Google’s Entered Your Business

There was an expectant silence around the room. The projector was flickering a website on the white screen. There were about ten senior executives of the company around a long table and one of them was standing – obviously the guy doing the presentation. Cookies and Diet Coke were laid out but no one seemed interested in them. The occasion was not one to be taken lightly. Google had just entered our business

The time was the summer of 2006 and Google had announced Google Finance a few weeks back, thus bringing the engineering and search giant right in the middle of the market data and investment analytics business. The feeling in our company – a strong incumbent in that market – was that of curiosity mixed with generous amounts of concern. “Anyone who is not Google should be afraid of Google”, a voice in the room said. But then what does a search company has to bring in market data and investment analytics? A lot debate ensued as did a lot of predictive analysis but at the end of it all I had my first taste of the question I were to later find quite omnipresent when discussing business strategy – “what if Google enters your business?”

In my experience of speaking with startups in Bangalore, I am told it is not uncommon to be asked this question by investors – especially if your business happens to be technology led. Thus I think a bit of analysis is perfectly in order to understand what it has meant as Google’s reputation to disrupt existing businesses and markets

Firstly, the moment Google enters your business go buy the cheapest champagne around (remember you are a startup) and celebrate. Google’s trespassing your business validates your market, business idea as well as the future potential of the industry you wish to play in. Congratulate yourself that you were able to think of this business – perhaps with zero resources – earlier than Bain and Mckinsey spending giant corporation was. One thing that Google (or for that matter any subsequent entrant) will never be able to will have to work hard to surmount is your first mover’s advantage (but remember, fast seconds often win)

After the initial bout of anxiety has passed, get your team together to think what does Google bring to the table in your business. Now remember that Google has awesome technologists working for them (fed with gourmet food as opposed to your pizzas) so it has engineering firepower much beyond yours. But then engineering may not be your “business”. And outside of two core businesses – search and advertisement – Google really has not been a handsdown success. Take even more heart if your business has social elements to it because Google just does not get social

But also take this opportunity to look inwards and answer (yes, once again) what your business is about. Peel the layers back until you arrive at a simple sentence describing your business that even your grandmother will understand. Reduce complexity and find your hedgehog as soon as you can. One big reason why Google has struggled in making inroads into different businesses is because it has spread itself very thin. As Om Malik explains in this article, Google wants to fight Facebook, Amazon, Microsoft, Yelp, Apple, Square – everyone – and draws parallel of dire consequences that otherwise brilliant generals had to face in their careers pursuing similar multi-front strategies in warfare

All businesses must build deep moats around themselves. These could be of different types but without a moat, businesses are vulnerable. Small businesses are even more vulnerable in this aspect. Examine your moat – and if you notice yours does not exist or isn’t deep enough, rectify the situation on a priority. Remember how once Flipkart was the darling business in India’s ecommerce? Today there are half a dozen other ecommerce ventures that do what Flipkart also did to “differentiate” itself – cash-on-delivery, low (some say lower than Flipkart) prices, deep catalog and great customer service. Flipkart had moats but they weren’t deep enough

So here’s the deal – Google (I have been using Google as bit of a metaphor. It could mean any other heavyweight as well) entering your business is a great thing. Businesses are never built around cowering down to new entrants. Remember however that new entrants sometimes can be looking at your business much differently than you have been all along

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