Strategy – your plan is wrong. Chapter 2 of "How Google Works"

MBA style business plans are always flawed. This is why venture capitalists always invest in the team and the people - not the plan itself. It is ok to have plans as long as it is understood that things will change and we will figure it out down the path. Iterations are more important than plans.

Even though the plan is fluid, it is important to make the foundation of the plan stable. Give smart people the foundation and let them figure out the rest.

Products should be defined by how much value they provide the user, not how much value they provide Google. Revenue streams can be figured out later. Rely on creating technical insight that drives cost of existing product down or increases usability or functions. Don’t use MBA or Porter logic of figuring out what you are good at and leverage that to expand into adjacent markets.

Google resisted placing ads on their search site and focused on the user experience itself. When noticing accelerated advertising by customers trying to meet their forecast numbers, Google warned them that it would negatively affect their user experience. Google’s focus is growth over revenue.

Competitors are important but you should not follow them too closely. You cannot innovate though imitation. Competitors can however be powerful motivators like Bing was for Google.

Market research is ok but not more important that technical insights. The best things about market research consultants. They are easy to blame and fire when they are wrong.  Google products have always been based on technical insights. This has been proven in a 2009 review of all products. All great products had technical distinction.  A number of perceived popular products that eventually flat lined, were also found to lack technical distinction. Focusing on number of users can trick you into believing you have created a good product.

We have entered an age of combinatorial innovations – the building blocks of new technology. You need to find out who the geeks are in your company.  The areas they are working on is where you find your technical distinction

Most new innovations enter the world in a primitive state focused on a narrow problem and needs to be refined.  The first effective porn filters that Google invented where based on behaviour of people searching for porn. These users effectively defined porn so Google where able to filter it for others. This later developed into technology that was able to define the content of all images on the internet based on the search people used to find them.

Defining products based on technical insights instead of market research prevent me too products. Henry ford: “If I had listened to customers I would have been looking for faster horses.”

In order to achieve something big it is not enough to grow - you need to be able to scale. This is what Google calls a “grow big fast strategy”. It is based on creating platforms that bring together users and providers (much like YouTube) in multisided markets. The power is in creating the network.

Open platforms are more capable of disruption because it attracts other companies and talent to help co develop to drive down cost and increase functionality. All of this disrupts the owners of closed platforms business.

Rather than locking in the customer, Google has a team that is working towards making it easy for user to leave Google.  Google believes that user freedom is in the best interest of the company.