Book summary “What would Google do?”: summary

Introduction

You run a traditional business in a world upended by digital networks, rising customer demands, and failing legacy models. Traditional advertising and rigid management structures no longer protect you from nimble competitors and empowered consumers.

To succeed in the internet age, traditional businesses must adopt Google's core principles of radical transparency, customer control, and open platforms.

Jeff Jarvis argues that the internet demands a total reversal of old business logic. You must learn to let go of control, treat customers as partners, and build open ecosystems.

The book explores how you can apply these digital lessons across four major areas.

• How do you shift your relationship with empowered customers?
• How does network architecture change the way you organize your company?
• How do you thrive in a post-scarcity economy of abundance?
• What new ethical imperatives must you embrace to survive?

1. New Relationship

When powerful institutions attempt to retain absolute control and ignore customer dissatisfaction, they trigger fierce public backlashes. Conversely, treating customers with respect and giving them a voice turns them into generous collaborators and advocates.

Companies must willingly cede control to their customers because the internet empowers people to organize, speak out, and take back control.

Jeff Jarvis experienced this power firsthand after buying a lemon laptop and enduring terrible customer service. He wrote a critical blog post titled "Dell sucks" after he was told he would lose his computer for 7-10 days for in-home service. That post sparked a viral movement called a blogstorm and generated 600 responses, severely damaging Dell's stock price and sales.

This phenomenon illustrates Jarvis' First Law: give the people control and they will use it. You must learn to stop fighting your customers and start listening to them instead.

Give the people control

Traditional institutions built their power on controlling information, choices, and access, believing this would engender trust. In the internet age, this approach backfires. True trust requires transparency, sharing, and empowering people rather than treating them like subjects.

There is an inverse relationship between institutional control and public trust; the more an organization controls, the less it is trusted.

A 2008 Harris survey found that 54 percent of Americans do not trust news media. A Sacred Heart University poll revealed that only 19.6 percent of people believe all or most news media. Meanwhile, 61 percent of Britons trusted BBC journalists a great deal or a fair amount in 2008, which was down 20 points since 2003. A 2007 Gallup survey reported that 43 percent of global citizens viewed political leaders as dishonest, and 32 percent of world citizens polled argued for transparency to restore trust.

You must adapt your operations to this new reality by taking concrete steps:

• search for your company, brands, and name on search engines and blog search tools;
• respond directly to people with problems without relying on interns or PR firms;
• engage in public conversation, solve the customer's problem, and learn from it;
• tell people what you learned and thank the customer for bringing the issue to light;
• bring executives to watch complaints and assign your nicest, most knowledgeable staff to resolve every issue.

Managing backlash and building trust

Managing public criticism requires humility and open engagement rather than defensive PR strategies. When Dell finally changed its approach, negative blog buzz about the company dropped from 49 percent to 22 percent after their outreach program began.

David Weinberger formulated a corollary to Jarvis' First Law regarding this dynamic. He noted that the transparency of the internet turns everything into a gift economy where value comes from sharing openly.

You must embrace this gift economy to repair damaged relationships. The path forward requires you to:

• open up;
• hand over control;
• build a relationship of transparency and sharing.

2. New Architecture

The link changes the fundamental architecture of business and society, forcing organizations to specialize and collaborate instead of trying to provide a one-size-fits-all product. You no longer need to build every asset internally. The internet rewards focus and connection over isolation.

The link changes everything about how you build value.

In the post-link era, content creation and business structures must shift away from repeating background information or commodified tasks. Organizations should concentrate their resources on their unique value and link to external sources for everything else. You can avoid becoming the U.S. Steel of our age by shedding bloated legacy operations.

Newspapers no longer need to produce generic golf tournament reports or local movie reviews when they can link to superior specialized coverage elsewhere. You do what you do best and link to the rest.

Do what you do best and link to the rest

Tom Evslin formulated a rule for networks that changes how you price your services. Successful internet networks and platforms maximize growth and value by charging as little as possible rather than what the market will bear.

Extracting the minimum value necessary from a network allows it to expand to maximum size and utility. High profitability too early invites competitors to undercut prices and steal market share, whereas operating close to breakeven blocks competitors entirely.

Tom Evslin set AT&T Worldnet pricing at a flat $19.95 per month for unlimited internet access, removing the ticking clock on usage and hooking users on the web.

By the end of 2007, Skype reached 276 million accounts across 28 languages. On eBay, 547,000 online stores sold merchandise in 2007. You join a network to ride this immense scale.

Be a platform and think distributed

A modern enterprise must act as an open platform that enables third parties to build value, rather than trying to control every product and service internally. By opening up code, maps, or infrastructure without charging developers excessive fees, platforms foster the creation of mashups, applications, and businesses that exponentially increase the platform's utility and traffic.

A platform multiplies its power by letting others build on top of it.

Paul Rademacher combined craigslist housing listings with Google Maps to create the first map mashup, prompting Google to hire him rather than sue him.

Facebook attracted 200,000 developers who created 20,000 new applications with virtually no staff cost. Contrast this openness with Microsoft, which received a $1.4 billion fine levied by the European Union in 2008 for restricting developer access.

Instead of forcing customers to travel to a centralized destination, successful internet enterprises distribute their presence wherever the users are. Google avoids cluttering its home page with ads or heavy content, choosing instead to search boxes, ads, widgets, and videos across millions of external sites all over the internet.

At many news sites, 80 percent of a day's users enter through search or links rather than the home page. Google paid $1.65 billion to acquire YouTube in 2006 to capture this distributed video traffic.

CBS Interactive abandoned its failing portal strategy and adopted a distributed model, placing its shows on as many third-party sites and platforms as possible via embeddable video players. You must think distributed to survive.

3. New Economy

The post-scarcity internet economy replaces mass-market blockbusters with abundance, the long tail of niches, and nimble micro-competitors.

Google is teaching businesses to manage abundance rather than relying on traditional economic scarcity and mass-market blockbusters. Old industries built their profits on controlling scarce resources such as physical shelf space, broadcast minutes, or printing presses. The internet replaces scarcity with unlimited choice, moving attention toward the long tail of niches.

Starbucks launched MyStarbucksIdea.com using Salesforce.com's platform, gathering thousands of customer suggestions to fix slow lines and product requests. 7,600 customers agreed with an idea to make ice cubes out of coffee.

Small is the new big

The internet has lowered the cost of independence and the critical mass required for success, enabling a mass of nimble micro-competitors to challenge traditional retail and media giants. While large enterprises still exist, the digital economy allows individuals and tiny start-ups to operate globally without owning physical storefronts, heavy inventory, or expensive manufacturing infrastructure.

In 2007, eBay sold $59.4 million in merchandise from 547,000 online stores, surpassing the sales of traditional department store chain Macy's. Total merchandise sales on eBay reached $59.4 billion in 2007, while Wal-Mart recorded $345 billion in sales revenue. Macy's generated $26.3 billion in revenues across 853 stores in 2007, and Jarvis earned $13,855 in ad revenue on his blog Buzzmachine in 2007.

Managing abundance

Handling physical atoms involves excessive costs, inventory risks, and operational friction, whereas building digital knowledge and service empires creates true equity. Traditional companies limit themselves by identifying with physical products rather than customer needs. Digital platforms turn operational cost centers into profitable knowledge hubs by capturing user data and behavior.

Jeff Bezos built Amazon into a massive retail force while holding minimal inventory, eventually turning his computing infrastructure and labor marketplace into profitable web services for other businesses.

4. New Imperatives and Ethics

Traditional institutions hide their processes and mistakes out of fear. The internet treats the process as the product. Transparent corrections build audience faith, and allowing room for failure prevents companies from playing it safely away from game-changing innovations. A.G. Lafley improved Procter & Gamble's commercial success rate for new product launches from 15-20 percent to 50-60 percent by applying these principles.

Admitting errors and being willing to be wrong enhances credibility and fuels innovation rather than damaging an organization's reputation.

You can operate with the attitude that life is a beta. Stand up and admit your errors. Be transparent about your process. Welcome corrections from the public.

Charles Johnson demonstrated via Photoshop analysis that a Reuters photographer had doctored a photo of Beirut smoke during 2006 Israeli bombardments. Reuters immediately fired the photographer and thanked bloggers for the correction.

Cannibalize thyself

Enormous cash flow from legacy operations blinds companies to the strategic necessity of change. TV Guide saw its weekly circulation drop from over 17 million down to 15 million, then 13 million, and eventually dropped its guaranteed advertiser circulation to 3.2 million. It refused to adapt its listings to the digital age while it was still a cash cow.

Protectionism is not a viable long-term strategy when digital shifts are dismantling old monopolistic business models.

You must examine your business for legacy cash cows. Cannibalize yourself before competitors do it for you.

The costs of evil

As human interaction explodes on the internet, the long-term business costs of corporate greed begin to outweigh any short-term benefits. In a transparent network, screwing customers is no longer a viable business strategy. Corporations must adopt a moral compass and evaluate whether their policies are exploitative.

Greed incurs high business costs when networks enable people to talk about, with, and around your company.

Wal-Mart sued a severely brain-damaged former employee to recover $470,000 for her medical care after she won a settlement of $1 million and $417,000 after legal fees. The company backed down only after suffering devastating public relations damage across network news and blogs.

• Ask yourself and your employees whether your business decisions are good or evil to customers and communities

Conclusion

To succeed in the internet age, you must abandon command-and-control legacy models and adopt Google's core principles of open platforms, radical transparency, and radical trust.

The mechanics of this digital transformation interconnect across industries. When you let customers take control, you build trust. When you build trust through radical transparency, you can open your platforms. When you open your platforms, you unlock the abundance of the long tail and empower a nimble micro-economy.

To apply this mindset to your own organization, follow these practical rules:

1. Stop fighting the internet and learn to let go of control over your brand, message, and products.
2. Focus on your unique core competence and link to everything else on the network.
3. Treat your customers as active partners and give them the tools to organize, build, and share.
4. Embrace radical transparency and own your mistakes publicly when things go wrong.
5. Abandon legacy cash cows before competitors destroy them, and innovate in the open.

10 Key Ideas

1. Companies must willingly cede control to their customers because the internet empowers people to organize, speak out, and take back control.
2. There is an inverse relationship between institutional control and public trust; the more an organization controls, the less it is trusted.
3. The link changes everything about how you build value.
4. A platform multiplies its power by letting others build on top of it.
5. The post-scarcity internet economy replaces mass-market blockbusters with abundance, the long tail of niches, and nimble micro-competitors.
6. Admitting errors and being willing to be wrong enhances credibility and fuels innovation rather than damaging an organization's reputation.
7. Protectionism is not a viable long-term strategy when digital shifts are dismantling old monopolistic business models.
8. Greed incurs high business costs when networks enable people to talk about, with, and around your company.
9. To succeed in the internet age, you must abandon command-and-control legacy models and adopt Google's core principles of open platforms, radical transparency, and radical trust.
10. Abandon legacy cash cows before competitors destroy them, and innovate in the open.