Entrepreneurial Stories

How Google Got to Where It Is Today

Written by Scott Scheper for Gaebler Ventures

Although a big-time search engine today, Google was once a small business created by two students. How did Google's business plan succeed, and how did the founders make their company a success?

Google didn't begin as a sophisticated idea of experienced computer specialists, but as a brainchild of a pair of college students.

Here is an overview of the process they encountered when forming the very successful business as it stands today.

Finding the Right Partner

In 1995, two computer science grad students, Larry Page, then 24, and Sergey Brin, 23, met on campus at Stanford University.

It was hardly an instant friendship: the two found each other strongly opinionated and obnoxious. Despite this, their dialogue with one another continued, and they ended up collaborating on a project the very next year.

Identifying Consumer Need

The challenge of the project was to answer a very important need: how does one obtain specific, relevant information from a massive collection of data?

This collection, of course, was the Internet, and their answer was something called Web-page ranking. Brin and Page realized each Web page is connected to each other by links, and the act of someone linking to a page indicated page relevance.

Together, they created a prototype system that crawled from page to page, following links and gathering information to create a "family tree." It then proceeded to calculate ordering from this tree, ranking a particular Web page highly if many other highly ranked Web pages linked to it.

Encountering and Overcoming Obstacles

With the urging of Yahoo! founder David Filo, Page and Brin decided to go start their own search engine company after unsuccessfully finding someone to license and buy their invention. After they wrote a paper and effectively tested the system on live Web data, they finally registered the domain www.google.com on Sept.15, 1997.

Their next problem involved funding. As graduate students who had maxed out their credit cards to purchase necessary equipment to run their system, Page and Brin were in need of some help.

They wanted an investor who could see the potential of their new technology, so they turned to Andy Bechtolsheim, a friend of a faculty member and co-founder of Sun Microsystems. After one meeting, Bechtolsheim wrote them a check for $100,000, which was quickly followed by a desperate struggle for additional funds from friends and family members.

Eventually, their initial funding came to nearly $1,000,000, and Google, Inc. officially opened in Menlo Park, Calif. They had a garage for an office and a total of three employees, including newcomer Craig Silverstein.

With a Good Idea and Market Demand, Things Can Turn Around Quickly

As more and more people caught wind of this powerful new search engine, it was answering 10,000 queries each day while still in beta-mode. In December, PC Magazine awarded Google as one of its Top 100 Web sites and Search Engines for 1998.

By February 1999, Google was handling 50,000 queries a day, the staff had grown to eight people, and the company moved their office to University Avenue in Palo Alto, Calif. On June 7 that same year, Google received $25 million in funding from Sequoia Capital and Kleiner Perkins Caufield & Byers.

Providing a Good Environment for Employees

Both Page and Brin wanted to maintain a relaxed culture, an air of college life, and a place where people could quickly and freely exchange ideas. They created what is known as the "Innovation Time Off," where Google engineers are allowed to spend 20 percent of their working time on projects that interested them.

The founders also insisted on providing amenities that kept their employees happy. Thus, a world-class kitchen, children's playroom, massage rooms, and exercise room were a few of the implemented additions. As a result, Fortune Magazine rated Google as the No. 1 Best Place to Work.

Google's continuing innovation and strong employee loyalty prove that a happy workforce is a productive workforce.

Staying True to Beliefs

To this day, Google remains a founder-driven company. Both Brin and Page have veto power over important decisions, and have even given assurance they will not have fewer employee benefits simply as a result of shareholder whims.

Google is an example of a company that stuck with their vision: few companies can claim to be both a success and an inspiration.

Scott Scheper is a venture finance enthusiast and serial entrepreneur hailing from Orange County, CA. Scott recently graduated from Chapman University where he was a Cheverton Fellow and graduated with honors in Finance, Management and Marketing.

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