Google and the Contrarian Business Model
How Google’s Contrarian Approach Made the Difference
When Google released its search engine in 1998, its search results were significantly better than its competitors’. Many people attribute Google’s success to this breakthrough technology. But there was another key reason: a stubborn refusal to accept the orthodox view at the time that “stickiness” was crucial to a website’s success. Here’s what happened when they tried to sell their technology to Excite (a leading portal/search engine in the late 90s):
[Google] was too good. If Excite were to host a search engine that instantly gave people information they sought, [Excite's CEO] explained, the users would leave the site instantly. Since his ad revenue came from people staying on the site—“stickiness” was the most desired metric in websites at the time—using Google’s technology would be counterproductive. “He told us he wanted Excite’s search engine to be 80 percent as good as the other search engines,” … and we were like, “Wow, these guys don’t know what they’re talking about.” – Steven Levy, In The Plex (p. 30)
Famed investor/entrepreneur Reid Hoffman says world-changing startups need to be premised on “accurate contrarian theories.” In Google’s case, it was true but non-contrarian to think users would prefer a better search engine. What was true and contrarian was to think it made business sense to get users off their site as quickly as possible. The business model to support this contrarian theory wouldn’t emerge until years later, and by then Google would already have become the world’s most popular search engine.
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