BUSINESS BLOGS
BUSINESS BLOGS
category: business
30 Jun 2008

Yesterday the NY Times wrote an article mentioning that no VC-backed firm did an IPO in Q2 2008.  I observed that VCs were basically becoming useless by backing largely useless companies.  I was not alone, the main argument was leveled by VC Paul Kedrosky.

A reader of this blog echoed the same thing, and today, the last major IPO to hit the tech space - Google - shows why we go eons between IPOs:

I left [Google to back to MSFT] because Microsoft turned out to be the right place for me.

First, I love multiple aspects of the software development process. I like engineering, but I love the business aspects no less. I can’t write code for the sake of the technology alone - I need to know that the code is useful for others, and the only way to measure the usefulness is by the amount of money that the people are willing to part with to have access to my work.

Sorry open source fanatics, your world is not for me!

Google software business is divided between producing the “eye candy” - web properties that are designed to amuse and attract people - and the infrastructure required to support them.

Some of the web properties are useful (some extremely useful - search), but most of them primarily help people waste time online (blogger, youtube, orkut, etc).

All of them are free, and it’s anyone’s guess how many people would actually pay, say $5 per month to use Gmail. For me, this really does make the project less interesting if people are not willing to pay for it.

This orientation towards cool, but not necessarilly useful or essential software really affects the way the software engineering is done. Everything is pretty much run by the engineering - PMs and testers are conspicuously absent from the process. While they do exist in theory, there are too few of them to matter.

On one hand, there are beneficial effects - it is easy to ship software quickly. I’ve shipped 3 major features (a lot of spell checker and other stuff in the latest Gmail release, multi-user chat in Gmail, and road traffic incidents in Google Maps), and was busy at work on my fourth project in just a year. You can turn really quickly when you don’t have to build consensus between 3 disciplines as you do at Microsoft!

On the other hand, I was using Google software - a lot of it - in the last year, and slick as it is, there’s just too much of it that is regularly broken. It seems like every week 10% of all the features are broken in one or the other browser. And it’s a different 10% every week - the old bugs are getting fixed, the new ones introduced. This across Blogger, Gmail, Google Docs, Maps, and more.

This is probably fine for free software, but I always laugh when people tell me that Google Docs is viable competition to Microsoft Office. If it is, that is only true for the occasional users who would not buy Office anyway. Google as an organization is not geared - culturally - to delivering enterprise class reliability to its user applications.

The culture part is very important here - you can spend more time fixing bugs, you can introduce processes to improve things, but it is very, very hard to change the culture. And the culture at Google values “coolness” tremendously, and the quality of service not as much. At least in the places where I worked.

Since I’ve been an infrastructure person for most of my life, I value reliability far, far more than “coolness”, so I could never really learn to love the technical work I was doing at Google.

The second reason I left Google was because I realized that I am not excited by the individual contributor role any more, and I don’t want to become a manager at Google.

Read more on the why I left Google to go back to MSFT here.