Fred Vogelstein publishes an interview from 2005 with Eric Schmidt, Google's CEO. The interview is a fascinating conversation about how Schmidt along with founder Larry Page and Sergey Brin ran and, based on recent conversations, continue to run the most interesting and profitable company in a generation. In it Schmidt talks about what it was like to join Google back in 2000 when it wasn’t yet making money, how the company almost disintegrated amid bickering over how to partner with AOL in 2002, how he was ultimately able to bond with the twopowerful founders when most other executives would have become frustrated, and how flying his own jet helps him manage.
Fred Vogelstein: When you and I talked a month ago, you mentioned that you thought about the Dell model a lot when you run Google. Can you explain in more detail what you meant by that?
Eric Schmidt: Well, there's a couple of positive analogies for Google, I think. One is Intel, one is Sony, and one is Dell. And I think each of them have strengths. Intel is easy. When they came over to visit with us, Larry and Sergey and I looked around and said we wantto have our executives be as precisely knowledgeable as these people. In every case they were very precise with respect to facts; they were on top of things. If you asked them a question they'd give you a crisp answer - none of this wandering around that goes on in the industry. It's characteristic of the Intel style, so that was very impressive. I'm not talking about the other aspects of the style- the paranoia and all. I'm just talkingabout the fact that they were very, very, very knowledgeable. And in order to do that, you have to have a high IQ, and you have to have a discipline around knowledge. Sony is the best example of what Google is trying to emulate in innovation.
That seems counterintuitive given the kind of problems Sony is going through right now. But if you look over a 20-year period - and a lot of it had to do with (Akio) Morita, who was the CEO - they built a culture on innovation and people -- and I remember this in studying it. Maybe they're having trouble now, but if you integrate Sony over the long time, they're the ones who always bring out the slightly different product that has a different solution that's interesting. You can debatewhether memory disks, memory cards make sense, right, but they came out, they saw the memory stick; they solved a specific problem. And they built this odd little book reader thing which didn't work, and then they had this odd little new format around recorders which didn't work, and, of course, they have the Walkman and the watch.
You mean they're not afraid to fail? Thank you, that's the point. Sony says it's perfectly fine for product A to fail because we're all going to work together for the next 50 years, so we’ll just try something new, just keep going.
Wouldn’t you be more interested in the Intel innovation cycle than the Sony innovation cycle, because a big part of Intel's success has been the speed of its innovation -- a new chip every 18 months to two years.
Well, I'm not sure I completely agree with that, because that's largely determined, not by product innovation but rather process innovation. Intel is particularly good at implementing Moore's Law at scale with fabs, and they really are amazing with capital use, deployment, planning and so forth. And much of their success in the last ten years has been basically because of the people who (former Chairman and CEO) Andy (Grove) put in place actually knew how to spend 2 or $3 billion prospectively on a fab line.
View: Full interviewGoogle, Eric, Schmidt, CEO, Larry Page, Sergey Brin, Interview, Wired