5 ms·

Google’s attempt to be a modern day Bell Labs was the one thing that set them apart. Make a lot of money in advertising and spend some of it to invent the futu

Google’s attempt to be a modern day Bell Labs was the one thing that set them apart. Make a lot of money in advertising and spend some of it to invent the future. Without the second part, the entire company changes. We need another company to take the mantle: https://www.nytimes.com/2012/02/26/opinion/sunday/innovation-and-the-bell-labs-miracle.html https://www.nytimes.com/2012/02/26/opinion/sunday/innovation...

drawkbox 7y ago
Looks like the product/engineering/creative focused time of Google is giving way to the metric/marketing/MBA/McKinsey people for a fully pedal to the metal push into their Ballmer phase. When will technology/product/engineering/creative companies learn that the value creation is more important than the value extraction? With value creation there is always the ability to value extract. With value extraction the focus, and little research and development or innovative value creation, eventually it stagnates and sputters. The product before the sales/marketing is key. A product of value can always be sold or marketed. You can't sell/market your way to a product. As a developer, and investor, in Google this concerns me the move away from Alphabet, moonshots and research and development. The open mode is needed just like the closed mode [1]. The open mode is where value is realized, the closed mode is where it is produced [1]. Value is created in a state of play or creativity, this is usually the first thing to go in these phase changes at a company. This happens at every company that creates immense value, eventually the research and development is hard to quantify the value so they cut and cut like Shel Silverstein's The Giving Tree, eventually it is just a stump and all the grace and built up value is tapped. [1] https://www.youtube.com/watch?v=Pb5oIIPO62g https://www.youtube.com/watch?v=Pb5oIIPO62g
- LifeLiverTransp 7y ago
  I wish there was some paper that would quantify the dangers of this take over down into hard numbers, so that they could be used in the never ending internal civil wars of value creation vs value-usage. In a ironic way though, this life-cycle reflects what we humans go through though. We have a fragile phase, where we must find our place, develop new things, risk it all, then we settle in, apply the learned things to our conquered niche and set to full cruise mode, to produce turtles eggs, to repeat the cycle. So if a society wants to propell the exploration onwards, there are two ways. Eternal youth, as in never growing fully up, always replace aging elements with new rebelious and clueless young elements. The other, is acclerate the aging &reproduction period. For example allow for Managers, who can proof that there company is stagnant- has a stranglehold on a market, to split a sub-department from the main company (including IP) and thus accelerate the new turtle baby phase.
- Gustomaximus 7y ago
  Value creation is still around but they move from building it to buying it.
- sorenjan 7y ago
  The product people get driven out from the decision making, and history repeats itself. https://www.youtube.com/watch?v=-AxZofbMGpM https://www.youtube.com/watch?v=-AxZofbMGpM
- jariel 7y ago
  This characterisation as business people not creating value is false - MS is mostly a 'business' driven company and they've been growing forever. By every measure, Ballmer was a massively succesfull CEO. He grew income by 3x, moved MS into the cloud, integrated recurring pricing, went full web with MS Office, so many other things. Satya has not done any better in terms of creating more revenue.
- chooseaname 7y ago
  > When will technology/product/engineering/creative companies learn that the value creation is more important than the value extraction? When MBAs stop thinking that every penny has to be returned to investors.
  - pasttense01 7y ago
    Nonsense. MBAs believe the money mostly has to be returned to management--who get paid massive salaries and benefits for often mediocre results.
tootie 7y ago
It's sorta what Elon Musk is doing except he's intending his moon shots to be viable businesses.
- andbberger 7y ago
  Except not really at all. Musk and co have a mandate to be profitable and don't have a vast advertising fortune to fund fundamental research with.
  - hash872 7y ago
    Famously, neither of his companies are even remotely profitable, and he has one of the most prominent reputations in the world to help him raise endless investor funds- either from private investors or retail ones. Both of his companies have been burning cash for close to two decades now! To my understanding SpaceX- which just raised another funding round despite never being profitable for a minute- doesn't even have a realistic path to profitability other than a handwavey 'we'll somehow establish a global wireless Internet from satellites' sort of plan
    - Voloskaya 7y ago
      SpaceX has a very easy path to profitability. They may even be profitable right now. And if they aren't, it's because they reinvest everything in R&D for starship, so if the shareholders decided that they just wanted to make cash on the short term they could just stop reinvestments in R&D and milk the satellite launch market, they are making a profit on every one of those launch and customers are queueing to be on a falcon rocket. As for Tesla, their last quarter was profitable, sure they aren't profitable year over year yet, but saying that 'neither of his companies are remotely profitable' seems pretty far from the reality.
Merrill 7y ago
Not every science project results in a commercially viable product. Remember Bell Labs bubble memories and round lead acid batteries? So it is probably time to sort through the Alphabet ventures, pick the one or two that have a good chance, invest in those, kill the rest, and start some new ones.
- melling 7y ago
  The discovery of cosmic background radiation wasn't commercially viable either. https://www.bell-labs.com/about/history-bell-labs/stories-changed-world/Cosmic-Microwave-Background-Discovery/ https://www.bell-labs.com/about/history-bell-labs/stories-ch...
hooande 7y ago
It's possible that the idea of a Bell Labs is outdated, because individuals now have more access to information and cheap resources than they did in the 50s and 60s. Instead of needing a big company to bring the best minds together and give them money, random people in garages can have good ideas and build proof of concepts relatively easily. Maybe.
- gherkinnn 7y ago
  How many problems can be solved in a garage with little to no infrastructure?
- to11mtm 7y ago
  Ehh, I'm less optimistic about this ever since the changes to US patent law. The guy in a garage has far fewer protections than they used to.
- andbberger 7y ago
  Information may be freer than ever but capital is more concentrated than ever. You can't do much without capital.
- smacktoward 7y ago
  Basic research is still very expensive. The "two guys in a garage" model is about reaping the fruits of basic research, e.g. taking something invented in a lab somewhere and turning it into an actual product. Take away the labs, though, and you're taking away the seeds that the people in the garages plant, water and serve up on plates.

drawkbox 7y ago

Looks like the product/engineering/creative focused time of Google is giving way to the metric/marketing/MBA/McKinsey people for a fully pedal to the metal push into their Ballmer phase. When will technology/product/engineering/creative companies learn that the value creation is more important than the value extraction? With value creation there is always the ability to value extract. With value extraction the focus, and little research and development or innovative value creation, eventually it stagnates and sputters. The product before the sales/marketing is key. A product of value can always be sold or marketed. You can't sell/market your way to a product. As a developer, and investor, in Google this concerns me the move away from Alphabet, moonshots and research and development. The open mode is needed just like the closed mode [1]. The open mode is where value is realized, the closed mode is where it is produced [1]. Value is created in a state of play or creativity, this is usually the first thing to go in these phase changes at a company. This happens at every company that creates immense value, eventually the research and development is hard to quantify the value so they cut and cut like Shel Silverstein's The Giving Tree, eventually it is just a stump and all the grace and built up value is tapped. [1] https://www.youtube.com/watch?v=Pb5oIIPO62g https://www.youtube.com/watch?v=Pb5oIIPO62g

LifeLiverTransp 7y ago
I wish there was some paper that would quantify the dangers of this take over down into hard numbers, so that they could be used in the never ending internal civil wars of value creation vs value-usage. In a ironic way though, this life-cycle reflects what we humans go through though. We have a fragile phase, where we must find our place, develop new things, risk it all, then we settle in, apply the learned things to our conquered niche and set to full cruise mode, to produce turtles eggs, to repeat the cycle. So if a society wants to propell the exploration onwards, there are two ways. Eternal youth, as in never growing fully up, always replace aging elements with new rebelious and clueless young elements. The other, is acclerate the aging &reproduction period. For example allow for Managers, who can proof that there company is stagnant- has a stranglehold on a market, to split a sub-department from the main company (including IP) and thus accelerate the new turtle baby phase.
Gustomaximus 7y ago
Value creation is still around but they move from building it to buying it.
sorenjan 7y ago
The product people get driven out from the decision making, and history repeats itself. https://www.youtube.com/watch?v=-AxZofbMGpM https://www.youtube.com/watch?v=-AxZofbMGpM
jariel 7y ago
This characterisation as business people not creating value is false - MS is mostly a 'business' driven company and they've been growing forever. By every measure, Ballmer was a massively succesfull CEO. He grew income by 3x, moved MS into the cloud, integrated recurring pricing, went full web with MS Office, so many other things. Satya has not done any better in terms of creating more revenue.
chooseaname 7y ago
> When will technology/product/engineering/creative companies learn that the value creation is more important than the value extraction? When MBAs stop thinking that every penny has to be returned to investors.
- pasttense01 7y ago
  Nonsense. MBAs believe the money mostly has to be returned to management--who get paid massive salaries and benefits for often mediocre results.

tootie 7y ago

It's sorta what Elon Musk is doing except he's intending his moon shots to be viable businesses.

andbberger 7y ago
Except not really at all. Musk and co have a mandate to be profitable and don't have a vast advertising fortune to fund fundamental research with.
- hash872 7y ago
  Famously, neither of his companies are even remotely profitable, and he has one of the most prominent reputations in the world to help him raise endless investor funds- either from private investors or retail ones. Both of his companies have been burning cash for close to two decades now! To my understanding SpaceX- which just raised another funding round despite never being profitable for a minute- doesn't even have a realistic path to profitability other than a handwavey 'we'll somehow establish a global wireless Internet from satellites' sort of plan
  - Voloskaya 7y ago
    SpaceX has a very easy path to profitability. They may even be profitable right now. And if they aren't, it's because they reinvest everything in R&D for starship, so if the shareholders decided that they just wanted to make cash on the short term they could just stop reinvestments in R&D and milk the satellite launch market, they are making a profit on every one of those launch and customers are queueing to be on a falcon rocket. As for Tesla, their last quarter was profitable, sure they aren't profitable year over year yet, but saying that 'neither of his companies are remotely profitable' seems pretty far from the reality.

Merrill 7y ago

Not every science project results in a commercially viable product. Remember Bell Labs bubble memories and round lead acid batteries? So it is probably time to sort through the Alphabet ventures, pick the one or two that have a good chance, invest in those, kill the rest, and start some new ones.

melling 7y ago
The discovery of cosmic background radiation wasn't commercially viable either. https://www.bell-labs.com/about/history-bell-labs/stories-changed-world/Cosmic-Microwave-Background-Discovery/ https://www.bell-labs.com/about/history-bell-labs/stories-ch...

hooande 7y ago

It's possible that the idea of a Bell Labs is outdated, because individuals now have more access to information and cheap resources than they did in the 50s and 60s. Instead of needing a big company to bring the best minds together and give them money, random people in garages can have good ideas and build proof of concepts relatively easily. Maybe.

gherkinnn 7y ago
How many problems can be solved in a garage with little to no infrastructure?
to11mtm 7y ago
Ehh, I'm less optimistic about this ever since the changes to US patent law. The guy in a garage has far fewer protections than they used to.
andbberger 7y ago
Information may be freer than ever but capital is more concentrated than ever. You can't do much without capital.
smacktoward 7y ago
Basic research is still very expensive. The "two guys in a garage" model is about reaping the fruits of basic research, e.g. taking something invented in a lab somewhere and turning it into an actual product. Take away the labs, though, and you're taking away the seeds that the people in the garages plant, water and serve up on plates.