Scaling a business — with the human touch

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Googleplex
The Googleplex (doesn't sound quite right to call it the Alphabetplex . . .part of the summit is held on the Google campus.)
Chromebook
My new Chromebook and back-pack, Google’s gift

One of the greatest business challenges is the ability to combine humanity, creativity and scalable experience. Small businesses can be nimble, the owner is accessible, and (if things are running properly), decisions can be made quickly and in rapid response to the market.

There are inherent efficiencies in smallness, and probably the ideal business size for true productivity (that is, revenue per employee) is about three. Here, partners/colleagues can share big picture responsibilities, but there isn’t much networking cost or overhead. You can’t hide in the shadows. A three-legged stool may be awkward, but all three legs will touch the ground even if they aren’t the same length.

I’ve seen some studies (I’m not sure I can find exactly where they are, at 6 a.m. in California), which show a declining productivity curve from four to 10 employees. Probably for most small businesses, this is one of the biggest hurdles to growth. Your new employees simply are less productive than your core three. There’s more risk of confusion, disorder, systems inefficiency, miscommunication, and time-wasting duplication — so you generate less revenue per employee, putting more pressure on your need to achieve satisfactory margins.

Above 10 employees, things get even more challenging, though productivity-per-employee remains reasonably consistent. As your business grows, you can add specialists, and little things become bigger in importance.

Then there is Google.

Yes, the business started in a garage 15 years ago, and is now one of the world’s largest businesses, with about 45,000 employees and a market capitalization of about $290 billion. The productivity per employee is impressive. I hope I haven’t miscalculated this (comment if I’m wrong), but these numbers suggest that if Google was an employee co-op rather than a public company, each employee would have a personal net worth of about $650,000. This data is public information from Google’s published financial reports.

The intriguing question is how Google achieved this scale. I’ve learned some specific numbers relating to overall transaction volumes and some amazing problems that occur on this scale but cannot share them because of non-disclosure agreement requirements. (The NDA is a two-edged sword. You can’t share information, but within the community, you can speak much more freely, so I will certainly respect it.)

Nevertheless, I can share the obvious fact that Google needs to be extremely systematized and automated to be viable. There’s no way this number of employees could handle the number of transactions, sometimes on a micro scale, individually. These challenges are especially great for the program on which I focus my energies — the AdSense ad-serving service, which places contextual ads on a truly astounding number of websites in virtually every country of the world, and for which Google remits about 70 cents on each dollar to the individual publishers, with payouts when accounts reach $100.

(I’ve been interested in AdSense for some time, relating to my understanding of advertising trends, but the revenue to my business from this source is tiny, less than $100 a month.)

How does Google solve the humanity and scaling problem, then? Well there are a number of techniques, some of which were described under the NDA provisions, so I cannot share them here.  However, clearly there was a reason that the company invited slightly more than 500 people from dozens of countries around the world to the summit.  Google needed to hire enough simultaneous translators to fill 16 translation booths — it felt like the United Nations.

We are all essentially help and community forum moderators, or  Top Contributors.  Google became aware that there are  “power users” for each of its products, and established the community or peer/based forums to allow interaction, sharing and help.

Then — and this is a symbol of the company’s effectiveness, Google’s management discerned that the Top Contributors could be a valuable resource in connecting the massive number of end-users to the relatively small number of Google employees, creating a feedback loop (and perhaps allowing for individual, human, problems to be resolved even if the overall process needs to be extremely automated.)

This awareness, combined with a business model that  brings experts and leaders together in California for knowledge-sharing (and, for Google, data-gathering) opportunities, resulted in the beginning of the Top Contributor Summit program. I attended the first TC summit two years ago, and am at the second now.

The beauty of the summits of course is the human interaction and individual relationships that build and develop in this context. This stuff isn’t cheap and we were all somewhat floored when we learned we would each receive our own  Google Chromebook. These retail for $249 each.

I cannot say how much this event cost Google — but considering the travel costs (there were visitors from every continent but Antarctica), translation, hotel fees, food and drink, and even the number of buses that needed to be available for shuttles, it is getting into the millions. Enough to blow the budget of smaller businesses, that is for sure.

Yet, as participants, we know that Google is spending this money from a pragmatic and profit-generating perspective. The communication, human interaction and data gathering undoubtedly help fuel the Google engine. As voluntary Top Contributors, we may be small cogs in the big wheel, but we certainly aren’t made to feel that way at this kind of event.

The summit continues today, with more sessions in San Jose, followed by bus rides to Mountain View and the wrap up sessions and party at the Googleplex. I’ll have some photos and images from the public areas for tomorrow’s blog posting (photos are not permitted within the Google offices, and work areas, though.)

Take-aways so far:

  • Businesses can scale with humanity by recognizing and appreciating key relationships and encouraging interaction and community development;
  • Volunteerism and selfless sharing has its rewards. While I am not paid  by Google for helping out on the forum, I’ve certainly gathered greater insights and understandings of this company, successful business, and innovation;
  • Humanity can be baked into even the largest and most systematized businesses. Yes, you can create systems and processes to ensure that no one feels like they are “just a number”.
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