Eagle Alan - Google: how Google works

I n July 2003, Eric Schmidt had been the CEO of Google Inc. for two years when he received an email from one of the companys board members and investors, Mike Moritz, a partner at Sequoia Capital. It included a suggestion:

you may want to think about picking a three hour slot in mid-august when the management presents to the board our campaign to compete with finland. (i do not think we should wait until the september meeting. this is far too important a topic and weve all learned that the best way to discover how short a year happens to be is to compete with finland.)

To the uninformed, this note might have been confusing. Why would Google, a several-hundred-employee, five-year-old Internet start-up based in Mountain View, California, be competing with Finland, a country of five million people that was over five thousand miles away and generally considered to be a friendly, peaceful place?

The Finland email arrived just when Eric felt like he was finally settling into Google. He had come from Novell, where he had been the CEO, and had also worked at Sun Microsystems and Bell Labs. After growing up in northern Virginia, he graduated from Princeton with a degree in electrical engineering and received a masters degree and PhD in computer science from the University of California, Berkeley, so not only was he no stranger to working with engineers and computer scientists, he was one. Still, when he got to Google he stepped into a place very different from anywhere else he had been.

His I have a feeling were not in Kansas anymore revelation started on his first day. When he arrived at the office that had been assigned to him, which was already quite modest by big-shot CEO standards, he found that it was occupied by several software engineers. Rather than kicking them out, he decamped to the next office over, which was more of a closet with a window than an actual office.

Then, a few weeks later, it got worse. One morning, as he walked down the hall to his closet office, he noticed that his assistant, Pam Shore, had a troubled look on her face. He soon found out why: He had a new officemate. It was one of the search engineers, Amit Patel, who explained to Eric that his office had five inhabitants, with another on the way, and that his solution of sawing one of the desks in half to make more space hadnt worked. In comparison to his current space, Erics spot seemed quite roomy, so Amit moved in. (The facilities crew had refused to move Amits stuff into Erics office, so he had done it himself.) Amit and Eric ended up sharing the office for several months. Clearly, this was not a measure-your-importance-in-square-feet kind of place.

Beyond the unusual facilities arrangements, the rest of Erics transition into the company was fairly smooth. His relationship with the two founders, Larry Page and Sergey Brin, was strengthening every day. The companys advertising platform, AdWords, was starting to generate significant amounts of revenue (when the company filed for its initial public offering in 2004, the financial statements astonished most observers in a good way), and even though Google as a verb for millions of users Google search was already an important part of everyday life. The company was growing too, adding dozens of employees every month, including a new head of products, Jonathan Rosenberg, who came on board in February of 2002. Jonathan, like Eric, was the son of an economics professor. He joined Google after stints at Excite@Home and Apple, to build up the companys product management team and round out Erics staff.

As Mikes email pointed out, though, there was a major competitor on the horizon, and it wasnt really our Nordic friends across the Atlantic. Finland was our internal code name for Microsoft,

The future of the company was at stake, and what to do was far from obvious. Moritzs note was a call to action. He asked Eric to rally the team and create a plan that would establish clear deliverables across the company: product, sales, marketing, finance, and corporate development. Every aspect of how Google operated was on the table, and there was even talk about transitioning the company from its quirky start-up structure to a more traditional one organized around business units, to make it easier to develop new revenue streams (another thing the new plan was supposed to address). Most important, the plan needed to establish milestones and a roadmap of which products would ship, and when. In short, Moritz wanted what any sensible, normal board member would want: a comprehensive business plan.