Book Notes: How Google Works by Eric Schmidt

How Google Works” by Eric Schmidt, despite being quite self-congratulatory and maybe even prone to confirmation bias, is full of inspirational ideas and bids of practical wisdom to learn from. I took a few (ok, quite a few) notes on smart creatives, decision making, hiring, innovation, strategy, career, management and even managing email.

On smart creatives:

“And who, exactly, is this smart creative? A smart creative has deep technical knowledge in how to use the tools of her trade and plenty of hands-on experience. In our industry, that means she is most likely a computer scientist, or at least understands the tenets and structure of the systems behind the magic you see on your screens every day. But in other industries she may be a doctor, designer, scientist, filmmaker, engineer, chef, or mathematician. She is an expert in doing. She doesn’t just design concepts, she builds prototypes. She is analytically smart. She is comfortable with data and can use it to make decisions. She also understands its fallacies and is wary of endless analysis. Let data decide, she believes, but don’t let it take over.

She is business smart. She sees a direct line from technical expertise to product excellence to business success, and understands the value of all three. She is competitive smart. Her stock-in-trade starts with innovation, but it also includes a lot of work. She is driven to be great, and that doesn’t happen 9-to-5. She is user smart. No matter the industry, she understands her “get it right the next time around. She is self-directed creative. She doesn’t wait to be told what to do and sometimes ignores direction if she doesn’t agree with it. She takes action based on her own initiative, which is considerable.

She is open creative. She freely collaborates, and judges ideas and analyses on their merits and not their provenance. If she were into needlepoint, she would sew a pillow that said, “If I give you a penny, then you’re a penny richer and I’m a penny poorer, but if I give you an idea, then you will have a new idea but I’ll have it too.” Then she would figure out a way to make the pillow fly around the room and shoot lasers.

She is thorough creative. She is always on and can recite the details, not because she studies and memorizes, but because she knows them. They are her details. She is communicative creative. She is funny and expresses herself with flair and even charisma, either one-to-one or one-to-many.”



“Hippopotamuses are among the deadliest animals, faster than you think and capable of crushing (or biting in half) any enemy in their path. Hippos are dangerous in companies too, where they take the form of the Highest-Paid Person’s Opinion. When it comes to the quality of decision-making, pay level is intrinsically irrelevant and experience is valuable only if it is used to frame a winning argument. Unfortunately, in most companies experience is the winning argument. We call these places “tenurocracies,” because power derives from tenure, not merit. It reminds us of our favorite quote from Jim Barksdale, erstwhile CEO of Netscape: “If we have data, let’s look at data. If all we have are opinions, let’s go with mine.”

When you stop listening to the hippos, you start creating a meritocracy, which our colleague Shona Brown concisely describes as a place where “it is the quality of the idea that matters, not who suggests it.” Sounds easy, but of course it isn’t. Creating a meritocracy requires equal participation by both the hippo, who could rule the day by fiat, and the brave smart creative, who risks getting trampled as she stands up for quality and merit.”


On technical insights as a driver of innovation:

“Bet on technical insights, not market research. Product leaders create product plans, but those product plans often (usually!) lack the most important component: What is the technical insight upon which those new features, products, or platforms will be built? A technical insight is a new way of applying technology or design that either drives down the cost or increases the functions and usability of the product by a significant factor. The result is something that is better than the competition in a fundamental way. The improvement is often obvious; it doesn’t take a lot of marketing for customers to figure out that this product is different from everything else.

For example, at that time Google was experimenting in applying some of our expertise from online advertising to other advertising markets, including print, radio, and TV. These were clever efforts, supported by smart people, but they lacked that fundamental technical insight that would shift the cost-performance curve non-incrementally and provide significant differentiation. All three ultimately failed. And when we look back at other Google products that didn’t make it (iGoogle, Desktop, Notebook, Sidewiki, Knol, Health, even the popular Reader), they all either lacked underlying technical insights from the outset, or the insights upon which they were based became dated as the Internet evolved.”


On importance of hiring:

“For a manager, the right answer to the question “What is the single most important thing you do at work?” is hiring.

The passionate person will often talk at length, aka ramble, about his pursuits. This pursuit can be professional. In our world, “perfecting search” is a great example of something people can spend an entire career on and still find challenging and engaging every day. But it can also be a hobby. Andy Rubin, who started Android, loves robots (and is now spearheading Google’s nascent efforts in that area). Wayne Rosing, Google’s first head of engineering, loves telescopes. Captain Eric loves planes and flying (and telling stories of flying planes).


Once they start, listen very carefully. Pay attention to how they are passionate. For example, athletes can be quite passionate, but do you want the triathlete or ultra-marathoner who pursues his craft all alone, or someone who trains with a group? Is the athlete solo or social, exclusive or inclusive? When people are talking about their professional experience, they know the right answers to these questions—most people don’t like a loner in the work environment. But when you get people talking about their passions, the guard usually comes down and you gain more insight into their personalities.

You probably know someone whose résumé is truly exceptional: someone who climbed K2, is an Olympic-class hockey player, published a critically acclaimed novel, worked her way through college and finished cum laude, just had an art exhibit, started a (real) nonprofit, speaks four languages, owns three patents, codes top-100 apps for fun, plays lead guitar in a band, and once danced onstage with Bruno Mars. If you know at least one person like that, then it stands to reason that everyone you work with knows one of them too. Then why do you let only recruiters handle recruiting? If everyone knows someone great, why isn’t it everyone’s job to recruit that great person?

When asking about a candidate’s background, you want to ask questions that, rather than offering her a chance to regurgitate her experiences, allow her to express what insights she gained from them. Get her to show off her thinking, not just her résumé. “What surprised you about…?” is one good way to approach this, as it is just different enough to surprise a candidate, so you don’t get rehearsed responses, and forces her to think about her experiences from a slightly different perspective. “How did you pay for college?” is another good one, as is “If I were to look at the web history section of your browser, what would I learn about you that isn’t on your résumé?” Both of these can lead to a far better understanding of the candidate. They are also quite specific, which helps you gauge how well someone listens and parses questions.

Scenario questions are often helpful, but more so when interviewing more senior people, because they can reveal how a person will use or trust their own staff. For example, “When you are in a crisis, or need to make an important decision, how do you do it?” will often reveal if a candidate is of the “if you want something done, do it yourself” ilk, or if they will rely on the people around them. The former is more likely to get frustrated with the people who work for them and thus hang on to control, the latter more likely to hire great people and have faith in them. Generic answers to these questions indicate someone who lacks insight on issues. You want the answers to be interesting or at least specific. If the answers you get are cut and pasted from marketing claims, or are simply the reflection of commonly held wisdom, then you have a generic candidate, one who will not be adept at thinking deeply about things.”


Career advice:

“Think about your ideal job, not today but five years from now. Where do you want to be? What do you want to do? How much do you want to make? Write down the job description: If you saw this job on a website, what would the posting look like? Now fast forward four or five years and assume you are in that job. What does your five-years-from-now résumé look like? What’s the path you took from now to then to get to your best place?

Keep thinking about that ideal job, and assess your strengths and weaknesses in light of it. What do you need to improve to get there? This step requires external input, so talk to your manager or peers and get their take on it. Finally, how will you get there? What training do you need? What work experience? By the way, if your conclusion is that you are ready for your ideal job today, then you aren’t thinking big enough. Start over and make that ideal job a stretch, not a gimme.

When people are right out of school, they tend to prioritize company first, then job, then industry. But at this point in their career that is exactly the wrong order. The right industry is paramount, because while you will likely switch companies several times in your career, it is much harder to switch industries. Think of the industry as the place you surf (in Northern California the most rad waves are at Mavericks, dude) and the company as the wave you catch. You always want to be in the place with the biggest and best waves.”


On dealing with email effectively:

“When writing an email, every word matters, and useless prose doesn’t. Be crisp in your delivery. If you are describing a problem, define it clearly. Doing this well requires more time, not less. You have to write a draft then go through it and eliminate any words that aren’t necessary.

“Clean out your inbox constantly. How much time do you spend looking at your inbox, just trying to decide which email to answer next? How much time do you spend opening and reading emails that you have already read? Any time you spend thinking about which items in your inbox you should attack next is a waste of time. Same with any time you spend rereading a message that you have already read (and failed to act upon).
When you open a new message, you have a few options: Read enough of it to realize that you don’t need to read it, read it and act right away, read it and act later, or read it later (worth reading but not urgent and too long to read at the moment). Choose among these options right away, with a strong bias toward the first two. Remember the old OHIO acronym: Only Hold It Once. If you read the note and know what needs doing, do it right away. Otherwise you are dooming yourself to rereading it, which is 100 percent wasted time. If you do this well, then your inbox becomes a to-do list of only the complex issue. To make sure that the bloat doesn’t simply transfer from your inbox to your “take action” folder, you must clean out the action items every day. This is a good evening activity. Zero items is the goal, but anything less than five is reasonable. Otherwise you will waste time later trying to figure out which of the long list of things to look at.”

Handle email in LIFO order (Last In First Out). Sometimes the older stuff gets taken care of by someone else.

Make it easy to follow up on requests. When you send a note to someone with an action item that you want to track, copy yourself, then label the note “follow up.” That makes it easy to find and follow up on the things that haven’t been done; just resend the original note with a new intro asking “Is this done?”

“Help your future self search for stuff. If you get something you think you may want to recall later, forward it to yourself along with a few keywords that describe its content. Think to yourself, How will I search for this later? Then, when you search for it later, you’ll probably use those same search terms. This isn’t just handy for emails, but important documents too. Jonathan scans his family’s passports, licenses, and health insurance cards and emails them to himself along with descriptive keywords. Should any of those things go missing during a trip, the copies are easy to retrieve from any browser.


On how sometimes it makes sense to launch products without a clear monetization strategy:

“About eight months later, Google Earth, which was based on Keyhole technology, launched. It was an immediate hit with users, and also generated millions of dollars. How could that be, since there were no ads on the app and it was free? Not long after we launched it, one of our smart creatives, Sundar Pichai, realized that all those people who were downloading and installing Google Earth might be interested in Google Toolbar as well. Toolbar was a simple utility that integrated with the browser. It had a lot of interesting features for users, one of which was a little Google search box that constantly resided in the browser’s interface. People with Toolbar could initiate a Google search without going to, so they tended to conduct more searches, click on more ads, and generate more revenue. Sundar’s idea met some resistance, but, with a push from Urs Hölzle, it was quickly implemented. This simple insight—that people downloading Earth might be interested in getting Toolbar as well—increased Toolbar’s user base significantly and generated lots of revenue.”


On transparency of everyone’s goals:

“OKRs are another great example of transparency. These are an individual’s Objectives (the strategic goals to accomplish) and Key Results (the way in which progress toward that goal is measured). Every employee updates and posts his OKRs company-wide every quarter, making it easy for anyone to quickly find anyone else’s priorities. When you meet someone at Google and want to learn more about what they do, you go on Moma and read their OKRs. This isn’t just a job title and description of the role, it’s their first-person account of the stuff they are working on and care about. It’s the fastest way to figure out what motivates them.”


On a better way to conduct a Q&A session:

“Another example is TGIF. The weekly company-wide meeting that Larry and Sergey host has always featured a no-holds-barred Q&A session, but as the company grew, this got harder and harder to manage. So we developed a system called Dory. People who can’t (or don’t want to) ask a question in person can submit it to Dory (named after the memory-challenged fish in Finding Nemo, though, like Dory herself, we can’t recall why), and when they do, others get to vote on whether it’s a good question or not. The more thumbs-up votes a question receives, the higher it goes in the queue, and the tougher questions tend to get a lot of thumbs-up. At TGIF the Dory queue is put on the screen, so as Larry and Sergey go through the questions they can’t cherry-pick which ones they want to answer. They just go down the list, top to bottom, tough questions and easy. Dory lets anyone directly ask the CEO and his team the toughest questions, while the crowdsourcing aspect of it keeps the lame questions to a minimum. Lame answers, on the other hand, are judged in a much lower-tech fashion: TGIF attendees are equipped with red and green paddles and encouraged to wave the red paddles if they don’t feel the questions are fully addressed.”


How “coopetition” or “frenemy” type of relationship calls for good old diplomacy:

“To build platforms and successful product ecosystems, companies must work with partners. This often creates interesting situations (and bastardized words: “coopetition,” “frenemy”) where the two companies may be competing in some realms but collaborating in others. The key to success in these situations lies in one of the oldest of the communications arts: diplomacy. In many ways, complex business partnerships are similar to the realpolitik style of diplomacy between countries, which holds that relations should be managed based on pragmatic, not ideological principles. Countries can have a long list of grievances with each other, but it is in their mutual best interests to figure out a way to work together. The alternative—a lack of a relationship, or war—is destructive for everyone. For example, China and the United States have lots of issues, but there is so much trade between the two countries that we must find ways to maintain and build our relationship in spite of our differences.”


Budgeting investment in core business, emerging products and new opportunities:

“About 70 percent of the projects were related to the core businesses of search and search advertising, about 20 percent were related to emerging products that had achieved some early success, and about 10 percent involved completely new things that had a high risk of failure but a big payoff if successful. That started a lengthy discussion, the end result of which was that 70/20/10 became our rule for resource allocation: 70 percent of resources dedicated to the core business, 20 percent on emerging, and 10 percent on new.”

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