Authors: Douglas Edwards
I've never been a numbers guy, but no matter how I did the math, the results looked pretty good. The board would meet within a month to approve stock grants to new employees and set the price at which my shares would be valued. I had decided to buy the options to avoid the tax penalty and now I waited to find out what I would have to pay for them.
The email headlined "Strike price" pinged into my mailbox. I opened it. The board had approved my offer at a share price of twenty. Twenty cents. It felt a little high, given the company's lack of revenue or a proven business model, but not unreasonable. Unfortunately, I was broke. Even at twenty cents a share, I couldn't afford to buy my options. My capital was tied up in a significant stake I'd taken in plush toys and flame-retardant pajamas. I would have to borrow money from my parents.
Kristen considered my decision on its merits.
"You want to borrow money?" she lovingly inquired. "To buy worthless shares of a company that doesn't have any revenue? Are you out of your mind? Can't you buy the shares later? Will you get the money back if they go out of business? You know, the car keeps stalling and we need a sewer line cleanout." Then she said, "Fine. Do what you want. Are you sure you really want to do this?"
My parents were equally skeptical, but they were my parents. They dug deep into their retirement savings to lend me the money, though I'm sure they believed it would go flush, right down the toilet.
So I bought the shares and waited and watched each month as they ticked up a few pennies at the board meetings. It was all play money since there was no way to cash out. Yet I found it hard to resist calculating my worth, even if it was imaginary. I never spoke of it at work. It was very bad form to discuss compensation within the company. We were all there for the love of technology and to radically improve the world. Really, we were. Seriously. Mostly.
One month the board met and raised the stock a dime. Suddenly I could repair the backyard fence or re-pipe the bathroom. I couldn't actually do it, because the money existed only as a line item in some accountants' spreadsheet. But in theory, at least, I was becoming increasingly comfortable.
Personal finance was off limits at the office, but we talked freely about how to spend the company's money.
"All we need now," I informed Cindy after Larry and Sergey had given our marketing plan tentative approval, "is a budget." Shari and I started drafting one. A department of half a dozen people could never implement all the programs outlined in our blueprint, so Shari planned to hire a promotion agency. She had talked with one that recommended we build campaigns around a "Google Challenge" and a "Google Scavenger Hunt." The concepts made me squirm. They seemed old school. A taste test? A scavenger hunt? Would we do clip-and-save coupons too?
"Larry and Sergey are intrigued by ideas like painting the Google logo on rooftops along the flight path to the airport," Cindy said. "Outrageous stuff. They want to project the Google logo on the moon."
Shari would have to wrestle with that—I was busy figuring out Larry's proposed affiliate program. Affiliate programs were all the rage among online retailers like Amazon. Amazon encouraged other sites to put up links pointing to a particular book or video or CD they had for sale. Users who clicked on that link would be transferred to Amazon, along with information about the site that had sent them. If the users ended up buying something, Amazon would pay a bounty to the referring website. That made sense. A referring agent should be paid a commission when a sale is made. But we weren't selling anything. Our search service was free.
"I don't get this," I told Shari. "we're paying people to use a free product? Won't people just abuse it?" We would get more users, but we'd also end up paying people who just clicked on the links they had put on their own websites. I didn't think it would work, but I looked into it anyway, expecting we would eventually bury the whole program under a rock.
The first back-of-the-envelope budget calculation Shari and I did suggested six million dollars would fund all of our marketing initiatives. We went back and carefully reviewed all the variables, including efficiencies we could realize by doing work in-house. We ended up doubling it. Twelve million dollars was dangerously close to the number that Scott Epstein, the interim VP of marketing, had mentioned just before he headed out the door. Still, it was far less than Shari had spent in prior jobs, and Cindy assured us it was a reasonable amount for establishing a global brand. So we built an elaborate spreadsheet justifying the need to spend most of the cash we had in the bank on promotional activities.
We sliced, diced, and fluffed the numbers every way we could, showing how many impressions we'd generate and how many visitors we'd convert into regular users. Our arguments were clear, compelling, and fact-based. We gave the twelve-million-dollar figure to our controller, who tossed it in with all the other finance numbers to be scrubbed by the board of directors. Cindy would present our case.
"I'll never forget," said Cindy of that fateful board meeting, "John Doerr saying to me, 'Would you rather spend ten million dollars on marketing or on machines?' And I said, 'Machines,' and he said, 'All right then.' And I was dismissed. I was so pissed at Larry and Sergey for leading me to slaughter, not saying a word during the presentation. I'm sure they knew what the sentiment of the board would be. Why we had to go through this exercise I'll never know."
When the scrubbing was done, our marketing budget had shrunk by two-thirds and most of what remained was allocated to the affiliate program, which, Larry let us know with some heat, had already taken far too long to put into place.
I wasn't entirely surprised at the cuts. It was one thing to approve abstract ideas, but committing real dollars to implementing a plan was quite another. Larry and Sergey expected us to execute everything we had proposed; they just didn't want us to spend any money doing it. As for the affiliate program, I had been trying to figure out the best way to give it life despite my desire to see it die. One useful big-company lesson I retained was to always make the boss's idea a priority, even if it's patently unreasonable.
The Netscapees (as former Netscape employees are called) in our business-development department were ironing out the wrinkles with BeFree, our affiliate-program management company. I expected it to take weeks for such a complex deal to be completed. It was close to New Year's, and nobody did serious business around the holidays. Larry did. He wanted the program launched immediately. Cindy sent me a note at four in the morning explaining this very succinctly. Every passing minute we did not have an affiliate program in place was an affront to Larry, and that got back to Cindy. When Cindy couldn't sleep, I had nightmares. And when I had nightmares, I grumbled to my wife.
"Haven't we earned some slack? I mean, things are going pretty well overall, considering most of the marketing group is so new. We've already developed a marketing plan and a budget..."
"Wait, didn't you tell me the budget was cut?" Kristen asked, just to prove she didn't always ignore me when I talked about work.
"I set up a committee to prioritize projects," I said, ignoring her.
"Oh. So they decided not to kill your committee after all?" Now she was toying with me.
"I worked with engineering on measuring traffic! I collected user testimonials! I put together UI guidelines!"
"I'm sure the engineers really appreciated that," she said in the soothing tone she used on the children. Clearly I would have to stop sharing so many of my frustrations with her.
It did feel as if we had digested huge projects during a period most companies spent eating down the leftovers from their Christmas parties. And not just systems stuff. We'd also begun updating the Google corporate pages, run focus groups with an outside research firm, redesigned our corporate stationery, and printed sales collateral. We'd even managed some guerrilla marketing at MacWorld in San Francisco, where we showed up at dawn to hand out thousands of Google-branded luggage tags before Apple's goon squad chased us away for lack of a permit.
"Luggage tags are the key to Google's growth," Sergey had dryly remarked when I pointed out that Apple-related searches on Google went up noticeably, if not significantly, in the weeks that followed.
All that effort without any inkling of what our overall company priorities or strategy might be. I began to suspect that my new employer's expectations were always going to exceed my capacity by at least thirty percent.
The affiliate program launched in early 2000, less than a month after the contract was signed with BeFree. It was a time suck from day one. Tens of thousands of affiliates signed up to be paid for sending a search or two a day our way. Most of the traffic came from a handful of large sites and a swarm of dishonest spammers. It wasn't hard to put a Google search box on a web page and then write a program to keep entering searches into it. Each week we prepared a list of cheaters we needed to block, but it was the legitimate low earners who ate up most of my time. They clamored for their two-dollar checks as if nothing else stood between them and the soup kitchen.
We started off paying three cents for each search sent our way, then cut it back to a penny. Traffic instantly plateaued. I never felt the expense and the hassle were worth the trickle of new users we were attracting, but Larry believed acquiring new users this way cost less than finding them through online advertising. Susan took control of the program a few weeks later, since she managed our other search-technology products. Secretly I celebrated having an albatross off my neck, and took some solace from the fact that even in Susan's more willing hands our affiliate network never contributed to the bottom line. A year after its launch, Susan asked me to write a letter telling our affiliates we were killing the program.
That was one of the rare occasions when I felt we made an avoidable error. As Susan conceded years later, "In the scope of things, it wasn't the right program for us to be running." The time and money could have been put to better use, though perhaps this was only obvious to me because the time and money belonged to my department. Larry saw staff productivity as infinitely expandable, and one more program to manage could hardly be considered an obstacle. If the affiliate program interfered with other responsibilities, then we would just work harder and longer. We were blessed with boundless opportunity, so our output would need to grow without limit.
When we pulled the plug, it didn't matter that Larry had originally been a proponent of the program. The financial data didn't support it, so we took it out back, put a stake through its heart, and buried it deep in the field of failed ideas.
I
T WAS HARD
to let go of the absolutes I had clung to so tightly over a long career of managing brands. Sergey tried to help me by prying tenets from my rigid belief system and beating me over the head with them. Case in point, the daily affirmation I chanted to our logo's inviolate purity.
This is our logo.
It looks like this.
If it looks like this, it's our logo.
Because our logo looks like this.
One of the convictions I'd brought with me to Google, based on the two books I had read about branding, was that you needed to present your company's graphic signature in a monomaniacally consistent manner—to pound it into the public consciousness with a thousand tiny taps, each one exactly the same as the one before.
So when Sergey reminded me that he wanted us to play with Google's signature homepage graphic, I put my foot down. Remember, this was not merely the most prominent placement of our logo; it was the only placement of our logo. We weren't advertising on TV or on billboards or in print. The logo floating in all that white space was it. And though we had millions of users, we were hardly so well known that we could assume people already had our brandmark burned into their brains.
Sergey didn't see the big deal. He had changed the logo twice during Google's infancy, adding a clip-art turkey on Thanksgiving in 1998 and putting up a Burning Man
*
cartoon when the staff took off to explore nakedness in the Nevada desert. But now Google was a real company, I reminded him. Real companies don't do that.
Even as we argued, Sergey enlisted webmaster Karen White to resurrect the turkey for Thanksgiving, create a holiday snowman in December, and festoon the logo with a hat and confetti for New Year's 2000.
"What about aliens?" he asked. "Let's put aliens on the homepage. We'll change it every day. It will be like a comic strip that people come back to read."
I tried not to be condescending as I explained again why it was bad branding. I gave him my spiel about consistency of messaging and uniform touchpoints and assured him it wasn't just my opinion; it was the consensus of marketing professionals worldwide. Manipulating one's logo was identity dilutionary.
I knew I had finally convinced him when he stopped asking me about it.
I was wrong. Sergey wasn't convinced; he just didn't like repeating himself. So he turned to Susan instead. Susan didn't argue; she started looking for an artist to execute Sergey's vision. She found illustrator Ian Marsden and put him to work. In May 2000, Ian created the first Google Doodle.
†
It featured—surprise, surprise—aliens making off with our logo.