Disruption, Market transitions

Google Plus exemplifies why self-disruption doesn't work

GooglePlus-Logo-OfficialGoogle is slowly but clearly shuttering Google Plus; its latest failed social network. In many respects this is not a surprise. As I wrote upon its launch in 2011, Google Plus demonstrated precisely why Google didn’t get social as it, by default, asked people to think about restricting their social activity rather than by encouraging it as a default. It nudged people in precisely the wrong direction in its attempt to differentiate itself from Facebook. Thus, even though it had many ‘pros’ in the network effects ledger — in particular, millions with Gmail accounts — this ‘con’ combined with Facebook’s already significant network put it well behind. It didn’t seem to stand a chance.

So why did it happen in the first place? It is not like Google weren’t already dominant in search and online advertising and remain so today. It is hard to know but in reading things like this Mashable account I have a theory. I’ll admit that this theory will reflect my current theoretical biases but that doesn’t make it less of a theory; just that the evidence, should it ever emerge, may not support it.

Here it is: Google Plus was launched and organized according to Clay Christensen‘s self-disruption playbook. Christensen argues that disruption comes from demand-side failures whereby firms listen and provide their customers with what they want but, in the process, miss a new improving innovation that eventually serves those customers better. The cause of this is basic good management and so the cure to this is to remove management, and in particular, the baggage of the existing successful organisation from the equation. This, Christensen argues, should be done by setting up an independent and autonomous unit with the firm whose only touch point is a CEO who will ensure that it can continue to run autonomously. The charge of this organization is to adopt new ways of doing things without fear that they will be crushed out of concern for existing customers. In other words, the cure to potential disruption by others is to disrupt yourself first.

Google Plus was done differently to other innovations in Google. It was set up as an autonomous unit in a separate building with thousands of engineers moved to it. The CEO, Larry Page, moved his office into that new building to signal its importance and to ensure that it could operate without constraint. And that is precisely what it did. It innovated quickly and, in the process, had the rest of the organization perplexed, concerned and wondering what it was all for. That last part is not a bug in the self-disruption process; it is meant to be a feature.

But, it is important to ask, why was the self-disruption button pushed? The reason was Facebook. Facebook looked like it could easily disrupt Google’s business. To be sure, it has entered online advertising as a competitor to Google’s DoubleClick but that is just plain, old entry. Instead, I believe that Google was worried that Facebook would end up doing search better than Google.

Back in 2010, that actually looked like a real possibility. Facebook were gathering information that would understand the individual who was on their platform far more deeply than others. It did not take much to see how the use of that information could be used to improve search results. Indeed, Bing had signed on with Facebook to help that data improve its search results. Facebook were researching into graph search that would allow semantic methods. It was entirely possible that this could prove significant, not just to offering personalised search experiences but also to improve search algorithms themselves.

As of today, it is not clear that this disruptive threat has played out. Facebook looks further away from search than ever and people did not react well to personalised search experiences. But that is the nature of these things.

Suffice it to say, it was reasonable for Google to worry about this given the uncertainty.

It chose to deal with this using self-disruption. By why? Because it had previously failed to ‘get social’ and thought that the cause was its existing organisation. As it turned out, the cause was that getting social was hard and couldn’t just be created at a whim. It is not at all clear that it could be done under the banner of an existing organisation that wasn’t created social from the beginning. In other words, self-disruption by intent seems like something that was doomed from the start.

Moreover, it was also doomed from the end. Suppose Google Plus had been successful. Then what? In order to deal with the Facebook threat, it would have to effectively take over the rest of the organisation. In that situation, the grumblings that were in place would have morphed into outright conflict. Put simply, if you didn’t think you could do this within the organisation in the first place, what makes you think you can, after the fact, take it into the organisation afterwards. If you had to do that, wouldn’t it have been easier to just buy a successful social network, for instance, Twitter, and deal with the integration challenge then and there?

That defines the alternative to self-disruption. Google could have waited to see how social and search played out and then acquired options to get itself there. To be sure, if Facebook had happened upon a magical search-social combination, this might not have worked but then again, it is not like Facebook had what Google had in search capabilities. The point is that Google already had options out there doing the social work and didn’t need to add another.

In summary, what I am suggesting is that self-disruption was, both in theory and practice, too costly an option for Google to take in the face of uncertainty regarding whether social would be critical to search. Self-disruption cost billions, took up key engineering resources, and caused customer damage in unrelated areas (notably, YouTube). All this without actually resolving a key challenge of how to actually integrate social with search in a new way that surely would have been more sensibly undertaken by integration rather than independence. Moreover, these costs are higher in an opportunity cost sense as a reasonable alternative was for Google to buy its own social network rather than create one; as a point of contrast consider Facebook’s acquisition of WhatsApp as a hedge for facing disruption from messaging services.

I would go further and suggest that self-disruption has never actually worked and the Christensen playbook on this should be thrown out. But that is a post for another day.

6 thoughts on “Google Plus exemplifies why self-disruption doesn't work

  1. Interesting…I have always attributed its failure to the invite-only rollout, which limited early network effects. Such had been used for Gmail, but that had no network effects I can see.

    At the time I was thrilled about circles and was ready to bail on FB, but too few people were on G+. Maybe I’m an outlier

    1. Gmail was more or less a better/different webmail provider – so I don’t think network effect would apply so much there, the network was “email”, so it didn’t really change much besides gmail became the new free address not hotmail.

  2. How about the more fundamental idea that Google Plus was just never a very good product either in conception or in execution? Facebook systematically leveraged people’s desire to manage their ACTUAL social and status networks (that is why during its roll-out period it was open only to limited groups … and ones that were limited by a “status” factor at that … e.g. Harvard/Stanford alumni). Once those networks were under control … there wasn’t really much demand for a “different” way to do that … so why would someone invest the effort of replicating their network on Google Plus.

    Also, the conceptual structure of Google Plus was way too difficult to understand … not unlike the problem they had with Google Wave.

    Secondly, how exactly can Google Plus be seen as an effort at “self-disruption”? In what possible way does it challenge Google’s the existing business model for search?

    And finally, if it was seen as a way to counter the potential threat to Google’s search business from Facebook, then – well, as they say, the proof is in the pudding. The threat is not there anymore, so by that metric “Mission Accomplished”. (Not that I’m saying the Google Plus is the reason, but the disappearance of the threat means that Google Plus’s job is done and there is not longer any need to keep paying the insurance premium.)

    1. I would just like to correct the reason why Google went into social: it was not because they where afraid that Facebook might build a better search (this is not their business) but because Google’s search quality is impacted by the fact that it misses an important area of content production, I.e Facebook.
      I guess this is why they will acquire Twitter…

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