http://www.businessweek.com/bwdaily/dnflash/mar2001/nf20010313_831.htm
NEWSMAKER Q&A
Google's Larry Page: Good Ideas Still Get Funded
The popular search engine's co-founder and CEO says
plenty of money is available -- it's just a lot more selective
Some dot-com Don Quixotes may be
tilting at windmills. Not Google. The
popular search engine accommodates 70
million queries a day and expects to
become profitable in the third quarter of
2001. And Larry Page, Google's
co-founder and CEO, believes hot
Internet ideas and products can still get
funding, despite the dot-com meltdown.
Page recently sat down with
BusinessWeek Online technology
reporter Olga Kharif. Along with lessons
from his own success story, Page also had some advice for
entrepreneurs who are just starting out. Here are edited
excerpts of their conversation:
Q: Were you ever afraid that Google wouldn't take off?
A: Sure. All the time.
Q: What were your first steps in insuring the success of
Google?
A: Well, actually, I think part of the reason we're successful so
far is that originally we didn't really want to start a business.
We were doing research at Stanford University. Google sort of
came out of that. And we didn't even intend to build a search
engine originally. We were just interested in the Web and
interested in data mining. And then we ended up with search
technology that we realized was really good. And we built the
search engine. Then we told our friends about it and our
professors. Pretty soon, about 10,000 people a day were using it.
Q: At what point did you decide to make a business out of
it?
A: We realized by talking to all the CEOs of search companies
-- which were really turning into portals -- that commercially,
no one was going to develop search engines. They said, "Oh, we
don't really care about our search engine." And we realized
there was a huge business opportunity and that nobody else was
going to work on it.
And the other thing was, all these people were using Google,
and we didn't have enough computers or enough resources to
really provide a great service to people. So we needed capital to
do that. We wanted to get everyone in the world to use it.
We realized we needed a lot of disk space, a lot of hard drives,
and so we went out and we -- basically I -- found this really
good deal on hard drives. And we bought, like, 120 hard drives.
And we had to use all of our credit cards and our friends' credit
cards and our parents' credit cards.
Q: And how did you manage to pay off the credit-card
debt?
A: Pretty soon afterwards, we got some private investments
through Stanford. At the time, actually, Google was growing
very, very fast. We've grown in traffic about 20% per month
throughout our whole history. So it was obvious people really
liked it. The site experienced a kind of viral growth. People
would tell their friends, and their friends would tell their
friends.
Q: Did you put a lot of effort into creating your business
plan?
A: Well, it took a long time -- I mean, the whole process of
raising money. The first time we did it with our angel investors,
and the second time we did it with our venture capitalists. It
takes months. You have to talk to a lot of people, you have to
find the right people who are interested. I mean, everyone we
talked to actually wanted to invest. That was a nice thing. But
that's because it's a great product and everyone was using it.
People could understand why it was better. That's not true for
every startup. So I think it had a lot to do with our product and
maybe lots to do with the climate. We can still raise money very
easily, if we need it.
I think there's still a lot of capital available. There are a lot of
people who have money. They're just a little bit more selective
about it. But that's a good thing. That means that any ideas,
products, that are more likely to be successful will get funded.
The way I judge these things is, if you have a product that's
really gaining a lot of usage, then it's probably a good idea, and
it's probably going to be significant. And that tends to be a
metric that investors use as well. Because if it's growing
naturally, it'll often continue to grow for a long time.
Q: What are your goals for the next couple of years?
A: Basically, our goal is to organize the world's information and
to make it universally accessible and useful. That's our mission.
When we started, we had about 30 million Web pages, which
was quite large for the time -- that was two years ago. Now, we
have well over a billion Web pages. So that gives you some idea
of how we've grown in content. So we try to make more and
more stuff available to people, we try to, when you come to
Google, fulfill that need that you have as quickly as possible.
We try to make it better and better every day. We have about 40
PhDs in computer science who make Google better, and a
whole bunch of other technical people. So we're really investing
to improve the search engine, and that has really paid off.
We're serving over 70 million searches every day. About half of
that is on Google.com and half is through about 100 customers
spread in 30 different countries. That's customers like Yahoo!
and Netscape and so on.
Q: Have you been affected by the dot-com slowdown of the
past year?
A: Sure. Everyone is affected by it -- I mean the changing
conditions. I think in a lot of ways it has been good for us,
because it makes us stand out more from our competitors and
from other companies. So actually...we say that we're going to
be profitable in Q3 of this year. And that's quite conservative.
We were definitely trying to be profitable before it was
fashionable.
And we're able to rent office space now and things like that.
Before, it was actually probably three times as expensive as it is
now. We can also hire people from all these companies,
whereas before it was harder to get people.
Q: What would be your advice to entrepreneurs who think
they have a great idea right now but are struggling getting
funded?
A: Especially on the Web, you have this tremendous
opportunity to develop the product first. Most of the great Web
companies we know were developed by a few people, and
everybody started using those things, right? Yahoo! is a great
example, Google is a great example. My brother is one of the
founders of eGroups, which is a mailing-list company which
actually ran for over a year as just one computer and one
part-time person. And I actually bought them their first
computer. It sat under somebody's desk at another Internet
company, and it just got more and more traffic, more and more
people using it. And then eventually they were, like, "Oh man,
we should quit our day jobs and work on this!"
Q: Did your brother go into this business following your
example?
A: Actually, I encouraged him to start eGroups, and he
encouraged me to start Google. So we both owe each other a lot.
But anyway, there was a company, there was a product that a lot
of people were using. And on the Web, that's really easy to do. I
mean, this computer that I bought for them processed over 1
billion e-mail messages. They had a party for the computer
recently.
But you don't need a huge company, just a computer and a
part-time person. So you don't need to have a 100-person
company to develop that idea. You can do it in your spare time,
you can really work on ideas and see if they take off -- rather
than trying to raise tons of money, millions of dollars for an
idea that may or may not work. And once you have the product
and people are using it, it's very easy to raise investment.
Edited by Douglas Harbrecht
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