, but Google and Microsoft have recently been extremely weak on following through on promising technology, abandoning projects instead of pivoting. But in Google's case it can be especially toxic, it's then difficult for others to enter those markets as suddenly there's a free competitor. That's not healthy and on that I agree with the author.
    - kenjackson 16y ago
      But in Google's case it can be especially toxic, it's then difficult for others to enter those markets as suddenly there's a free competitor. That's not healthy and on that I agree with the author. But isn't this the grave we've dug for ourselves (as software developers)? We've pivoted the whole market so that software has no intrinsic value on its own? Look at WordLens for example. Mindblowing technology. If you could only get it in a standalone piece of HW the markup would purely be a function of the HW cost. As it is, they started pricing at $5. And as ridiculously cheap that is I can see people saying, "Why isn't it 99 cents?" At this point the horse is out of the barn. The value of your product is no longer the utility of the product, but rather how well advertisers can leverage your audience. Although that makes me think, there's great advertising angles with WordLens since you know what words/signs people are looking at. I freaking went to sleep thinking about that product... sorry for the tanget. :-)
      - mattmanser 16y ago
        I don't really agree with you here, the size of the biggest market they can go after, anyone who takes foreign vacations, is so massive that $5 is fine. By keeping the cost lowish, they're discouraging immediate competition, but can still make a large profit if they market it right. And that video certainly looks like the right marketing to me!
        kenjackson 16y ago
        I'm sure they'll make plenty of money, no disagreement there. My point is that I don't think they can charge much more than $5. Consumers just don't value software enough to pay that amount. The people that complain about a $10 app w/ this functionality will have no problem paying an extra $20,000 for the top line package on a new car. Or $20 for a T-Shirt. Or will pay an extra $2,000 to upgrade to 1st class on that foreign vacation. For most people software has the value of a Happy Meal prize.
        kenjackson 16y ago
        BTW, here's a review of the product. http://gigaom.com/mobile/augmented-reality-translations-word-lens-vs-google-goggles/ http://gigaom.com/mobile/augmented-reality-translations-word... read the last line of the WordLens review... "A price cut would also help a lot." $5 is too much to pay for this app! A medium caramel frappucino from Starbucks is almost $5! It just seems like over the past 20 years I've seen this evolution of programmers building intricate valuable product, to now it being generally viewed as disposable crap... even the best stuff. It only has value when coupled with HW or is a service.
  - mmt 16y ago
    1) Android is growing like wildfire This was an acquisition. 2) Google App Engine serves over a billion page load a day. Is it profitable? (I'm actually ignorant here.. not snarkiness). 3) Google Apps? I love it-- As do I, but not yet so much to pay for it. Spin-off is a technique, but I don't think it's the only way to go. Indeed, I'm not sure even the author is suggesting it's the only way.
- sukuriant 16y ago
  What's useful innovation? How do you know it is useful innovation? How long does it take until you discover it's not, if it isn't? What about if it is? Was the pitch line of Twitter good enough for you to consider it 'useful' before it became what it is?
  - m104 16y ago
    One of the author's points is that things like Twitter are not being developed and released by Google and Microsoft, despite the massive R&D spending. Furthermore, the only reason why we have Twitter at all is because those founding developers didn't happen to be working for one of the cash cow diseased companies.
    - sukuriant 16y ago
      My point was that, at least to me, twitter sounded like a stupid idea on paper. I was proven wrong, but there are many ideas just like it that you have to implement to see if it's useful. The phrase "try it and see" comes to mind. That's what many of these side projects are for; and, when you have a TON of money to play with, you can go off and throw a few hundred thousand or million at it and not worry about it. If it turns out to be a good idea, then yay! Victory. If not, oh well, you're still making enough outside of that project to cover everyone.
      - m104 16y ago
        Well you'll get no disagreement with me that "try it and see" is a good thing and needs to be funded. What the author is saying, and I take as a very insightful point, is that you're unlikely to efficiently find a project's make-or-break point if you're always awash in cash. Time and resources tend to get used if they are available. Research tends to recommend more research. Delivering a self-sustaining product is hard compared to discovering and exploring within a sandbox. What the "startup" mentality has that the cash cow companies lack is the sink-or-swim pressures that create success or failure from new projects. Market pressures, in other words. Cash cow companies can afford to have many projects in limbo, sucking time and energies away from progressing towards projects that will ultimately succeed. Because cash cow companies (by their very nature) haven't had to develop many successful projects, they tend not to be very good at it. Not only that, but cash cow company executives often become fearful of any line of development that may undermine the cash cow's market performance. When those two factors coexist, you're left with a company that's not only painted itself into a corner, but has also forgotten how to paint. BTW, I think Twitter sounded like a simple idea on paper, but certainly not a stupid one. If a small group of people finds a passionate use case, there are likely others out there who will feel the same.
- gvb 16y ago
  The author is advocating giving the profits to shareholders rather than investing in innovation. He phrases his "spin off" comment as "let someone else invest in innovation." Cash cow disease costs _stockholders_ untold (sometimes actively buried in accounting maneuvers) dollars. Consider Xbox, which consumed billions (that's with a 'b') before eventually turning a profit of millions (that's with an 'm'). If Xbox had been spun into a separate company, then Microsoft _stockholders_ could have kept those billions (with a 'b') and let _someone else_ decide to invest billions in trying to jump into the game console business. (emphasis mine).
- crander 16y ago
  You cannot discuss innovation without discussing Christensen's Innovators Dilemma and disruptive innovation. The market incumbent strives upmarket and creates a performance oversupply (a surplus of features in excess of customer demand) which opens space below for a downmarket competitor to disrupt upmarket.
madmaze 16y ago
I completely agree with @evilmushroom and strongly disagree with the article. Especially about the "That allows the company to encourage engineers to waste 20% of their time on "projects", like Google Wave." Maybe I was the one user that really enjoyed using wave, it is a great collaboration tool if you have between 2 and 8 people working on one thing. We wrote entire(60+pages) of design documents in wave. Its also a great note taking tool since for example in class, especially if you have many people working together on the same set of notes. And now to get to the "20% of wasted time", this time is NOT wasted. It is an investment in the companies ability to innovate and also in their employees themselves. Without time to spend on other projects, one starves the creative mind, which is bad for the individual and especially bad for the company as a whole.
- uriel 16y ago
  Google Wave sucked, and was a stupid idea on way too many levels to list (the concept, the technology, and the interface to begin with). But Wave was not a 20% project, and that is probably one of the reasons it flopped, it got over hyped and over engineered in ways that would never have happened if it had been a 20% project.
  - madmaze 16y ago
    I would be very interested in why you believe that Wave sucked. Did you use it? It is the only collaboration tool i know that works well on Windows/Mac/Linux. Yes it has its bugs, and I agree it could be implemented differently. But there is nothing like it, especially when many people want to edit the same document,
  - peterpaul 16y ago
    I also disagree. Google Wave had its flaws, but it is a great idea. It just needs to be finished and developed
    - ahi 16y ago
      Which it won't be, because Google has the resources to write it off as just another experiment that didn't stick to the wall.
eitland 16y ago
Disagree strongly. That said, I do not totally agree with the article. Last time I tried out duckduckgo and blekko, google was still better. Googles word processing and spreadsheets are getting better, and the android phones seems to be the only alternative in the iphone class right now.

p_nathan 16y ago

Agreed. The author seems to have a very bean-counter attitude towards things; I think he is saying, if it's not immediately making money, or can't be shown to be immediately making money, axe it! Real innovation is so radical there is no business case for it until you create demand for it.

mmt 16y ago

The key here isn't innovation, but useful innovation. But the net result of cash cow disease is a waste of brainpower, and a decrease in useful innovation. From what I can tell, there isn't as much of a contradiction as you imply, and the author is merely advocating a spin-off technique for investing in non-core innovation.

evilmushroom 16y ago
And what of the "unuseful successful innovation"? 1) Android is growing like wildfire-- contributes over a billion to revenue last year it was claimed. 2) Google App Engine serves over a billion page load a day. 3) Google Apps? I love it-- etc etc. Spin-off is a technique, but I don't think it's the only way to go.
- mattmanser 16y ago
  The point the article is making is that if Google hadn't entered those markets, someone else would have and done it a lot better. Who's going to seriously invest in an online word processor or spreadsheet with Google apps squatting on the territory? Just MS. Google apps is still pretty basic and they're not operating under commercial conditions, which means potentially the customer is not getting what they actually want. I think in some ways he's wrong, not operating under commercial pressures is not necessarily a bad thing, but Google and Microsoft have recently been extremely weak on following through on promising technology, abandoning projects instead of pivoting. But in Google's case it can be especially toxic, it's then difficult for others to enter those markets as suddenly there's a free competitor. That's not healthy and on that I agree with the author.
  - kenjackson 16y ago
    But in Google's case it can be especially toxic, it's then difficult for others to enter those markets as suddenly there's a free competitor. That's not healthy and on that I agree with the author. But isn't this the grave we've dug for ourselves (as software developers)? We've pivoted the whole market so that software has no intrinsic value on its own? Look at WordLens for example. Mindblowing technology. If you could only get it in a standalone piece of HW the markup would purely be a function of the HW cost. As it is, they started pricing at $5. And as ridiculously cheap that is I can see people saying, "Why isn't it 99 cents?" At this point the horse is out of the barn. The value of your product is no longer the utility of the product, but rather how well advertisers can leverage your audience. Although that makes me think, there's great advertising angles with WordLens since you know what words/signs people are looking at. I freaking went to sleep thinking about that product... sorry for the tanget. :-)
    - mattmanser 16y ago
      I don't really agree with you here, the size of the biggest market they can go after, anyone who takes foreign vacations, is so massive that $5 is fine. By keeping the cost lowish, they're discouraging immediate competition, but can still make a large profit if they market it right. And that video certainly looks like the right marketing to me!
      - kenjackson 16y ago
        I'm sure they'll make plenty of money, no disagreement there. My point is that I don't think they can charge much more than $5. Consumers just don't value software enough to pay that amount. The people that complain about a $10 app w/ this functionality will have no problem paying an extra $20,000 for the top line package on a new car. Or $20 for a T-Shirt. Or will pay an extra $2,000 to upgrade to 1st class on that foreign vacation. For most people software has the value of a Happy Meal prize.
      - kenjackson 16y ago
        BTW, here's a review of the product. http://gigaom.com/mobile/augmented-reality-translations-word-lens-vs-google-goggles/ http://gigaom.com/mobile/augmented-reality-translations-word... read the last line of the WordLens review... "A price cut would also help a lot." $5 is too much to pay for this app! A medium caramel frappucino from Starbucks is almost $5! It just seems like over the past 20 years I've seen this evolution of programmers building intricate valuable product, to now it being generally viewed as disposable crap... even the best stuff. It only has value when coupled with HW or is a service.
- mmt 16y ago
  1) Android is growing like wildfire This was an acquisition. 2) Google App Engine serves over a billion page load a day. Is it profitable? (I'm actually ignorant here.. not snarkiness). 3) Google Apps? I love it-- As do I, but not yet so much to pay for it. Spin-off is a technique, but I don't think it's the only way to go. Indeed, I'm not sure even the author is suggesting it's the only way.
sukuriant 16y ago
What's useful innovation? How do you know it is useful innovation? How long does it take until you discover it's not, if it isn't? What about if it is? Was the pitch line of Twitter good enough for you to consider it 'useful' before it became what it is?
- m104 16y ago
  One of the author's points is that things like Twitter are not being developed and released by Google and Microsoft, despite the massive R&D spending. Furthermore, the only reason why we have Twitter at all is because those founding developers didn't happen to be working for one of the cash cow diseased companies.
  - sukuriant 16y ago
    My point was that, at least to me, twitter sounded like a stupid idea on paper. I was proven wrong, but there are many ideas just like it that you have to implement to see if it's useful. The phrase "try it and see" comes to mind. That's what many of these side projects are for; and, when you have a TON of money to play with, you can go off and throw a few hundred thousand or million at it and not worry about it. If it turns out to be a good idea, then yay! Victory. If not, oh well, you're still making enough outside of that project to cover everyone.
    - m104 16y ago
      Well you'll get no disagreement with me that "try it and see" is a good thing and needs to be funded. What the author is saying, and I take as a very insightful point, is that you're unlikely to efficiently find a project's make-or-break point if you're always awash in cash. Time and resources tend to get used if they are available. Research tends to recommend more research. Delivering a self-sustaining product is hard compared to discovering and exploring within a sandbox. What the "startup" mentality has that the cash cow companies lack is the sink-or-swim pressures that create success or failure from new projects. Market pressures, in other words. Cash cow companies can afford to have many projects in limbo, sucking time and energies away from progressing towards projects that will ultimately succeed. Because cash cow companies (by their very nature) haven't had to develop many successful projects, they tend not to be very good at it. Not only that, but cash cow company executives often become fearful of any line of development that may undermine the cash cow's market performance. When those two factors coexist, you're left with a company that's not only painted itself into a corner, but has also forgotten how to paint. BTW, I think Twitter sounded like a simple idea on paper, but certainly not a stupid one. If a small group of people finds a passionate use case, there are likely others out there who will feel the same.
gvb 16y ago
The author is advocating giving the profits to shareholders rather than investing in innovation. He phrases his "spin off" comment as "let someone else invest in innovation." Cash cow disease costs _stockholders_ untold (sometimes actively buried in accounting maneuvers) dollars. Consider Xbox, which consumed billions (that's with a 'b') before eventually turning a profit of millions (that's with an 'm'). If Xbox had been spun into a separate company, then Microsoft _stockholders_ could have kept those billions (with a 'b') and let _someone else_ decide to invest billions in trying to jump into the game console business. (emphasis mine).
crander 16y ago
You cannot discuss innovation without discussing Christensen's Innovators Dilemma and disruptive innovation. The market incumbent strives upmarket and creates a performance oversupply (a surplus of features in excess of customer demand) which opens space below for a downmarket competitor to disrupt upmarket.

madmaze 16y ago

I completely agree with @evilmushroom and strongly disagree with the article. Especially about the "That allows the company to encourage engineers to waste 20% of their time on "projects", like Google Wave." Maybe I was the one user that really enjoyed using wave, it is a great collaboration tool if you have between 2 and 8 people working on one thing. We wrote entire(60+pages) of design documents in wave. Its also a great note taking tool since for example in class, especially if you have many people working together on the same set of notes. And now to get to the "20% of wasted time", this time is NOT wasted. It is an investment in the companies ability to innovate and also in their employees themselves. Without time to spend on other projects, one starves the creative mind, which is bad for the individual and especially bad for the company as a whole.

uriel 16y ago
Google Wave sucked, and was a stupid idea on way too many levels to list (the concept, the technology, and the interface to begin with). But Wave was not a 20% project, and that is probably one of the reasons it flopped, it got over hyped and over engineered in ways that would never have happened if it had been a 20% project.
- madmaze 16y ago
  I would be very interested in why you believe that Wave sucked. Did you use it? It is the only collaboration tool i know that works well on Windows/Mac/Linux. Yes it has its bugs, and I agree it could be implemented differently. But there is nothing like it, especially when many people want to edit the same document,
- peterpaul 16y ago
  I also disagree. Google Wave had its flaws, but it is a great idea. It just needs to be finished and developed
  - ahi 16y ago
    Which it won't be, because Google has the resources to write it off as just another experiment that didn't stick to the wall.

eitland 16y ago

Disagree strongly. That said, I do not totally agree with the article. Last time I tried out duckduckgo and blekko, google was still better. Googles word processing and spreadsheets are getting better, and the android phones seems to be the only alternative in the iphone class right now.