Invest Like the Best with Patrick O'Shaughnessy
· Gokul Rajaram
[00:00:00] S1: One of the most interesting things about all the leaders that I've worked with that have built generational companies, is that they have a superpower that is very aligned with what the company needs to succeed. And the company was really shaped in their image – the company, the culture, the early hires, the products. I joined Google in 2003. The first product I got exposed to, actually, which I didn't know about, was a product called Caribou. Caribou was an internal code name for a product that was launched on April 1st, 2004. Publicly, it was called Gmail. I didn't believe that this product existed, because in the internal alpha, it said, this gives you one gigabyte of storage. Back then, remember, Yahoo Mail was the dominant product, and it gave 10 megabytes of storage. So this thing had 100x more storage. And this really epitomizes Larry and Sergey's philosophy, which was basically build the best technology on the planet. They were deeply technical, and every product was held to technology and scale. And I'll never forget, AdSense was the fastest growing product in Google history. And we went in to reviews, and Larry would be disappointed in us. And we asked why. He's like, "What percentage of all ads on the internet are you? Less than 1%." He didn't care about the revenue. He cared that Google is involved in serving every single ad on the planet versus making a business of whatever, a billion or two billion or 10 billion. So the focus on scale and the focus on technological superiority – and that investment, Google Street View, TPUs, Waymo, all of these, I think, show the 10 plus years of investment to an uncertain future. But knowing that if you invest in technology, good things are going to happen, and good things happened, but it took a decade. And that's investing in technology capabilities.
· Patrick O'Shaughnessy, Gokul Rajaram
[00:00:00] S0: Before you leave Google, you had this interesting idea about communication and Eric Schmidt, obviously another key Google person. Can you tell the story about him presenting the company strategy using nothing but images? This is an interesting example of communication. [00:00:00] S1: Eric would give a product leader… we would become seconded to Eric for the weekly strategy, or the annual strategy planning session. So I did it, I think, in 2007, where my job was to go to Eric and say, "Eric, how do you want to present the strategy of the company?" He's like, "Well, it's very simple. I want you to go and interview each of the different leaders of the different teams. There's only one constraint I have." I'm like, "What is that?" "You can't use any words to describe what they're doing." I'm like, "What do you mean? You have to use words." "Nope, you've got to use only images." I'm like, "Why is that?" He's like, "People don't remember words. They remember how things made them feel. And you can put words in the speaker notes I'll use, but I want you to come up with the most compelling image that exists for what they're describing." And so, it was a crazy thing because I never thought of doing a presentation that way. So I went to each of the businesses, AdWords, Search, YouTube, AdSense, and then had to come up with a compelling image that was easily accessible to the whole company, yet represented what they did.
· Gokul Rajaram, Patrick O'Shaughnessy
[00:00:00] S1: Eric would give a product leader… we would become seconded to Eric for the weekly strategy, or the annual strategy planning session. So I did it, I think, in 2007, where my job was to go to Eric and say, "Eric, how do you want to present the strategy of the company?" He's like, "Well, it's very simple. I want you to go and interview each of the different leaders of the different teams. There's only one constraint I have." I'm like, "What is that?" "You can't use any words to describe what they're doing." I'm like, "What do you mean? You have to use words." "Nope, you've got to use only images." I'm like, "Why is that?" He's like, "People don't remember words. They remember how things made them feel. And you can put words in the speaker notes I'll use, but I want you to come up with the most compelling image that exists for what they're describing." And so, it was a crazy thing because I never thought of doing a presentation that way. So I went to each of the businesses, AdWords, Search, YouTube, AdSense, and then had to come up with a compelling image that was easily accessible to the whole company, yet represented what they did. [00:00:00] S0: Do you remember a specific image? I'm so interested by this exercise. It seems potentially productive for anyone to try to jam what they're trying to say into only images. And so I'm trying to pin down an image and how you arrived at it.
· Patrick O'Shaughnessy, Gokul Rajaram
[00:00:00] S0: Do you remember a specific image? I'm so interested by this exercise. It seems potentially productive for anyone to try to jam what they're trying to say into only images. And so I'm trying to pin down an image and how you arrived at it. [00:00:00] S1: For YouTube, it was a graph. It showed that the number of videos being uploaded every second, how it had changed from the time Google bought them, to then. So it was not even a graph. It was literally showing this incredible hockey stick that happened over the last 18 months. And then it had, I think we couldn't even show the numbers. So the thing had to be compelling enough… [00:00:00] S0: The line. [00:00:00] S1: The line would have to be like a U or something like that, but it went like that. Because if you just show it like this, you have to say something, 100x or something, where you couldn't say that. Google Search Appliance, I think we wanted to show that Google Search Appliance has gone from being used by small and mid-sized companies to being used by the largest companies on the planet. We showed the logo, a very large Fortune 100 or Fortune 50 company that they'd acquired. [00:00:00] S0: What did you learn from Zuck?
· Gokul Rajaram
[00:00:00] S1: Zuck was, and is actually, I think the greatest mind on growing, building growth and engagement – building consumer products, broadly. I've seen him basically sit in a room and critique a product team would have come in with a very well thought out consumer product flow. And he would look at the flows and he'd say, "That is not going to be compelling to users. That is not something that the user is going to engage to. Change it to this." And you say, "My God, why didn't I see that before?" So he's very, very good at thinking about how consumer products should be designed to maximize engagement and maximize – just growth is probably the best way to put it. The second thing he's amazing at is learning by following. When I joined, my task was to lead the ads product team. And Zuck at that point knew a little bit about ads, because he had worked with Sheryl quite closely. Sheryl had worked on ads before. But then within, I think about a year, he shadowed us. He came to the ads team. He basically sat with us. He came to many of our meetings. And within a year, he got to the point where he was generating ideas for the ads team. One of the most foundational ideas of Facebook ads came from what is called custom audiences. Custom audiences is the foundation of most ad systems now. It's the idea that, as an advertiser, you want to reach people who are similar to your customers. So if you're a bank and you have, say, 100,000 customers, how can you give this set of customers to your ad platform and say… look, instead of describing these customers, what did ad systems do before? They would describe their customers. "I think they are 25 to 34-year-old women." That's not good enough. Instead, if you can just tell us who your customers are and we can map it to our users, we can then find people similar to them. So uploading that data into our system securely and doing it in a way that doesn't compromise any PII was the key thing. And it all came from Zuck. How? Because Mark Pincus was the CEO of Zynga. Zynga was the largest advertiser on Facebook. So Zynga basically wanted to, like most gaming companies, they were very focused on acquiring whales. Because whales, for any gaming company, casino, et cetera, 80% of all revenue for any gaming company comes from whales. So he was very frustrated at us.
· Gokul Rajaram, Patrick O'Shaughnessy
We would do these quarterly reviews with Zynga on the ad side because there were large spenders on ads, and they would constantly be yelling at us saying, "We want to get more whales." We were like, "Yeah, you're getting users. It's your idea. You need to figure out how to get whales from your games. What do you want us to do? We can help you acquire users." So he once, I think, talked to Zuck. And Zuck came to us and said, "Why can't they just upload their whales into our system? We know who the whales are. Why can't we just find them people similar to those whales?" We were like, "That's interesting." But we actually didn't know who the whales were. So they needed to tag it for us, who the whales were. And basically, we started doing it similarly. We started finding users similar to the whales that they had. And it worked so well. Then we said, "Why don't we take this approach and use it for other types of customers who we didn't have data on?" It became truly a transformative thing for ads. And it was all Zuck's idea. He just has something about making connections between disparate domains, which is pretty amazing and unique. [00:00:00] S0: What did you learn from Jack and Tony?