Home Computer Science Technological Entrepreneurship: Technology-Driven vs Market-Driven Innovation
Case Aims: To illustrate the operation of an extremely successful ambidextrous organisation
Google was founded by Larry Page and Sergei Brin, who met in 1995 while they were PhD students in the computer engineering department at Stanford University. Their focus was to organise the world's information in such a way as to make it universally accessible. The search engine they developed provided the basis of their business idea. In itself, however, the search engine did not generate revenue. This only occurred when they linked the search system to selling online advertising. This business model remains the core of the company. generating a major proportion of total revenue (Finkle 2012).
Google's mission is not based on money alone; rather it is to improve the world. The heart and soul of Google is based on entrepreneurship and innovation. The company has a flat, open organisational structure that supports a highly democratic culture in which employees are encouraged to question anyone. Strategy tends to come from the bottom up. The founders' commitment to innovation has resulted in the emergence of an effective ambidextrous operation (Smith 2010). While incremental innovation
continues to be utilised to further enhance their Ad Works operation, the company uses generated revenue to support radical innovation and knowledge expansion through acquisition. An example of this latter approach is Android which went on to become the Android Operating System for Google's smartphone operating system launched in 2008.
The company has a long-term orientation towards the development and launch of new radical innovations. This attitude is reflected in the driverless car concept which Google started to develop some years ago, long before the car industry perceived the potential benefits of this technology, but which the company recognises requires several years of ongoing development before a viable commercially feasible product proposition can be launched.
A core constituent of the company's radical innovation projects is Google X, which is tasked with making actual objects that interact with the physical world. Three other important projects in addition to the driverless car are Google Glass, high-altitude Wi-Fi balloons and glucose-monitoring contact lenses. X projects usually share three criteria: (1) to address a problem that affects millions of people; (2) to utilise a radical solution; and (3) to tap into technologies that are now or very soon will be available (Gertner 2014).
The increasingly diverse nature of Google's operations led in 2015 to the announcement of the company's restructuring under the new generic umbrella name of Alphabet (Vella 2015). It is believed the new name Alphabet is a play on the diversity of activities of the companies within the group as well as a reference to alpha, a measurement of financial return adjusted for risk. The companies within the group are:
Google: remains responsible for search, Adwords, YouTube and Android
Calico: a life-sciences company aiming to extend the human life span
Nest: the thermostat company that Google bought for $3.2 billion in 2014 and is the centrepiece in the firm's plan to control the smart homes of the future
Google Ventures: a venture arm that invests in new ventures
Fiber, the high-speed broadband Internet service now available in three cities
Google Capital: an investment arm that focuses on late-stage growth companies
Google X: the research lab
Sidewalk Labs: focuses on using technology to improve city life
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