There’s this idea out there — inadvertently propagated by early Googlers themselves, no doubt — that Google (GOOG) didn’t worry about making money in its early years and instead only focused on making its product work better for users.
For example, during an interview with FOX Business yesterday, Twitter cofounder Jack Dorsey told Liz Claman:
“The reason we took VC money is so we could be patient enough, so we could recognise and listen in what’s happening with the usage and then try to monetise from that. Another company did the same thing, which is Google.”
Mostly, what Jack is saying is correct. But startups today take the lesson and blow it way out of proportion.
Early on, Google was actually very aggressive about trying to figure out ways to make money. The reason it took the company so long to come around to auction-sold search advertising that now makes it billions every year was because it tried a bunch of other stuff first.
Before Google settled on cost-per-click ads, it actually sold advertising against its search results on a cost-per-impression basis. Before that even, Google cofounders Larry Page and Sergey Brin thought the company’s big money would be in selling enterprise search. They didn’t hire the CEO of an enterprise software firm for no reason.
The point is, if startups like Twitter want to draw a lesson from Google’s early days, it’s that they should be trying all kinds of different models to see what works. Not preaching about the sancticty of the user-experience while the burn rate blows out and hype grows cold.
Here’s Jack Dorsey on Fox Biz: