Google's music and the shotgun approach to world domination - part 3

I blogged about how Google's random acquisitions and development work does make sense here (part 1) and here (part 2).

I basically drew analogy between catching fish and Google's basic aim of getting people to access internet via its own curated version. I ended up by saying that merely that does not explain some of it's more ambitious and truly weird investments like those in robotics, biological sciences or Uber. For those, we need to start looking beyond fishes:

Looking beyond the fish:

1. 2 months back Google bought a whole bunch of robotic start-ups. Start-ups doing some kick-ass work for everything - from military to automation. 
2. A few months before that Google put in a mind-boggling $258 million in a Uber - a start-up that allows the top 1% to hail down limousines as taxis.
3. Around the same time, it invested in a company called Calico. What does it do? It's not super clear really but Larry Page indicated that it is working towards altering an average human's life-span by approximately a twenty years or so.
4. Way back in 2007, Google invested in a company called 23andMe that does rapid gene testing allowing people to understand themselves better.

I could go on, but really one gets the point by now. It is super hard to try and trace all of this back and say that these investments will eventually yield more Google searches and get more people to access internet via Google services.

It's hard because that's not what this ought to be about.

Some time in between 2005-2007, Larry Page and Sergei Brin ought to have realized that eventually Google will reach the limits to the potential of internet. At least what we thought that the internet does. Merely acting as a facilitator in letting people access information is only one part of the business for Google. It was time to encash the dividends earned. Cue - data logging.

Google has access to one of the most potentially valuable properties in the world: our lives on the internet. Practically all that we do today, mail, maps, search, buy stuff, look up weather reports, news reports, calenders, book tickets, chat - any small thing eventually finds its way to the treasure trove owned and controlled by Google. Google has already been cashing this to a large extent by coming up with smarter and smarter context based adverts. However, that definitely cannot be the limits to the usability of this data. Surely, the combined lives of a few billion people ought to be more valuable than that.

The robots are coming:

Google, I personally think, has invested in the robotic start-ups because it believes that this is going to be one of the final problems that mankind solves. Till date we have used robots to help us mechanically, improve our efficiency by taking over all the boring, repeatable stuff as man has moved on to the more 'demanding' and 'creative' jobs. A part of those jobs are also being eaten by computers, as they speed up daily and are able to tackle the most severe analytical problems for us. The future will be bots which will marry these two advances together. These will be machines which will not only take over the repeatable works, but will be able to define these works too, 'on-the-go'. This means super smart AI would marry really kick-ass mechanical structures. 

Google knows that its treasure trove of data can allow it to look deep into human psychology. Stuff that can allow it to come up with AIs more advanced than the current generation. Suddenly, the driverless cars and the Google Glass seem to follow a pattern. Acquiring those robotic start-ups has positioned Google as one the most suited candidate to lead this change.

Hail down a taxi-company:

Uber created a company to quickly hail limos for the rich and the famous. However, its founders soon realized that what they had was actually a highly scalable system for meeting people's demands. It started small by servicing weird and random needs of people (lost kittens? no school bus? helicopters? - we got you covered bro'). Eventually it positioned itself as an 'instant gratification service'. It built all of this on the back of a very robust (and yet quite simple) app interface and back-end. It figured out that people like to see stuff tracked i.e. they like to have control - an aspect that is apparent by their willingness to pay a premium for stuff that will be delivered where they want it and when they want it. It need not actually create tremendous value. It is a game of perception. Uber realized it needs to give people the perception of control which ironically comes from a massive level of tracking and control on Uber's part. 

This makes total sense for a company like Google. Google has truly got us totally covered bro'. A service like Uber can be expanded into several domains. You press a button and things appear. It's almost as if they know what we need, when we need it. No waiting, no delays, no on-the-spot payments, no reservations. Think furniture deliveries, food deliveries, medicine deliveries.

The bio guys:

Why invest in Calico and 23andMe? For the exact same reason. In both cases, Google can add a tremendous value by utilizing all of it's mined data. This data can be used to facilitate research into the origins and spreads of diseases. 23andMe is already acting like a feeder service to Calico after having analyzed the genetic make-up of close to half a million people. 

After investing in Calico, Larry Page said in an interview "Are people really focused on the right things? One of the things I thought was amazing is that if you solve cancer, you’d add about three years to people’s average life expectancy. We think of solving cancer as this huge thing that’ll totally change the world, but when you really take a step back and look at it, yeah, there are many, many tragic cases of cancer, and it’s very, very sad, but in the aggregate, it’s not as big an advance as you might think.”

Is this guy stupid or something? No. He's bang on actually. We are in an era where most problems can be solved given enough resources. Google is spending one of the most easily duplicable resource available - the data it collects and the insights it gathers from it. And it thinks that it can do much better than get a pitiable three years for every person on earth out of it. It is aiming for immortality.

In fact, Calico yields the best possible insight into how Google thinks. Google is not looking at solving any problem incrementally. It seems to believe (in the words of Gregory Ferenstein of TechCrunch) that diseases like cancer and other real world problems could be cured if only we had snappier algorithms.

And you know what? I think they might be just correct..

Google's music and the shotgun approach to world domination - part 2

In the last post I tried to highlighted how Google is attempting definition moon shots. Let's try and see if there is any sense to what they are doing.

PS: the article on getting vendor-locked to Google has been postponed.

Originally when Google started expanding wildly in the mobile and browser areas, many writers started seeing a clear trend. They realized that Google, despite all the indications to the contrary, is still betting big on the search engine part of it. Horace Dediu used a super awesome analogy of fishing to explain what Google's doing (here's his article. He wrote a fairly long post and I am gonna be pretty much ripping off his stuff in the next few paras):

The what: 

According to Horace, Google seems to be the world's 'internet civil engineer'. They are building real infrastructure for the internet and making sure that everything remains open and super easily accessible - seemingly like a benevolent civil engineer.

The how:

Imagine, you are a fishing company. And you are the dominant fishing company because you freaking catch fishes so well. By virtue of your size and speed, you practically own the single biggest river in the country and lay massive nets at the mouth of the river and catch all the fish just before the river merges with the ocean.

Now as this fishing company's shareholders, you want to maximize the # of fishes you catch. Well, you already own the entire river and there's little else to do really.. - if you thought all you can do is catch fish passively.

So you get creative. You move to the start-up mode and become proactive.

You realize that what you need to do, is basically increase the number of fishes in the river. To increase the number of fishes you can do a couple of things. First you fight and remove any impediment to the natural flow of the river. So any dams or dredges or control measures need to be kicked out. This gives you great PR, but you know that you did it to speed up the river flow.

But you cannot stop there. So apart from championing for the openness of the 'eco-system' and a free for all 'river', you also start looking at ways to augment the water in the river itself.

Step 1: First you go and divert all small rivers and get them to join the main river. This way the water content shoots up and you get more fish.
Step 2: You get even more ambitious. You decide that the only way left to catch more fish is to increase the total water available in the world itself. More water = bigger rivers = more fish. So you embark on a seemingly confusing and unrelated plan to seed the clouds. You plan to increase the rain in your catchment areas. That swells up the river and gives you still better PR. The fishing company is making it rain!

Some would say that it's not the best strategy since you are increasing the catch size for everybody (including your competitors) and paying for it all alone. You answer with the annual profit statement which explains how you grow massively by increasing the pool size. You don't care about the competition catching a few extra fish since you are the biggest player anyways.

The why:

And that's why a seemingly powerful and innocuous search engine company decided to

• fight for the openness of the internet
• fight against any censorship or regulation
• build it's own browser which was faster and a little better than any existing browser
• build android to fight against the 'closed' system of the blackberries and iOS
• buy out and maintain the biggest video repository on the planet as a free-for-all medium
• build it's own nexus line of mobile devices and sell them at 0% margins
• lay Google Fiber which would offer mind boggling fast internet to the commoners 
• ..and then ask those commoners to share this fast internet with random strangers on the street - for free
• buy out a 'number portability' company and develop it as 'Google Now' - a service which will in time start killing several apps, even the popular ones like Zomato and Sound Hound, and get more and more people to use Google services as the first step to accessing the internet

There! The river (internet) has uninterrupted flow, all small rivers are now it's tributaries (you even check your flight timings and fix appointments on Google now), the river is flowing faster (Google fiber, loon project, chrome and chromebooks) and it's even raining more now! (due to android and the nexus line) - billions more are getting online for the first time, courtesy Google and it's myriad of 'free' and neat services.

But one never forgets that all of the above lead to one and one objective alone - the net at the mouth of the river - the advertisements and the data that Google shows and collects. That's the lifeblood. And while one may read all of Google's actions as those of a benevolent leader spreading the riches of his profitable search business, it's not a stretch to imagine that Google is spreading the riches only to collect more data and become an even larger company. You see, it's shareholders are not stupid or purely altruistic.

However, I think that Google is still smarter. 

You see, the problem with all of the above is still hinged on assuming that Google only wants to 'catch fish'. I think that Google wants to go beyond merely catching the stupid fish. That game's done. The 'catching fish' campaign cannot explain crazy actions like buying out all the robotic start-ups out there or funding Uber or even building autonomous cars. One needs to look beyond fish to understand that.

Next post: Looking beyond the fish.

Google's music and the shotgun approach to world domination - part 1

I absolutely love Google. I might be the biggest evangelist for it in my circle. That partition ad that told everybody what a jhajariya was - I probably use all those nexus and google features before breakfast everyday.

Google is perhaps the most intriguing and definitely the most ambitious companies of our time. It has been long since it came out of it's humble search engine origins. A gargantuan theme is unfolding right in front of us daily and Larry Page and Sergei Brin are orchestrating it in the most subtlest way possible. Often it's how to see how the dots connect. For the most part critics keep questioning and dismissing some of their moves as 'moonshots' or 'yeah-if-i-had-a-few-billion-dollars-in-extra-income-every-year-i-would-too'. How many people could see massive sense in the following:

• (1998) Origins: we are building the world's 20th search engine at a time when most of the others have been abandoned as being commoditized money losers. We'll strip out all of the ad-supported news and portal features so you won't be distracted from using the free search stuff. (source)
• (2001) Weird idea 1: let's buy this company which makes 3-D views of the globe. Because nothing spells synergy better than a search engine company acquiring a 3-D viewing start-up. Maybe people want to see their results in 3-D!
• (2005) Weird idea 2: let us buy this operating system start-up for mobile phones. Because two years later Apple will come up with a wildly successful iPhone which will make the OS a dominating item in the otherwise stupid phones of today. THEN, we will market this as a 'flexible platform for everybody' and kick Apple's ass a decade later with 80% market share.
• (2005) Weird idea 3: Let's devote time and money in developing autonomous cars, a topic that established auto players haven't been able to crack yet. Business model? What business model?
• (2006) Weird idea 4: let's buy this video sharing platform that everybody is talking about for more money than what we made on our IPO. Can you not see the obvious link between sharing videos for free on the net and searching for the latest pirated episode of 'The Big Bang Theory'? Of course, it won't break even soon and may actually have no idea about how to actually make money. Hey, we started that way too!
• (2007) Weird idea 5: so there's this company which basically allows you to have 'number portability'. Yup, we should buy them out. You know, just in case.
• (2008) Weird idea 6: Remember Netscape and how Microsoft killed it with a free IE? Time to up the browser-wars ante with our own browser. Of course, it will be free. What do we do that isn't?
• (2008) Weird idea 7: quit thinking small. Let's launch a satellite already!
• (2010) Weird idea 8: time we started building wind farms.
• (2010) Weird idea 9: Let's give cheap and an order of magnitude faster internet connection to people. And let's force them to give up 25% of their data allocation as free to strangers.
• (2011) Weird idea 10: remember that failed mobile major, Motorola? Let's buy them out for more than the GDP of Albania.
• (2011) Weird idea 11: Let's launch a thousand balloons in the stratosphere so as to provide free internet connection to rural household through out the world. How's that for philanthropy Mr. Gates?
• (2012) Weird idea 12: Let's make mobiles which are better spec'd then an Apple iPhone and sell that for a loss to everybody. Yes, we do not have accountants.
• (2012) Weird idea 13: Let's build more physical products. Starting with a ridiculous looking spectacle which will beam information straight into your eyes 24X7. Now you see where we are going.
• (2013) Weird idea 14: Next target immortality. Let's fund that too. We don't even know what we are trying now.
• edit: (2013) Weird idea 15: Time to throw 80% of our fund money into one single company that builds a cute iPhone app for hailing taxis. The said company will also deliver kittens. Aww that's cute. We definitely will fund this big time! - courtesy Achal.
• (2013) Weird idea 16: 'Let's buy all the freaking robotics companies, just in case the robots take over the world!" - (courtesy Arun). And we will buy every company worth owning that there is. Twelve of them to kick-start a new fellowship of the bots with Google as the Gandalf.

Of course, to you the super-smart reader of this blog and dilbert comics (I absolutely love Dilbert and believe that the book "the dilbert future" should be mandatory reading in schools), all of the above makes complete sense. The gift of hind-sight helps too.

Next article we will see how we are all getting vendor-locked to Google.

PS: the 'Google's music' is a play on the 'music of the Ainur' in LoTR.

'Designed in India' - not so much

Swapnil (my co-founder at Ather Energy) today pointed out an interesting article in one of the blogs promoting electric vehicles. It's an interview of an the head of an electric vehicle company in India who's talking about the current EV scene in the country.

The interview starts off well, and the head (very surprisingly) correctly identifies the problems with EVs in India - poor performance, quality and battery issues. Even the specs that he postulates and the price point that he identifies are bang on.

He follows it with a description of what they are building and how that is perfect. At this point we cannot agree more - because we are building something pretty similar. And then comes the kicker - he showcases the product: it's an imported unit from the Washington.

While, I am sure that, that company has its heart in the correct place and for all I know, they might also be building something similar - this however, is a much deeper problem that runs through a lot of Indian companies. Apple proudly says "Designed in California" "Assembled in China". For IP intensive companies the real money and innovation lies in controlling the design. Manufacturing in today's world is cheap and can be done pretty much everywhere. But, a lot of Indian companies end up directly importing the designs and the dependent technology too.

In the auto sector the next two decades are going to be phenomenal. The IC engine is on it's way out and various alternatives are going to slug it out in research labs followed by the design studios and eventually in the market place. This can be India's chance to catch up in technology and Indian companies should not miss it. A lot of the companies that we have been meeting with or interacting with, seem to believe that such kind of design work is not meant for us and hence still needs to be imported. We are much better than that and in addition also have a very mature auto industry in the country.

If the established industry won't step in, then start-ups should. One can never have enough me-too utility apps and e-commerce platforms - indeed they are already playing a massive transformative role in our lives. But maybe it's time that founders focused on building the 'next big thing' in manufacturing and started some good old fashioned brick and mortar industries. Maybe it's time for an industrial revolution in the start-up land.

So jeeves suggested this

After a wildly successful stint at the writer's block, it's time to charter new territories.

For the past few months I have been trying to pick up a new hobby since reading and playing the occasional CS no longer counts as a hobby (I really miss college life). After giving serious thought I had it narrowed down to the following:

1) Learning salsa
2) Learning guitar
3) Blogging

Salsa and guitar would have been both richly rewarding and would have made me a more interesting person. Apart from being fun they were also great pastimes. While blogging would have meant that I would again start with absolutely zero practice and may abandon it at my whim, anytime. Obviously, the first two choices stood no chance.

So, blogging it is. To give it the appearance of a decent effort I will try to fire up a post every day, kinda like Fred Wilson's blog (which I absolutely love). Worst case I may end up writing as infrequently like thecomeonman - still not a bad target. I love this hobby already!