3 comments

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  BrianSullivan

  1 year ago

  Isn't this a bit of strawman? "The Internet" was not a corporation or enterprise. It was a collection of networked computers tied together by mutual agreement. You can bet though that the corporations/enterprises offering access to the internet did have a business plan.
  
  The fact that Google succeeded but existed so long without a strategy where more revenue was generated than was needed to cover costs was generated was an anomoly. It is not the rule. For every business that succeeded using that strategy there are thousands that failed. The history of tech and Silicon valley are full of the bodies.
  
  This kind of thinking fuelled by ego and greed is exactly what caused the first technology bubble to burst and will cause another. Evenutally somebody has to pay the piper.
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  mathewi

  1 year ago

  I would argue that it's more of a metaphor or an analogy than a
  strawman, Brian. You're right that the Internet wasn't a corporation,
  but there were all kinds of corporations and other entities involved
  who could have pursued the business aspects of the technology --
  patenting, licensing etc. -- and thereby prevented it from growing as
  quickly or as broadly as it did. That's my point, really -- not that
  every company should ignore the business aspects of what they're
  doing, but that there is a lot more to it than just that.
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  mikepk

  1 year ago

  I think this points to a more fundamental issue for startups, the idea of muddled purpose. One of the problems with being in the startup space is keeping a sense of purpose *and* making money to fuel your purpose. When asked 'why build a startup', most people would answer 'to make money'. I don't think this is exactly right and where the criticisms of not having a business plan arise. I like this quote from Peter Drucker on the idea of profit:
  
  

  Asked what a business is, the typical business man is likely to answer, "An organization to make profit". The typical economist is likely to give the same answer. The answer is not only false, it is irrelevant.
  
  The prevailing economic theory of the mission of business enterprise and behavior, the maximization of profit [...] cannot explain how Sears, Roebuck or any other business operates, or how it should operate. The concept of profit maximization is, in fact, meaningless. The danger in the concept of profit maximization is that it makes profitability appear a myth.
  
  Profit and profitability are, however, crucial---for society even more than for the individual business. Yet profitability is not the purpose of, but the limiting factor on business enterprise and business activity...

  
  - "The Essential Drucker", Peter Drucker
  
  In both cases, google and the internet, they had purpose from their inception. The internet's purpose was to build a reliable, fault tolerant communication infrastructure in the event of a disaster.
  
  As an aside, for the early internet what's really interesting are the network economics at play where the distributed system brought enough value (not necessarily monetary) to each member that it was incentive enough for them to participate. "The internet" never needed to make money, it's value derives from an economy of connection. It's a mind-bender because it's the thing itself (interconnectedness) that was the currency.
  
  For startups like the early google, the job is frequently to pursue your main purpose while probing the value space of what you're doing. I actually see a real danger in the future of Google. They are no longer an exploration of an academic thesis or, as their vision evolved, to organize the world's information, they are becoming an advertising company. What's dangerous is that their profit motive frequently contradicts their original vision instead of complimenting it. We're seeing this transition of purpose already, especially with the growth pressure from Wall Street which will only get more powerful. We'll see if they're able to balance this force in the company against their original vision.
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