Startups

Why I Left < > by Dan Weingrod

This morning’s feed opened up with two high profile posts about departures. The one that made the bigger news was Greg Smith’s, featured on the front page of NYTimes, on why he is leaving Goldman Sachs, the second was from James Whittaker, a self described technology executive, on why he’s leaving Google.

It’s not every day that you have such public departures from iconic firms and in both cases the immediate impulse is to think of these as canaries telling us what’s really wrong with company x or y, or at least confirming our worst suspicions. In Smith’s reasons for leaving Goldman easily confirmed my own suspicions, but Whittaker’s reasoning was a bit more nuanced and what links the two is really the issue of culture and business model.

For Smith it’s all about the culture of making money at all costs and a leadership that will no longer support bigger ideals:

The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.

For Whitaker it’s also about culture, ideals and money, but from a slightly different tack:

The days of old Google hiring smart people and empowering them to invent the future was gone. The new Google knew beyond doubt what the future should look like. Employees had gotten it wrong and corporate intervention would set it right again.

Smith’s post is easier to digest, a lot of what’s there is very much about confirming all of the expectations we have of Goldman, (and not even the worst expectations). So while it is shocking in its kimono lifting openness, it doesn’t really surprise.

Whitaker’s post is much more complicated. He also has a problem with the money culture at Google, but it’s the culture dedicated to making money from advertising that he has a problem with. He meanders and forth between decrying advertising as a reason for Google to make money to supporting the “old Google” advertising model. But what he’s really talking about is Google’s push into social and its relentless move into becoming as Facebook-like as possible, especially around maximizing and utilizing user information.  In a way, one of the biggest similarities between Smith and Whitaker is in how they see their respective giant corporations denigrating their customers. For Smith its how Goldman looks at customers as “Muppets”. For Whitaker Google “creeps me out” by blending G+ social content into search results and Gmail ads.

Whitaker’s departure from Google seems to me to be about culture and the long standing conflict between engineering and advertising. It’s surprising to see the discussion because Google, as he points out, has been an advertising company for at least ten years. But engineers who are committed to building the best possible product often chafe at the idea that the end goal has to be a better marketing product. After all, their goal is to build the best possible product for their customer.  Unfortunately for the best way to support this type of product development culture is to charge users for the product. But we’re not there yet, or at least Google isn’t.  (imagine charging for Gmail?), so we’re stuck with advertising as the primary way to make money from Web based software.  Google knows this and its move to social, which Whitaker castigates in pretty harsh terms, is part of making sure that the ad revenue keeps growing, at the expense of engineering culture

It’s a tough balancing act. Google has tried to maintain its startup culture, but the problem is that as startups mature, or become Google, its pretty hard to maintain their mojo. This tweet from Brian Morrisey at SXSW summed this up nicely:

sxsw brings together ad agencies fascinated by startups and startups that hate advertising

Whitaker has already decided which side he’s on in this debate. He left Google to go to…Microsoft of all places. Its actually not such an odd decision because he left Microsoft to go to Google three years ago, what is interesting is that he went back a company and culture that had always championed a payment instead of ad based revenue model for software.

 

Image courtesy of Striatic

Razor and Blade Startups by Dan Weingrod

The best thing I’ve seen this week has been the launch, and irresistible launch video, of Dollar Shaving Club. With all of the hoopla around the new, battery draining, connection apps debuting at SXSW when we look back next year we’ll probably remember DSC first. We may even be using its blades by then because because of how the video has redefined social spread by taking the typical hockey stick growth curve and turning it into something that more resembles a flagpole.

Dollar Shave Club popularityDollar Shave Club popularity

Dollar Shave Club Popularity

But what’s even more interesting for me is what this launch says about startups and how we need to think about them. All too often startups are synonymous with mobile apps, interesting data viz and disruption of spaces where information, utility and entertainment are controlled by worn out standards. DSC has done something different here, actually getting into the grimy world of physical products and using innovation in its business model to take on the long-standing razor & blades sales paradigm. By recognizing that blade manufacturing technology has become commoditized, and cheaper, they had the smarts to layer over a subscription model that likely came from understanding the problem and some careful customer development. DSC isn’t the first to do something like this, Airbnb’s approach feels very similar although it sits more in the collaborative consumption space. Pointing startup thinking onto the more mundane world of physical products may be a little more boring, but the opportunity can be huge. And nowadays, when we hear the most inspiring talk at TED exhorting us to focus less on technology and more on the real world, a dose of razor and blade startup can be very instructional. A really good video helps too.