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On Google Growing Up, Losing Employees & Being The New "California"

Google’s lost yet another high profile employee, apparently to Facebook. Another sign that Google’s slipping, to some. Perhaps. For me, Google has become the new “California,” stealing that role away from Yahoo. Come along a tale of equity refugees and companies growing up.

California: The Former Golden State

I’m a California native. I grew up in Southern California during what some might consider one of the state’s heydays, the 1970s. But as the 1980s unfolded, the state seemed to be in decline. House prices kept going up. People kept moving in. Traffic kept getting worse. People talked about leaving the state. People did leave.

In particular, people headed north up the West Coast. Seattle was a popular destination for many “equity refugees,” as I remember them being called back then. People would sell their relatively expensive homes in California and start afresh in Washington State, where the people were fewer, the traffic was less and the homes cheaper.

As a proud California native, my thought was generally, good! California had its problems. But California’s problems would be dealt with. People thinking they were “escaping” the state’s problems were likely to end up in a new place that would eventually encounter all the same issues.

The Grass Doesn’t Stay Greener

Guess what? I can remember visiting a college friend in the late 1980s who moved to Seattle. There was little traffic to speak of, that I recall. But that started changing (and all those refugees initially got much of the blame, as this classic Los Angeles Times article explains). Anyone who visits the region today knows what a nightmare traffic can be, a rival to what you’d find on plenty of California freeways.

Don’t get me wrong. California hasn’t been transformed into some idyllic paradise. And especially don’t get me wrong. I’m absolutely not saying that Washington State is somehow worse than California (or vice versa). The point is that as things mature, new challenges are faced, and jumping into greener pastures doesn’t mean those pastures will stay green, as they mature too.

Yahoo Refugees

This brings me to Yahoo. Years ago, the company went through an initial wave of losing employees. It was past its IPO. No one was going to become a billionare working there, much less a multi-millionaire. It was growing more bureaucratic, as large companies inevitably seem to become. I’d get asked by reporters about the moves, especially as people jumped to Google. My response was that Yahoo was like California, that it was maturing, facing a new set of challenges, but that Google would face those same challenges as it grew up.

I’d love to say that Yahoo came through its challenges and is a stronger company than back during its first employee exodus. It’s not. For a variety of reasons, leadership, bad business decisions, investors who couldn’t recognize the inherent value of Yahoo, I’d say that Yahoo is far weaker than it has ever been. That’s not to say it lacks value. That’s not to say it lacks a future. That’s not even to say that it can’t grow stronger in the future. But many would agree it still faces huge challenges.

The Adult Google

Now it’s Google’s turn. It’s not even “now,” in that Google has been losing existing employees for some time (while hiring new ones, of course). All the same problems Yahoo faced, Google faces now. You’re not going to become a multi-millionaire by working there, in most cases. There’s far more bureaucracy than when the company was smaller. Google’s the new California, with its own form of equity refugees, many of them heading over to Facebook.

Make absolutely no mistake. Facebook will go through its own California phase, in the future. After the company finally goes public, give it a few years, and existing employees will inevitably begin departing. Someone new, someone shiny, will attract them. Facebook will face the same “are the rats leaving the sinking ship” questioning that Yahoo faced, that Google now faces.

Those departures, however, are not necessarily a ship sinking, nor a state in decline. It’s just a consequence of companies getting older, of growing up. Good companies will manage their move into adulthood and remain successful. In Google’s case, despite the losses, the company is arguably stronger than it has ever been in many ways. Perhaps it will get even stronger. Possibly, it will decline, as the competitive space around it grows. But the departures alone don’t guarantee doom, just as when the inevitable Facebook departures happen, neither will they.

Sometimes You Can’t Keep Them On The Farm

I think it’s also important to have some perspective on some of Google’s departures. This week, news came out that Lars Rasmussen, the creator of Google Maps and one of the key figures behind Google Wave is likely heading over to Facebook. Giant loss for Google — how could they let him go?

There is no doubt that Rasmussen is incredibly talented. But perhaps the better question is, what else could Google do? While Rasmussen wasn’t a pre-IPO employee (his company was purchased by Google after it went public), somehow I suspect that he became fairly wealthy from his time at Google. Like many Google employees, more money wasn’t going to be what would keep him there. Something challenging might.

That challenge was Google Wave, launched in 2009 and killed earlier this year. I’ve seen some suggestions that Rasmussen left because Google killed Wave and thus, by extension, screwed up by costing the company Rasmussen’s loyalty.

From my perspective, Google threw incredible and fairly unprecedented amounts of support behind Wave. It was given a keynote status unveiling at Google I/O 2009. Google put a large amount of its corporate capital behind the project, not just money and engineering time but actual reputation capital.

Google Wave launched, and it flopped. I don’t care how many thousands of developers applauded when Wave was unveiled to the world in May 2009. I was in the audience, too, and as an end user, it didn’t seem like any revolution arrived. I didn’t get it, as I blogged about during the unveiling. When Wave finally got released to an audience of end users, I’d say most reacted the same way. Huh? What do I do with this?

I don’t know any of the backstory about Rasmussen’s departure. But looking from the outside, it sure looks like Google gave him full backing to bring out a major new project in a way it has done for relatively few other employees, from my time in watching the company. It just might be there was nothing left for it to offer. And for Rasmussen, Facebook just might be a more fertile ground, a better place to try something new.

Postscript: The Sydney Morning Herald has a good interview with Rasmussen up now, confirming his departure to Facebook and reasons for leaving Google. Among them:

  • Facebook as a “once in a decade type of company”
  • “Google was just not patient” in giving Wave more time to grow
  • Google’s too big whereas Facebook has a smaller size that allows for more impact and to get things done
  • A compelling financial deal

He also said neither he or Facebook have intentions to do something similar to Google Wave

Escaping The Google Shadow

Facebook COO Sheryl Sandberg is another classic example of the “What are you gonna do?” situation, to me. Here you have a talented person, already made incredibly wealthy through her work at Google. Money would be an unlikely motivator to keep her, I would say. A challenge would.

If you were Sandberg, which challenge would you rather have? Do something else at Google, where you’re still in the “shadow” of its founders, or the challenge of Facebook, where while the founder casts a huge shadow, there’s a chance for you to become a star on your own recognized for helping the company grow up?

As I look at some Google departures, I see some of them as with the cases of Rasmussen or Sandberg, where there was likely nothing more that Google could do. That’s not to say they’re not worrisome. Google’s inability to keep people like Evan Williams or Dennis Crowley potentially cost it from having Twitter or Foursquare built internally (Let’s Celebrate Google’s Biggest Failures! gets into this more). Google likes to think it nurtures a start-up culture, but that culture clearly didn’t work to keep those two start-up stars.

Google will continue to lose prominent employees, I have no doubt of that. Recent promotions of long-standing executives Marissa Mayer and Susan Wojcicki are in line with changes Google’s done with past executives, to help keep them with the company (see Megachart & Analysis: Google Executive Management Changes, 2000-2008). But even those moves can’t keep people forever.

Losses are an inevitable part of a company becoming older. But losses don’t necessarily mean a company is becoming weaker. Time will tell how Google grapples with leaving its adolescent era, of becoming an adult.

And California, despite its many problems, is still a pretty great place that millions call home.

For related observations on Google’s departures, see here on Techmeme.

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