Nick Carr wrote a long post yesterday on how Google is rationalising its product set and changing strategy from launching lots of products and seeing what sticks to having a simple suite of around 5 products.
In related news they announced Google Answers won’t be answering any more after the end of the month. (This link shows Wikipedia at its best – up to date for news that is only a week old.)
I assume this also means the end for Google’s famous 20% rule which gave every employee one day a week to innovate on whatever they liked. That innovation will require a bit of co-ordination now. Business Innovation Insider reported in May that this rule might be on the way out.
I was never a believer in the machine-gun-launch-lots-of-products-strategy. When I was at Reuters we had a similar idea. We were cash rich but in dire need of new products to drive growth, so the company put a lot of its best brains into a single division, ReutersSpace, and told them to go innovate. There were many, many, initiatives, but nothing that went on to make much difference to Reuters operationally (the corporate venture team made a big contribution for a while). There are many problems with this model, but two of the biggest are that the people are not hungry like they would be in a start up and that the bad ideas don’t get killed as effectively as they do in start up land. In fact, connections to the boardroom can prove as important as genuine merit in getting funding for a project.
It is well documented that innovation is difficult inside big companies. I think the best way is to have a clear strategy which determines the markets you want to play in and then focus your innovations on products that will help you win in those markets.
So IMHO this is a good move from Google.
It is also good news for VCs and entrepreneurs. It should make it easier to figure out where Google will play in the future and plan start-ups and financings accordingly. This is the way networking start-ups have dealt with Cisco for years.