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Google suffers from a digital petro curse
- parhamn 6y agoPeople and companies peak for one or two generations at most. What happens long before the petro issue described here is people generally stop giving a fuck. There are few organizations that make it past any long range of time and when they do they’re well past their hay day, whether is Std Oil, Dutch East India, Exxon ,etc. Folks at Basecamp will lose their steam similarly when DHH leaves too and stops giving a fuck. It’ll happen to Apple, Amazon and Google. It’s the natural cycle.
- criddell 6y agoThere are exceptions but it is hard to think of many. Nintendo, for example, is 120 years old.
- bombcar 6y agoNintendo as everyone knows it is only a few decades old; a company can continue to exist for centuries if it becomes simply a "holding company" (Berkshire Hathaway is just a mutual fund, basically) or otherwise reinvents itself.
- detuur 6y agoNintendo as a company is 120 years old. Nintendo as a video game company is 50 years old, more or less. The reason why it's held on for so long is not its brand , it's their properties. Nintendo is essentially the Disney of the video game world; they own immensely popular pop-culture trademarks which they can rehash and reboot over and over and over again. Nintendo isn't a tech company, they're a publisher which so happens to publish their properties mostly as games, and do a remarkably good job of producing consoles which you need to buy to enjoy their properties. This is why they'll still be around in 100 years, and Microsoft and Apple most likely won't.
- phone8675309 6y agoAlso, much like Disney, Nintendo is notoriously awful to its third party artist/developers and they are very litigious about fan art projects.
- criddell 6y ago> Nintendo isn't a tech company I wasn't restricting myself to thinking about tech companies. > This is why they'll still be around in 100 years, and Microsoft and Apple most likely won't. You never know. Just like Nokia once made rubber boots, maybe 100 years from now Apple and Microsoft will be doing something entirely different than now. That's my point - companies survive by adapting.
- 2sk21 6y agoThere is also the issue of pay and a sense of having enough. Many tech workers are very highly paid. At some point, you have enough money so you don't really have to work. I myself reached "my number" last year and retired. My guess is that there must be many more people like me who will be retiring early in the future.
- metalliqaz 6y agothat doesn't jive with reality as I see it. for most people, any number is never enough, it would seem
- mensetmanusman 6y agoAccording to self-reported income satisfaction levels across all classes, almost everyone thinks that if they only made 10% more, then they would be set. This creates the hilarious situation where most millionaires in the US don’t subjectively feel wealthy. Because we are taught that our subjective feelings are the truth, this creates an interesting political situation where we have a built-in assumption that no one will ever be satisfied.
- xyzzy123 6y agoHere in Australia, being a millionaire just means you finally paid off your mortgage. :/ If you are supporting a family, you probably still can't stop working. If you've got no dependents and you're willing to go lean you could sell up, head out to the sticks and live off your capital. It would not grant you a lifestyle conventionally described as "wealthy" but you'd be doing OK. Or am I just in the trap?
- cashewchoo 6y agoNo, I think this is the same way in much of the US. Millionaires are just skilled labor around age 35-40 (depending on a lot ofc). And you're going to need about 4x that to retire, depending on the kind of lifestyle you want. It's expensive as hell to do the whole "2.5 kids, a house, and 2.5 college tuitions" thing while still having a life of your own. I also realize this comes from a place of privilege (many people can't even really expect to ever retire, much less retire comfortably or lavishly). The middle class has really eroded away to basically not having any lower or middle segment. You're either working poor (whether you self-identify that way or not) or you're upper-middle-class (where you might start to externally seem "rich" but if you lose your job you still have to find another one pretty fast.)
- maurys 6y agoGoldman Sachs is 150 years old and still kicking. I wonder if a part of that longevity is the org/incentives structure. And (cynically) maybe just that regulation entrenches existing finance players and there isn't anywhere near as much anti-trust conversation over there.
- marvel_boy 6y agoSo true. Again and again.
- simonebrunozzi 6y ago> Why spend the executive energy really nurturing something new to life over multiple years when you can just turn the screws on your dominant internet advertisement winch a few more degrees to make the quarter? Because, in theory, antitrust should prevent Google from obtaining market dominance, and therefore differentiation is necessary at that scale. In theory.
- izacus 6y agohey.com is a competitor to Google's GMail services right?
- theshrike79 6y agohey.com is a competitor to Gmail like the Lamborghini Aventador is a competitor to the Toyota Corolla.
- izacus 6y agoCan you explain? I never really tried Hey.
- ron22 6y agohttps://world.hey.com/jason/an-alternative-to-competition-ff57f4bc https://world.hey.com/jason/an-alternative-to-competition-ff...
- throwaways885 6y agoSigh... I remember the days when Gmail was considered a power user tool. Sad how far it's fallen.
- Gys 6y agoToyota Corolla sales are seriously higher than the Lamborghini Aventador.
- throwaways885 6y agoThat's the point of the analogy.
- atonse 6y agoI haven't used hey.com but reading various people's reactions (and how those opinions changed over time) this analogy is more real than you probably realize. Like a Lambhorgini, it's very fancy, absolutely excellent first impression. You're impressed. And then a few weeks later it becomes the new normal, and you are more hobbled by things like how low the car is, how limited you are in driving it, how nothing else fits in the car. A few people have gotten tired of hey.com already because it is too controlling. Again, I actually haven't used it myself so I don't want to just state these as facts, I just thought the analogy was even more apt.
- justincormack 6y ago"Dutch Disease" https://en.wikipedia.org/wiki/Dutch_disease https://en.wikipedia.org/wiki/Dutch_disease is the usual term. Although arguably corruption and kleptocracy are more problematic in resource rich nations, and the Dutch did ok.
- backport 6y agoDid they? I'm under the impression that it's a small country with a distinct upper class. The right people live in Wassenaar and Bussum etc. with ludicrous property prices and have all the influence. They are good at camouflaging inequality and other things. The lower classes get enough to get by, so it isn't obvious. The rich don't brag, wear cheap suits and look like regular people. But the old-money royalty is obvious, and probably just very good at hiding corruption.
- Ozzie_osman 6y agoCan you expand on this? It's the first time I've heard the Netherlands described this way (corruption and inequality) Most lists I've seen rank the Dutch as having low levels of inequality and high standards of living.
- marcusklaas 6y agoThat looks similar, but it's not the same phenomenon that is described in the article. The Dutch disease is based around currency appreciation making industry less competitive. Google is not a nation with its own currency (yet?).
- Crash0v3rid3 6y ago> Google won't get back to the mojo that gave us search, gmail, and maps before the petro curse is cured. HN may have differing opinions, but Google’s Cloud business is likely their next big business. They’ve been growing quite rapidly, I doubt it will join the graveyard.
- ocdtrekkie 6y agoGoogle Cloud is fourth in it's market. Sure, there's room for everyone to grow right now, but... they're not winning here.
- bilal4hmed 6y agowho is #3 ? I thought it was AWS Azure GCP
- tester34 6y agoIBM Cloud /s Oracle Cloud /s Alibaba Cloud? OVH?
- bilal4hmed 6y agoAlmost every article except for 1 lists GCP as #3 https://www.bmc.com/blogs/gartner-magic-quadrant-cips-cloud-infrastructure-platform-services/ https://www.bmc.com/blogs/gartner-magic-quadrant-cips-cloud-...
- tester34 6y agoThat was not snarky "?" that was just consideration :P
- bilal4hmed 6y agoaah no worries about that, I didnt take it as snark :) I was asking the original OP since almost everywhere I had seen them as #3.
- nathanyz 6y agoCompany actions are always going to line up with incentives. And that means in an advertising based company, well the actions will line up with generating more ad revenue. Through and through their business is advertising revenue.
- mmcconnell1618 6y agoThe subscription sign up form at the bottom of the page is rotated by -1 degree. It may be designed to catch my attention but it just drives my OCD side crazy. Anyone else notice that?
- dvfjsdhgfv 6y agoYeah, it activates your OCD and disturbs my CN X.
- rafaelgarrido 6y agoI wonder if the A/B tested this UX. I am inclined to do not use that form and, honestly, took me a moment to realize that was an actionable card.
- iujjkfjdkkdkf 6y agoHaha yes, saw it on my phone and had to hold it back from my face and rotate it back and forth to make sure it wasnt just my imagination.
- maxehmookau 6y ago> Just earlier this month, Google rang the death notice on Stadia I keep seeing this, and it isn't true. (Not yet at least.) Google shut down its game studios (which never released anything anyway), but is continuing to support 3rd party developers releasing their games on Stadia.
- GVIrish 6y agoThe fact that they have up on their first party studio means the clock has been started on a shutdown. If Google sends the signal that their first party Stadia studio is a lost cause, what signal does that send to the third party developers? Google didn't have the patience for their own studio to bear fruit, so it doesn't bode well for them to have patience with the platform, much less invest in it.
- ruph123 6y ago> [...] what signal does that send to the third party developers This but also: what signal does this send to the consumer to whom Google abandoning services is already a running joke. Would anyone knowing about this now buy a game on Stadia that they can only play on that very shaky platform?
- phone8675309 6y agoThe shutdown of the first party studio sends a signal, but the freezing of the Google account for the Terraria lead developer to the point where the Stadia port of Terraria was cancelled sends an even stronger signal to indie developers who were considering Stadia - Google does not support you, you are a digital sharecropper, and you'll take what you're given and like it or buzz off.
- d3nj4l 6y agoA minor correction: the stadia port of terraria is still alive and kicking.
- kyrra 6y ago(Googler, opinions are my own) Note: Terraria for stadia is uncanceled[0]. Sadly, Terraria devs nor Google has said anything about what happened (in any kind of detail), but accounts were unlocked and game is back on. [0] https://forums.terraria.org/index.php?threads/terraria-state-of-the-game-february-2021.103428/ https://forums.terraria.org/index.php?threads/terraria-state...
- c7DJTLrn 6y agoLove that 'petro curse' analogy. It makes me wonder where else it applies - where else that easy success in one domain prevents success in another.
- meheleventyone 6y agoThis is pretty common in games companies that have a cash cow that provides a good income then they struggle to release anything else.
- rand49an 6y agoValve seems to be a good example of this.
- valiant55 6y agoNike's FuelBand is the first one the comes to mind. Why make a wearable with (maybe) low double digit percentage margins when shoes just rake in money?
- TuringNYC 6y ago>> Why make a wearable with (maybe) low double digit percentage margins when shoes just rake in money? Because it is a complement to your shoes and drives more sales of your shoe brand specifically. (Unfortunately, that band-shoe integration didnt arrive in time.) Same way as AppleWatch+iPhone (vs AppleWatch+Android)
- tomekjapan 6y agoIt's like Google is running its own business incubator. I wonder how Google practices and success rates compare to VC funding for startups. What is the distribution of lifetime of VC funded startups before the money supply gets cut off compared to Google projects?
- numbsafari 6y agoI often wonder if it's less Google running a business incubator and more a combined retention and PR program. Running these projects helps them retain talent, and it helps them create a lot of talk about stuff they are doing that isn't tracking your every move and invading your privacy.
- tomekjapan 6y agoStill would be interesting to know whether it's more likely for a Google project to survive than it is for a startup.
- motohagiography 6y agoSuper smart view. What's worse is when google (or other FAANGs) gets into a new product area, it in-effect suppresses development in the marketplace because very few people are brave/stupid enough to challenge a trillion dollar behemoth. Nobody wants to say it, but Google is basically internet government at this point, and when government starts building products instead of just directing traffic, it's going to be anti-competitive and destroy opportunity in general. How do they get out of the way and benefit while enabling growth? Move everything new into Ventures and whatever products survive on their own should be taken public in the markets and vertically dis-integrated from advertising and search. If they want to create growth, they're going to need to open it up to public markets, otherwise, they're going to be an anti-competitive monolith. It's not a charity, and it will still make bazillions, but leveraging their incumbency means they are both risk averse themselves and opportunity destroying for everyone else.
- izacus 6y ago> Super smart view. What's worse is when google (or other FAANGs) gets into a new product area, it in-effect suppresses development in the marketplace because very few people are brave/stupid enough to challenge a trillion dollar behemoth. Is that actually true though? Googles forays into many markets were usually so horrible and clumsy that better companies could just use the media attention garnered to push their superior products. Most Google beta products usually lack fundamental features, are geoblocked and completely ignore user voice. I haven't seen many of them really thrive over their better managed competition.
- badRNG 6y agoI think the concern is best understood with products like Chrome, AMP, and Android, not these ephemeral ventures Google typically likes to do.
- smnrchrds 6y agoI am sure not everyone agrees with me, but I believe Google single-handedly killed RSS by first creating Google Reader and using their power to make it ubiquitous and then killing it when there was no competition left.
- whitepaint 6y agoDo people forget the powerhouses that Youtube, Android, GCP, Gmail, Chrome, Google Maps, Chromebooks are (plus gazillion smaller companies like Waymo that have insane potential)? People have been predicting the downfall of Google for a very long time now and yet they have never been bigger growing every year at astounding rates.
- giarc 6y agoI think people love to look at the products they've discontinued, and they have discontinued a lot, but they fail to point out all the products that have stuck around. I think it's likely a result of a company trying a lot of things rather than a company that can't focus like the author implies. People don't talk about Facebooks failed products like email, dating, phone, beacon, portal etc.
- eru 6y agoPortal has failed? That's a shame.
- evad3r 6y agoIs that likely due to a lot of those niche Facebook products simply launching to very little hype? Or simply only launching to a very select audience for essentially testing purposes? I remember hype around the Facebook Phone and Facebook Email, but that's about it really. Email didn't really feel like a death either as the rest of Messenger continued to evolve to what it became today.
- rojcyk 6y agoI don't think so, people are def aware of these projects. The problem is the stuff you mentioned (at least YT, gmail chrome, maps) are in a pretty rough spot. And while Waymo might have an insane potential, it is just that, a potential.
- sbergot 6y agoYoutube and chrome are still largely dominating their market. Can you expand on those?
- splitrocket 6y ago"Google won't get back to the mojo that gave us search, gmail, and maps before the petro curse is cured." - DHH Search, email and maps are essentially all search products, just with different domains, that's why google invests in them.
- tlogan 6y agoI do not think this is the correct view. Google is an ad company and they are constantly improving that part of business. They are not standing still in that space. And, sadly for us, Gmail, Android, Chrome and YouTube are critical pieces for ads business. Yeah, they spend some money to build random things but that is just that lay people have illusion that Google is not an ad company - ie they are inventing something. In short, releasing these products is necessary so that there is a perception that Google is not an ad company.
- thesausageking 6y agoThis reads like bitter grapes. One of Google's new products (Google Cloud) does more than 100x in revenue more than Basecamp and it's likely growing much faster too. Android is on billions of handsets. Chrome is the most popular browser. These are all new, non-search products.
- Accacin 6y agoAnd there's a great reason that they haven't got rid of Android and Chrome I guess. Maybe it's all that data they can harvest to better their advertising business.
- thethimble 6y agoOh and then there’s YouTube, Maps, Docs/Drive, GSuite/Workspace, Classroom, Chromecast, etc. And also Tensorflow, Flutter. It’s definitely sad to see some products shut down. But it seems that that’s a natural consequence of experimentation. And I’m grateful for so many of the experiments that ended up sticking around.
- mshron 6y agoAgreed that Docs, Drive, GSuite are all a real enterprise businesses YouTube though is video ads, and Maps is local ads. I think that reinforces the author's point. (Open source projects like Tensorflow, Flutter, K8s are nice spin-offs but they're not going to command the same amount of attention or resources as revenue-generating products.)
- hpcjoe 6y agoI'd add to that, from a recollection when my old company signed up for Gsuite many moons ago, you give them the right to use your emails, documents, etc. to help them train their models. Which is all about improving their actual product. Maps knows where you are and where you (regularly) travel. I get email updates from Google on this. Drive enables you to work on documents and files, and provides this implicit access to google to provide them training data (unless they changed that clause of the user agreement). While Gsuite is an "enterprise" product, that you pay for (and I did, for years), getting "support" out of google was damn near impossible. This seems to be a common theme with them. They stand something up, put up FAQ pages which don't cover what you run into, don't have a human you can contact, or a site you can email, or a ticket system you can report a problem into ... and leave you to figure out workarounds on your own. And, should your data masters decide that you are a bad company in any way, shape, or form, you can be completely removed from (all) their platform(s), with absolutely no recourse. Put another way, it is a huuuuuge risk to use them for anything in the critical business services path. FWIW, Microsoft seems to know how to sell/support services. Doesn't matter if their stuff is inferior in many regards, you can reach them if you have a problem. Though, quite likely, they can pull the plug on you quickly as well. But they are far more business friendly than google.
- m000 6y ago> Why bother investing in other industries when you can make so much money from shit that's literally spouting out the ground? You have to be extraordinarily disciplined and well-functioning prior to finding such riches, if you are to stand any chance. Google has never been either. But is this really a matter of discipline or being well-functioning? I believe that this kind of behavior is to be expected on any publicly-traded company, given the pervasiveness of the Friedman Doctrine. I.e. if the company is run to maximize the shareholder value, it becomes extremely hard for executives to justify support for any product, if the profits/benefits it provides cannot be quantified as shareholder profit.
- deleted 6y ago[deleted]
- thaumaturgy 6y agoThis is what eventually killed RadioShack [https://www.bloomberg.com/news/features/2015-02-02/inside-radioshack-s-slow-motion-collapse https://www.bloomberg.com/news/features/2015-02-02/inside-ra...]. They found easy recurring revenue from cell phone sales and that nectar was so sweet that they couldn't justify the effort required to spend time at anything else in the garden. Then, wireless carriers all opened up their own stores and mall kiosks and suddenly RadioShack didn't have a business left. Google isn't going to suffer this fate anytime soon though. RadioShack's peak revenues were $6.3 billion in 1996. If you crudely model a company's trajectory as a parabola in a gravity well, that $6.3 billion allowed RadioShack to coast through the air for another 20 years. Google has about 30x the revenue, and they have significant influence in multiple and related segments of the internet market. Google could, tomorrow, make changes to email policy which would leave hey.com dead in the water, because between 40% and 60% of email traffic goes through Gmail, and email is extraordinarily sticky. If you can't send or receive email to Gmail users, Gmail users will tell you it's your fault, even if it's not. (Speaking from experience here.) Chrome likewise is hovering around 65% market share. If Google decides they no longer want to tolerate ad-blockers, they can make a subtle change to Chrome that will boost their search engine revenues significantly (where they currently own about 91% of the search market). Google's not going to follow a RadioShack trajectory, but they're never going to be anything other than an advertising company either, and that's going to leave some opportunities available for startups in Google's market.
- Ozzie_osman 6y agoParts of the analogy are true: over dependence on a single source of lucrative revenue can make it hard to invest in new things. That said, the analogy breaks down. Petro-states have other issues: weak institutions, corruption. Their lucrative revenue steam, unlike online ads at least so far, is also very volatile with boom and bust cycles. It also creates all sorts of weird economic distortions, like exchange rate effects that make it hard to invest in other industries. And finally, GCP, Waymo, Android and many others beg to differ. Yes, Google still depends primarily on Ads, but it's far from being the Venezuela or Iraq of companies.
- tw04 6y ago>GCP GCP is still flailing around trying to find solid ground. After multiple fits and starts, with Kurian at the helm they're at least making an attempt to attract enterprises, but their inability to commit to a product in the consumer division has ABSOLUTELY tarnished their reputation with the enterprise. >Waymo, Android Waymo and Android have only survived because they feed the advertising beast. Don't kid yourself into believing either one would still exist if they didn't. The reason google can't make a decent messaging app is because by definition, people want their messages to be private. Google can't data mine and let you have privacy - it's why allo literally died DURING the product announcement because someone caught wind that they were going to do encrypted chats that couldn't be data mined. And instead they're trying to push RCS - without encryption - that nobody wants besides them and the mobile companies who also want to data mine. Everything about a petro state seems to apply here. As for google not having weak institutions and corruption, I'd say they just do a better job of covering it up than most petro states. See: Andy Rubin.
- Ozzie_osman 6y agoAndy Rubin case is horrendous, but it's a different type of corruption. Petro corruption would be siphoning money off to personal accounts, kick backs, etc. Anyway, petro states depend on a single source of depletable revenue. They even fail at all attempts to expand up the value chain around services or refining of their oil. Even if Google's only successes are around furthering their ads revenue, that's still a far cry from petro states.
- haltingproblem 6y agoTake the Petro curse analogy to its logical conclusion. You get interesting conclusions about Google's internal political economy and the incentives of its employees when faced with the Adsense machine and the profit it spews. Adsense/Adwords spews tens of billions of dollars in profits every year. No new product launch can come to close moving the needle on revenue or profits for Google. Google's political economy incentivizes groups to build new products not for their revenue streams but to claim larger bonuses of the ad-revenue pie. The users who buy into these "new" products are just cannon fodder in that game. Remember Google+? Vic Gundotra made off with probably tens of millions or more to launch a failed product because it was seen as strategic for Google. Anything and everything in Google happens as an internal battle between groups jockeying for bigger share of the adsense/adwords pie. We are just pawns in the game. I can't believe I am saying it but almost anything MSFT releases in response to Google or competitors is inferior but MSFT's products are preferable due to implied longevity. MSFT has inoculated themselves against this parasitic political economy while Google's users are held hostage by it. Most Google project launches are akin to MBS's dreams to turn Saudi into a tourism/research/commerce powerhouse. Brand new Cities in the desert etc. They would have more success dumping cash into the ocean and catching the fish that come to feed on the paper. Ditto for google.
- hpcjoe 6y ago"I can't believe I am saying it but almost anything MSFT releases in response to Google or competitors is inferior but MSFT's products are preferable due to implied longevity. MSFT has inoculated themselves against this parasitic political economy while Google's users are held hostage by it." Yes, precisely. MSFT spent the better part of 50 years honing its selling strategies to companies, and knows how to deliver products. They may suck (and they do), but you know if you build upon them, they will not (generally, with few exceptions) disappear tomorrow. You simply cannot have that faith with google. Gmail, could literally disappear at any moment. How screwed over would we all be if that happened? It won't, because it is the gift that keeps on giving with regards to intelligence gathering. For their real product.
- haltingproblem 6y ago
- kylecordes 6y agoI enjoy a lot of what DHH writes, but I suspect the main explanation for Google product churn is less Google's choice (to the extent it makes sense to anthropomorphize a giant organization) than he ascribes. There are all these smart people making things, inventing projects, coding, optimizing, etc. Google hires them, and they make things at Google. Google could fire them, directly reducing the churn. Or Google could change its incentives, take away the internal rewards for making new things. Either way, that would push smart people out, and they take their knowhow and understanding of how to google-scale with them. What helps Google more? All that innovation happening inside Google, even though many products get discontinued? Or having all those folks wander out, raise some capital, and 1% of the time their effort ends up seriously disrupting Google’s core businesses? My theory is: this kind of thing happens inside Google, and inside other tech giants (perhaps less visibly), because it is the closest there is to a sustainable equilibrium. Pay a lot of really smart people high salaries to keep them around, making things, rather than disrupting from outside.
- gumby 6y agoYes, the same is true for a company like Valve: there's a nozzle that cash just comes pouring out of not matter what they do. Thus they struggle to put out new games, typically having to acquire them. This covers up the problems with their organizational structure. This comes off as criticism, but it's not intended as an insult. Simply dispassionate. It's a great problem to have...for a while.
- ketamine__ 6y agohttps://mobile.twitter.com/dhh/status/1368957511118843908 https://mobile.twitter.com/dhh/status/1368957511118843908 @dang Is this happening?