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Having read hundreds of these sorts of CEO leaving letters I'm a bit jaded and cynical. If you're interested in what I see when I read that message, I rewrote i

Having read hundreds of these sorts of CEO leaving letters I'm a bit jaded and cynical. If you're interested in what I see when I read that message, I rewrote it[1] in more plain language. Google demands a lot of its "other bets" companies. Some might say it asks too much. Mostly it seems to me that they want a 'moonshot' company that has the original profitability of search advertising, full stop. And while it would be great for them if they found it, there is a lot to be said for having a bunch of businesses that just make anywhere from a few million to a billion dollars a year in revenue. I don't know if the attitude has changed since I was there but people creating $20M/year business revenue streams were not considered "successful" back in the day. I found that somewhat self defeating. [1] https://gist.github.com/ChuckM/ff5fc8c800c7fe9160483b68ec45aac9 https://gist.github.com/ChuckM/ff5fc8c800c7fe9160483b68ec45a...

iJohnDoe 6y ago
Your rewrite was extremely well done. It’s too bad CEOs don’t write their PR like you have done. Like when they drive companies into the ground, lay everyone off, and then they exit with millions.
- karljtaylor 6y ago
  they do, it just usually gets re-written to hell in about 30 very anxious email rounds
- muskrat_wire 6y ago
  that's capitalism
TheMagicHorsey 6y ago
This is the funniest thing I've read in a while. And potentially true.
jpm_sd 6y ago
This is fantastic. You accurately describe the Other Bets climate when I left X in 2015, and I hear it's even worse these days from friends who recently left when Loon shut down.
lumost 6y ago
I swear that there is a resource curse for businesses with a singular "successful" product line. In order to expand the business and not have people sucked into the "successful" part, the teams need to be split. Once the teams are split the "successful" team wonders why the "new" team sucks. In the case that the successful business is Ads/Search... it's tough to compete. I'd imagine even within Ads/Search there is a resource curse between AdX/AdWords/Youtube and every other ad business.
- liaukovv 6y ago
  Sounds to me like what they shoukd be doing is instead of trying to "reinvest" profits from ads instead pay them out to shareholders so they can more efficiently redistibute it to multiple smaller businesses
  - KirillPanov 6y ago
    But that would shrink the empire. The kind of people drawn to "chief" positions are not interested in shrinking their empires.
  - tehlike 6y ago
    They are doing share buybacks which is usually deemed more tax efficient.
  - pclmulqdq 6y ago
    That is exactly what they should do, but the fact that a majority of voting shares are held by 2 managers makes the company have a huge conflict of interest that favors growing more and more rather than pulling cash out.
- csours 6y ago
  Are you familiar with the Innovator's Dilemma? Because it sounds like you're describing it. https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma And yes, splitting is part of a solution. I think discipline is another part.
ilyaeck 6y ago
Nice rewrite, now I no longer need to bother reading the original!
dealforager 6y ago
I understand the sentiment, but $20M/year really is a waste of time for a $200B/year business. I have a hard time thinking of a way it wouldn't be a loss given the added organizational complexity having those kinds of projects would bring. I thought the entire purpose of "other bets" was to pursue ideas that have the potential to become $XXB/year revenue streams. So of course they want 'moonshot' companies.
- solutron 6y ago
  I give it less than 5 years before Google offloads or shutters Waymo entirely.
- cobookman 6y ago
  How many XXB/year companies start off making XXB/year or have clear visibility to XXB/year near-term? For example, I doubt the AirBNB founders early-on and/or 5-10 years ago even imagined they'd have multiple billions of revenue.
- ChuckMcM 6y ago
  > $20M/year really is a waste of time for a $200B/year business. That's the thing though, it isn't a waste of time. One can hear very similar logic from people with investments. They will say "The stock market is returning X% / year and is way better than those bonds with only 3%/year. Investing in bonds is a waste of time." They say that because they have yet to internalize the value of having a diversified their investments. Not everything goes up all the time. It only makes sense for Google if the Search Ads business were to never ever lose its profitability. And yet, it is losing its profitability. As a result, Google has to aggressively cut back on expenses, remove projects, end of life products, etc as that cash cow slowly deflates. Consider then the alternative where there are 10, 20, even 30 business lines within Google generating $10 - $30M of profit each. 30 businesses at $30M is only $900M, less than 5% of their revenue, but those businesses are SOLID and provide a supply of management talent, consistency, and some bucks to keep the lights on elsewhere. That is diversification of execution risk. It works the same way investment diversification works, it adds other, less high margin, businesses to the portfolio that are all revenue positive. A company like Google can use those businesses to experiment with alternate user support models, management schemes, policies, and communications. All of that helps the "main" company to mature in its thinking about how to be a business. Sadly, executives who have never had any experience other than one wildly successful business tend to think exactly like you do, "Why would I waste time on piddling little products when I've got more cash than I know what to do with being pumped out by my main business?" Short answer: "Things change."
petra 6y ago
Maybe businesses don't need revenue streams. I wonder by how much the Moonshot program, increased Google's Market Cap.
- ChuckMcM 6y ago
  This is a fair question. After all, an increase in market cap means, as execs, you're paper wealth is that much greater. The challenge is that market cap isn't durable. Specifically businesses that just provide net revenue, even if it is only a "small" amount relative to the overall company, are helpful in mitigating shocks to the market. So it may be intoxicating that the stock going up 10% adds a few billion dollars to your net worth, but it can also go down 10 or 20% and that wealth goes poof![1] [1] The reality is that paper wealth is not worth anything, only after it has been diversified can you really count it as part of your net worth. Again, this is my lived experience :-).
  - petra 6y ago
    The Moonshot program created a lot of optimism about Google for many years. Over that long time, I'm sure there are benefits for the executives' personal stock(don't CEO's diversify every few years?) , and for Google in general(for ex. Better talent).
recuter 6y ago
I am 32. I Could have written this 7 years ago. I no longer accept job offers at any salary in this industry. In fact, all my emails and communications are written in this style all the time with everyone - what shall I do now wise one? (serious question) You wanna start a band or whatever. Maybe we can start like an Elks club thing?
- ChuckMcM 6y ago
  Are you the CEO or the non-executive employee? One of the reasons I put my email in my profile is that it brings me interesting questions. :-)
  - recuter 6y ago
    I'm gainfully unemployed and like Luke you can't make me go back! I've job hopped looking for a place where people don't engage in the Kabuki but apparently all the worlds a stage. Maybe I'll make one of those lil ships in a bottle this year.
    - ChuckMcM 6y ago
      Perhaps you will find, as I did, that the secret here is having a purpose. I know a number of people in the same situation, they don't "have" to work but when they don't have full time employment they just kind of wander this way and that. This becomes a problem when they realize that there is no 'win' in life, you just die. So the time wasted wandering is just that, time they never had to truly live. Given my experience and my interest in systems I have become something of a 'journeyman' engineer in the traditional sense. I like helping folks and I like figuring things out. I charge money for that because it weeds out the freeloaders but I don't charge a lot of money. My terms are that if its not working out, we'll part friends, but we will part. As a result I've managed to meet some manager types whose only tool in their manager toolbox is "I'll fire you if you don't do that." (which is a pretty weak toolbox). It is an exceptional thing to be where you are, at the age you are. How you choose to spend the years can be very satisfying and impactful, or a source of anger and regret.
mohon 6y ago
Could you also translate the last section too? Would love to read that as well
- ChuckMcM 6y ago
  "Please don't hate me." ?
  - moonchild 6y ago
    What about the response?
    - ChuckMcM 6y ago
      Probably some error in my filters but I checked it twice and couldn't find any actual semantic content :-)
axaxs 6y ago
Man, this is spot on and great insight. I'd love if people were really free to be so honest without repurcussion. Thanks for doing it.
craftinator 6y ago
> I don't know if the attitude has changed since I was there but people creating $20M/year business revenue streams were not considered "successful" back in the day. I found that somewhat self defeating. It's the "I stumbled onto this giant pile of cash, and if you don't stumble onto one too, you obviously aren't stumbling hard enough" attitude of management.
choppaface 6y ago
“Mostly it seems to me that they want a 'moonshot' company that has the original profitability of search advertising, full stop.” Well, when Larry page wrote “we also like that it means alpha-bet”[1], a lot of readers in tech probably mistook him at his word. When it comes to investing, “alpha” means winner. As in somebody else loses. As in what gets optimized is _the investor_, not necessarily the community. The analogy to investment return above benchmark is a trademark Googley delusion—- it’s rationalizing a position using math or science even when the position (applauding investing culture) is exclusionary or even toxic to a substantial segment of the population (e.g. the 99% who either don’t invest or who form the ETF benchmark). Larry isn’t talking about excellence, he’s talking about dominating, and slipping that through with a cute abc.xyz domain name. While it’s very interesting to hear these stories about Google, perhaps the lesson learned is just how blind people are to Google’s greed when technical adventures are dangled in front of them. [1] https://blog.google/alphabet/google-alphabet/ https://blog.google/alphabet/google-alphabet/
spoonjim 6y ago
The fact is that in a company in Google’s position, management attention is a scarcer resource than money. The CEO can only manage about 10 people so each of them has to manage at least $20 billion in business and grow it $2 billion a year. So at 2000 work hours a year, every meeting they take needs to have at least $10 million of impact. Typically the only such meetings will be regarding the company’s main business line, because creating $2 billion of business in a year is impossible unless you are tweaking a $200 billion business. Which is what causes big companies to keep their heads straight ahead focused on what’s already working for them, and what creates opportunity for the next generation of startups.
newusertoday 6y ago
that was hilarious :)

iJohnDoe 6y ago

Your rewrite was extremely well done. It’s too bad CEOs don’t write their PR like you have done. Like when they drive companies into the ground, lay everyone off, and then they exit with millions.

karljtaylor 6y ago
they do, it just usually gets re-written to hell in about 30 very anxious email rounds
muskrat_wire 6y ago
that's capitalism

TheMagicHorsey 6y ago

This is the funniest thing I've read in a while. And potentially true.

jpm_sd 6y ago

This is fantastic. You accurately describe the Other Bets climate when I left X in 2015, and I hear it's even worse these days from friends who recently left when Loon shut down.

lumost 6y ago

I swear that there is a resource curse for businesses with a singular "successful" product line. In order to expand the business and not have people sucked into the "successful" part, the teams need to be split. Once the teams are split the "successful" team wonders why the "new" team sucks. In the case that the successful business is Ads/Search... it's tough to compete. I'd imagine even within Ads/Search there is a resource curse between AdX/AdWords/Youtube and every other ad business.

liaukovv 6y ago
Sounds to me like what they shoukd be doing is instead of trying to "reinvest" profits from ads instead pay them out to shareholders so they can more efficiently redistibute it to multiple smaller businesses
- KirillPanov 6y ago
  But that would shrink the empire. The kind of people drawn to "chief" positions are not interested in shrinking their empires.
- tehlike 6y ago
  They are doing share buybacks which is usually deemed more tax efficient.
- pclmulqdq 6y ago
  That is exactly what they should do, but the fact that a majority of voting shares are held by 2 managers makes the company have a huge conflict of interest that favors growing more and more rather than pulling cash out.
csours 6y ago
Are you familiar with the Innovator's Dilemma? Because it sounds like you're describing it. https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma And yes, splitting is part of a solution. I think discipline is another part.

ilyaeck 6y ago

Nice rewrite, now I no longer need to bother reading the original!

dealforager 6y ago

I understand the sentiment, but $20M/year really is a waste of time for a $200B/year business. I have a hard time thinking of a way it wouldn't be a loss given the added organizational complexity having those kinds of projects would bring. I thought the entire purpose of "other bets" was to pursue ideas that have the potential to become $XXB/year revenue streams. So of course they want 'moonshot' companies.

solutron 6y ago
I give it less than 5 years before Google offloads or shutters Waymo entirely.
cobookman 6y ago
How many XXB/year companies start off making XXB/year or have clear visibility to XXB/year near-term? For example, I doubt the AirBNB founders early-on and/or 5-10 years ago even imagined they'd have multiple billions of revenue.
ChuckMcM 6y ago
> $20M/year really is a waste of time for a $200B/year business. That's the thing though, it isn't a waste of time. One can hear very similar logic from people with investments. They will say "The stock market is returning X% / year and is way better than those bonds with only 3%/year. Investing in bonds is a waste of time." They say that because they have yet to internalize the value of having a diversified their investments. Not everything goes up all the time. It only makes sense for Google if the Search Ads business were to never ever lose its profitability. And yet, it is losing its profitability. As a result, Google has to aggressively cut back on expenses, remove projects, end of life products, etc as that cash cow slowly deflates. Consider then the alternative where there are 10, 20, even 30 business lines within Google generating $10 - $30M of profit each. 30 businesses at $30M is only $900M, less than 5% of their revenue, but those businesses are SOLID and provide a supply of management talent, consistency, and some bucks to keep the lights on elsewhere. That is diversification of execution risk. It works the same way investment diversification works, it adds other, less high margin, businesses to the portfolio that are all revenue positive. A company like Google can use those businesses to experiment with alternate user support models, management schemes, policies, and communications. All of that helps the "main" company to mature in its thinking about how to be a business. Sadly, executives who have never had any experience other than one wildly successful business tend to think exactly like you do, "Why would I waste time on piddling little products when I've got more cash than I know what to do with being pumped out by my main business?" Short answer: "Things change."

petra 6y ago

Maybe businesses don't need revenue streams. I wonder by how much the Moonshot program, increased Google's Market Cap.

ChuckMcM 6y ago
This is a fair question. After all, an increase in market cap means, as execs, you're paper wealth is that much greater. The challenge is that market cap isn't durable. Specifically businesses that just provide net revenue, even if it is only a "small" amount relative to the overall company, are helpful in mitigating shocks to the market. So it may be intoxicating that the stock going up 10% adds a few billion dollars to your net worth, but it can also go down 10 or 20% and that wealth goes poof![1] [1] The reality is that paper wealth is not worth anything, only after it has been diversified can you really count it as part of your net worth. Again, this is my lived experience :-).
- petra 6y ago
  The Moonshot program created a lot of optimism about Google for many years. Over that long time, I'm sure there are benefits for the executives' personal stock(don't CEO's diversify every few years?) , and for Google in general(for ex. Better talent).

recuter 6y ago

I am 32. I Could have written this 7 years ago. I no longer accept job offers at any salary in this industry. In fact, all my emails and communications are written in this style all the time with everyone - what shall I do now wise one? (serious question) You wanna start a band or whatever. Maybe we can start like an Elks club thing?

ChuckMcM 6y ago
Are you the CEO or the non-executive employee? One of the reasons I put my email in my profile is that it brings me interesting questions. :-)
- recuter 6y ago
  I'm gainfully unemployed and like Luke you can't make me go back! I've job hopped looking for a place where people don't engage in the Kabuki but apparently all the worlds a stage. Maybe I'll make one of those lil ships in a bottle this year.
  - ChuckMcM 6y ago
    Perhaps you will find, as I did, that the secret here is having a purpose. I know a number of people in the same situation, they don't "have" to work but when they don't have full time employment they just kind of wander this way and that. This becomes a problem when they realize that there is no 'win' in life, you just die. So the time wasted wandering is just that, time they never had to truly live. Given my experience and my interest in systems I have become something of a 'journeyman' engineer in the traditional sense. I like helping folks and I like figuring things out. I charge money for that because it weeds out the freeloaders but I don't charge a lot of money. My terms are that if its not working out, we'll part friends, but we will part. As a result I've managed to meet some manager types whose only tool in their manager toolbox is "I'll fire you if you don't do that." (which is a pretty weak toolbox). It is an exceptional thing to be where you are, at the age you are. How you choose to spend the years can be very satisfying and impactful, or a source of anger and regret.

mohon 6y ago

Could you also translate the last section too? Would love to read that as well

ChuckMcM 6y ago
"Please don't hate me." ?
- moonchild 6y ago
  What about the response?
  - ChuckMcM 6y ago
    Probably some error in my filters but I checked it twice and couldn't find any actual semantic content :-)

axaxs 6y ago

Man, this is spot on and great insight. I'd love if people were really free to be so honest without repurcussion. Thanks for doing it.

craftinator 6y ago

> I don't know if the attitude has changed since I was there but people creating $20M/year business revenue streams were not considered "successful" back in the day. I found that somewhat self defeating. It's the "I stumbled onto this giant pile of cash, and if you don't stumble onto one too, you obviously aren't stumbling hard enough" attitude of management.

choppaface 6y ago

“Mostly it seems to me that they want a 'moonshot' company that has the original profitability of search advertising, full stop.” Well, when Larry page wrote “we also like that it means alpha-bet”[1], a lot of readers in tech probably mistook him at his word. When it comes to investing, “alpha” means winner. As in somebody else loses. As in what gets optimized is _the investor_, not necessarily the community. The analogy to investment return above benchmark is a trademark Googley delusion—- it’s rationalizing a position using math or science even when the position (applauding investing culture) is exclusionary or even toxic to a substantial segment of the population (e.g. the 99% who either don’t invest or who form the ETF benchmark). Larry isn’t talking about excellence, he’s talking about dominating, and slipping that through with a cute abc.xyz domain name. While it’s very interesting to hear these stories about Google, perhaps the lesson learned is just how blind people are to Google’s greed when technical adventures are dangled in front of them. [1] https://blog.google/alphabet/google-alphabet/ https://blog.google/alphabet/google-alphabet/

spoonjim 6y ago

The fact is that in a company in Google’s position, management attention is a scarcer resource than money. The CEO can only manage about 10 people so each of them has to manage at least $20 billion in business and grow it $2 billion a year. So at 2000 work hours a year, every meeting they take needs to have at least $10 million of impact. Typically the only such meetings will be regarding the company’s main business line, because creating $2 billion of business in a year is impossible unless you are tweaking a $200 billion business. Which is what causes big companies to keep their heads straight ahead focused on what’s already working for them, and what creates opportunity for the next generation of startups.

newusertoday 6y ago

that was hilarious :)