Bull Session

Alphabet

August 20, 2015          

Episode Summary

In this episode of The Digital Life, we explore Google’s corporate transformation to holding company Alphabet, what that means for unleashing innovation in the company, and how that effects the firm’s chief technology rivals, Amazon and Apple. So far, Wall Street has loved the move and the company has increased its worth by $20B.

Alphabet is well-positioned to be the dominant emerging tech company of the 21st century, with fingers in the IoT, wearables, self-driving cars, robotics, and genomics. But what does that dominance mean for our data, when innovation is reliant on advertising revenue for financial fuel?

Resources
G is for Google
Google confirms Life Sciences as the first new company under the umbrella of Alphabet

Jon:
Welcome to episode 117 of the Digital Life, a show about our adventures on the world of design and technology. I’m your host, Jon Follett. With me is founder and Co-host, Dirk Knemeyer.

Dirk:
Jon, what’s up this week?

Jon:
I thought we could spend a little time this week chatting about some of the biggest tech news to come along in a while. Of course I’m referring to Google’s transformation into Alphabet, which may sound like a little something from what our kids watch on television everyday. Really and truly they’re going to become multiple companies under a holding company umbrella called Alphabet. It’s the dawn of a new day, perhaps, for Google. I know that as tech watchers we’ve had lots of things to say about Google, and Apple, and Microsoft, and Amazon over the past couple years on the show. This is something we’ve been watching very closely. I know you have some thoughts on that. I thought we would start with what your thoughts were on the implications of this transformation.

Dirk:
I think it’s a big deal, more from an optical perspective than anything else. We’ve been talking on the show about how Apple is mired in the morass of slow, non-innovative thinking. Is one of a few companies that are, or really have been for some time, whipping out ahead, looking at many different manifestations of technology across a broad base, far outside the narrow band of computer software and hardware. Taking innovation and taking their charter for what they’re trying to do in the world to the next level.

What Alphabet does, from an optical perspective, is it really shows that to the world. Its no longer, there’s just all of these things happen behind the scenes inside of this search company and it doesn’t make sense. Now it’s really putting it out there and saying, here is the structure, here are all of these different things functioning in various ways, independently within it. It’s a broad mandate.

We’ve talked on the show before about self driving cars and other interesting technology. Now people are being made aware of Google’s investments, for example, in technologies to increase the duration of life. They’re really going into emerging technologies, the things that we work on at Invo and we talk a lot about on this show. From AI, to robotics, to synthetic biology, Google’s all in. They are refashioning their leadership focus at the top, and re-prioritizing the structure of their entities to really try and make the most of these things. I think it’s pretty cool, because it’s really making manifest what’s been happening in more seemingly ad hoc ways in a much more formal and understandable structure.

Jon:
Yeah, I think as you were articulating that it’s dawning on me that Google really is the mainline innovation in emerging technology company. Maybe in a way that the GE of old was just dominating in some emerging technology spaces. If you recall just a couple years ago, they scooped up — meaning Google scooped up — a number of Boston-area cutting edge robotics companies. There were all sorts of videos online of these robots that resembled animals, that resembled people. Google was placing this best on the future of robotics.

As you pointed out, there wasn’t a real connection, or one that we could see, to their core business of advertising. Now they have all of these wonderful, innovative, individual companies, plus their Google ventures and other financial instruments, ways of funding these. You can begin to see just how they have their fingers in so many of these pies that are going to be important for the future. Nest, obviously another Google company. You mentioned the self driving cars, another Google investment. I know that they’re investing in synthetic biology and talking with George Church, for instance, about having genetically altered mosquitoes that may one day be able to help fight dengue fever in remote parts of the world. It’s hard to grasp all of the elements that are going into this Alphabet company. I guess, from my perspective, having such a love of emerging technologies, it really seems like it would be a wonderful place to work. Although I doubt that any one, aside from the company founders, would really get to touch on everything.

Dirk:
Yeah, I think that’s a part of the point. Google has a long history of dabbling in ways that are largely unsuccessful. If we go back to the early days when they were just a search company and then started to roll out other different types of products, they notoriously failed at social networking again and again and again. Trying different types of messaging, platforms, project management things, among many, many others; it’s been very hit or miss. The company has come from a hacker engineer culture, and has taken that same tool and applied to to all of these different contexts, while trying to run a search business that paid the bills to a varying array of successes and failures, primarily failures.

Now Google is taking these things that are much bigger than just, Oh we do search software now we’re going to do social networking software going into totally different industries, very different aspects of technology – although all coming back to software in ways tiny and large — and trying to run those as companies, and their own things. As opposed to hobbies or just the mash up, lets see what we can do here, deal. I’m really excited to see what they’re able to do, or not, with it all. I’m very bullish on their ability. Again, treating these as separate companies, things that are being run by strong leaders, and properly invested, properly focused in each of their own, I’m pretty optimistic. I don’t see any other company on the horizon who’s in order of magnitude of what Google is trying to do across this very broad base of emerging, cutting edge things. At some level, it’s scary.

Jon:
Totally scary.

Dirk:
The flip side of the coin is, Google right now is the only corporation I can see that is on a track to potentially be the distopia overlord of the future. I don’t suspect that that would happen, but it’s within the realm of possibility given the breadth of the play that they’re making and how it’s getting into life extension in particular, it’s getting into literally the holy grail of technology in the world. Interesting, exciting, and really fulfilling on a promise of innovation that they’ve been showing and making. It’s fun to see it emerge in this calcified way.

Jon:
Yeah, I think if we take a quick look at some of Google’s chief technology rivals, we can think about Amazon and Apple being rivals to Google in that sense. When you look at what Amazon’s doing ,there is some overlap there with internet of things offerings. For instance, Amazon is moving in a couple different directions with their internet of things offerings, one being the voice activated echo, which they’ve been market testing. Certainly no where near moon shot the way you would think of robotics or some of the synthetic biology projects that Google’s venturing into. Amazon, a much more … I don’t know if down to earth is the right way to contrast with a moonshot company.

Amazon certainly seems all encompassing when it comes in the retail side. Generally speaking, seems a lot more pragmatic, maybe boots on the ground, and less looking towards the future and visionary the way I see Google. At the same time, I use most of Amazons services; I use their streaming service, I order all sots of things online from them. They are collecting money from me anyway. Maybe it’s just that Google has the visionary leaders that make it possible for them to do what they’re doing. The question then I think worth raising, why not Apple, why Apple’s sitting on this pile of cash. They certainly have the money to do it, but they don’t seem to be venturing as far a field from the consumer electronics world that they’ve dominated for so long they’re don’t seem as visionary, and maybe that as leadership thing. What do you think, Dirk?

Dirk:
Totally think it’s a leadership thing. Wozniak has been retired for what, 30 years? Job’s has been dead for four or five. I’m sure Tim Cook is a very competent, professional CEO, but he sure as heck isn’t a visionary, he sure as heck isn’t a leader. As much as the design community like to froth about the partnership between Steve Jobs and Jony Ive. Wait, Jony Ive’s not doing much interesting since then. The stuff that Apple is doing that he’s attached to and yammering about in positive ways, those aren’t exciting products, those aren’t interesting and groundbreaking things, they’re really mundane.

I think it’s a lack of vision, a lack of leadership. Companies are like people, they get old, they peak. Apple’s had a couple of really nice runs in it’s history. It remains, I think, the biggest company on earth. It’s usually Apple and Xeon are up there towards the top. Certainly from a capital perceptive, a big corporate perspective there’s a lot of success there. However, the vision isn’t there. If you take where Apple is today and go out 20 years and compare it to the arch that we’re seeing from Google in more straightforward, and perhaps less inspiring ways like Amazon, I think you’ll be hard pressed to make the case that Apple is the one in 20 years that’s going to be the really premiere company. They’ve already, from my perspective, lost the shine from an innovation perspective. I think it will just take time for them to lose it from a market cap perspective.

Jon:
Looking at the post Jobs era for Apple, I can only sum it up as seeing lots of line extensions on their current brands, and absolutely zero innovation. Everything I feel from the Jobs era got maybe more profitable, slight tweaks here and there, whether it’s the consumer electronics, or service that back them, or the software within them. It’s incremental change and not really anything that in the long term is going to have the same splash as the first iPod or the first iPhone or the iPad did.

In fact, I was just looking at an article today,at Khoi Vinh’s site, suggesting that the iPad needs an innovation around or some rekindling because it’s getting to be a tired category as the standard bearer for tablet computing. There’s just not as much, if any, innovation in the space since tablet computing started with the debut of the iPad. It’s, I think, maybe a little disappointing for people, like myself, who have been fans — wouldn’t say a fan boy — of Apple products for so long, just took for granted that they would lead the charge on the innovation and design side. For some reason, capturing money, not imagination, seems to be their modus operandi currently. Maybe a little disappointed in Apple, at least here.

Dirk:
Yeah. Look at the history of corporations, they all die, they all go away. None of them make it. If you look at the biggest companies, like an Andrew Carnegie, they don’t exist anymore. They die, despite being, at certain points, the biggest and most successful companies in the world. That’s because they’re born of a certain time and place, with a certain vision, carving out a certain space in the world. As time passes, the impact of that space, the degree to which people desire that space waxes and wanes. The more time that passes, the more it’s on the wane side.

Apple is a company that I don’t remember their initial mission statement, but it boiled down to putting computers in everyones living room. Taking these giant machines for processing and make them a personal and part of peoples everyday lives, that’s a mission that’s been addressed a long time ago. Whereas Google, their mission of organizing the worlds information … information applies to DNA, information applies to all kinds of different things. Even though Google’s first manifestation was in the context of a search engine, from the very beginning their vision for what they were trying to achieve in the world was much bigger.

I think there are still exciting things for Apple to do. It would be great if Apple could solve the personal computing ecosystem. Going back to Khoi’s comment, there’s a gap right now where we’ve got the watch, we’ve got the iPhone, we’ve got the iPad, we’ve got the laptop or desktop computer, we’ve got the devices in our cars and in other places, wearables that are all part of this. It’s really clumsy. There’s too many devices, they don’t work that well together. There’s still a lot to be done in that space, and I do think Apple’s the right company to do it. The question is, do they have the leadership vision present to do that? I think the Jony Ive fan boys would say yes. I’m not so sure though. I’d like to see them do it because I own Apple devices, I’ve invested a lot of money in the iTunes store. I’d like this ecosystem to continue. There’s a big opportunity for it to really up level. I hope Apple does it.

I increasingly think it’s more likely that it’s going to be some kind of disruptor. I don’t necessarily think Google’s the one to do it, because Google’s excellence is not in design ecosystems, Google’s excellence is in engineering. On the design side, more simple, straightforward, not from a design perspective, but from a overall business model prospective, in ways that are more open but don’t necessarily result in a great user experience. It may be another company entirely. Going back to Amazon, it might be Amazon, although I don’t think it will be them either. I don’t know who it will be. There’s a big opportunity here, and it is one Apple can take advantage of. The question is will they? Your guess is as good as mine.

Jon:
I’m holding out that Apple might be able to do some of that too. Like yourself, I’m not sure that they’re really prepared to do that in light of the way they’ve been going.

Listeners, remember that while you’re listening to the show you can follow along with the things that we’re mentioning here in real time. Just head over to thedigitalife.com, that’s just one “L” in the digital life, and go to the page for this episode. We’ve included links to pretty much everything mentioned by everybody. It’s a rich information resource to take advantage of while you’re listening, or afterward if you’re trying to remember something that you liked. If you want to follow us outside of the show, you can follow me on Twitter @jonfollett. Of course, the whole show is brought to you by Involution Studios, which you can check out at goinvo.com. Dirk?

Dirk:
You can follow me on Twitter @dknemeyer, or email me dirk@goinvo.com.

Jon:
That’s it for episode 117 of the Digital Life. For Dirk Knemyer, I’m Jon Follett. We’ll see you next time.

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