- In 1999, before Google was a well-known (or well-funded) company, its founders, Larry Page and Sergey Brin, were discussing it with a new board member.
- The new board member, the venture capitalist John Doerr, asked Page and Brin how big they expected their company could be, and Page shot back with a number that few companies had reached at the time, far exceeding Doerr’s projection.
- Page predicted the company would generate $US10 billion in revenue, which Doerr calculated to be equivalent to $US100 billion in market capitalisation.
He’s one of the richest people in the world today, but in 1999, Larry Page was the young cofounder of a relatively unknown company called Google with big plans for its future.
Page and his cofounder Sergey Brin’s goal was to “organise the world’s information and make it universally accessible and useful,” the venture capitalist John Doerr recalls in his book “Measure What Matters.” But first, Doerr, who had already invested $US11.8 million to take a 12% ownership stake and a board seat, had to help them organise their newly incorporated company.
To gauge their confidence, Doerr asked Page and Brin how big the company could one day be, having already privately projected that it could be worth $US1 billion “if everything broke right.”
“Ten billion dollars,” Page responded.
“You mean market cap, right?” Doerr asked. But Page said he expected the company to generate $US10 billion in revenue, implying an estimated market cap of about $US100 billion.
That triple-digit billion-dollar valuation is relatively common today, but in 1999, it was a rarity. Even Yahoo, Google’s chief competition in the early days, was worth considerably less than $US100 billion for most of that year, hovering in the range of $US40 billion to $US60 billion.
In other words, Page was predicting that Google would crush Yahoo – before the cofounders had even figured out how it would make money.
“I was floored,” Doerr wrote.
Page and Brin had come to his office earlier that year to pitch him on what would be the 18th search engine on the web, using a 17-slide PowerPoint deck that had only two slides of numbers. They were convinced their algorithm could fix the “poor quality of search in the market,” regardless of their lack of a business plan or management experience – two things Eric Schmidt brought to the table when he became the first CEO of Google.
From the get-go, Page and Brin were “self-assured, even brash, but also curious and thoughtful,” Doerr said. “They listened – and they delivered.” That’s a vast understatement, of course, considering that 19 years later, Google is eight times the size Page said it would be and in the running to be the first trillion-dollar company.