I’m back. I’ve completed the requirements for the master’s portion of grad school and when I go back to school in the fall I’ll be a PhD candidate.
I’m interning at Google this summer. As a reminder, nothing I write here reflects the views of Google. And as I said in April, I’m going to mostly avoid writing about Google.
However, I did want to link to this post from last December by Google exec Jonathan Rosenberg, which ties in nicely with some of the themes of Bottom-Up:
To understand our position in more detail, it helps to start with the assertion that open systems win. This is counter-intuitive to the traditionally trained MBA who is taught to generate a sustainable competitive advantage by creating a closed system, making it popular, then milking it through the product life cycle. The conventional wisdom goes that companies should lock in customers to lock out competitors. There are different tactical approaches — razor companies make the razor cheap and the blades expensive, while the old IBM made the mainframes expensive and the software … expensive too. Either way, a well-managed closed system can deliver plenty of profits. They can also deliver well-designed products in the short run — the iPod and iPhone being the obvious examples — but eventually innovation in a closed system tends towards being incremental at best (is a four blade razor really that much better than a three blade one?) because the whole point is to preserve the status quo. Complacency is the hallmark of any closed system. If you don’t have to work that hard to keep your customers, you won’t.
Open systems are just the opposite. They are competitive and far more dynamic. In an open system, a competitive advantage doesn’t derive from locking in customers, but rather from understanding the fast-moving system better than anyone else and using that knowledge to generate better, more innovative products. The successful company in an open system is both a fast innovator and a thought leader; the brand value of thought leadership attracts customers and then fast innovation keeps them. This isn’t easy — far from it — but fast companies have nothing to fear, and when they are successful they can generate great shareholder value.
Open systems have the potential to spawn industries. They harness the intellect of the general population and spur businesses to compete, innovate, and win based on the merits of their products and not just the brilliance of their business tactics.
Obviously, this is corporate propaganda and should be taken with a grain of salt. But I think it’s sincere, and Google has followed through on the sentiments expressed here. Rosenberg cites the example of the Data Liberation Front project, which helps users who want to leave Google products take their data with them. It’s a pleasure working for a company that not only treats their employees (including interns!) well, but does so while also treating their customers well.