Thursday, March 25, 2010

Sergey Brin's Is The Right Stand


Sergey's family had to flee Russia when Sergey was less than 10 years old. They fled political persecution. Memories like that never go away.

The Google leadership might present it like a group decision, but it has been so obvious to me Sergey has taken the lead on this one.

I grew up in a country that only recently became a republic. The country was a monarchy with a rubber stamp parliament - no political parties allowed - for most of my time. Democracy to me is as concrete as a brick wall. There is free speech, and there is no free speech, and the difference is stark. There are very real consequences.

My first reaction to the Google blog post of threatening to move out of China was unequivocal. No, this is not Google saying sour grapes to not being able to dominate search in China like it does elsewhere. This was a principled stand. And I admired it. I put it down in writing, I think as a comment on Facebook. I have always been fascinated by Google. I had it displayed on my personal homepage not long after the search engine showed up late in the 1990s before they had done any serious fundraising. But I never admired Google more until now. This Google-China standoff speaks to me at many levels.

What Google is doing is the right thing to do, and it is also going to prove to be a great business decision down the line.

To many Chinese the Chinese Communist Party is what the NAACP had been for the blacks. The CCP is going to bring back their ancient glory. Less than 1,000 years ago China was the leading country on earth. America did not even exist as a country.

China's economic growth these past few decades has been amazing. I have said it before and I will say it again, China needs to teach the rest of the Global South how to grow like China.

I want John Liu to at some point become Mayor of New York City. I do have the Asian pride thing going on. But it is that same pride that makes me firmly conclude China can not remain a one party dictatorship forever.

Free speech is the most fundamental of human rights on which all the other human rights rest.

And John Liu was born in Taiwan. And I am a Buddhist like the Tibetans.

A dictatorship is more likely to go to war, or more likely to engage in saber rattling. Iran's intransigence would go away if the democracy movement in that country were to succeed. China's border problems with India are in a big part to do with the fact that China is not a democracy. The idea of two nuclear powers going to war over pieces of rocks in the barren Himalayas is not exactly 21st century.

The future for China is one where both Taiwan and Tibet stay part of China, but that China is federal and democratic. Tibet and Taiwan are states inside a federal China. There is multi-party democracy. Human rights are respected.

But it does not have to be a democracy like America. It can opt to be a multi-party democracy of state-funded parties. The nature of democracy can be even more refined than what America has, but free speech is more fundamental. Human rights are elemental.

And a country that is not democratic, that does not accept human rights as a basic value can grow fast only when it is playing catch up, but it will stall once it is done catching up, and it has to depend on human creativity to create new industries, and come up with new inventions.

Manmohan Singh in India has proven a large, poor democracy can also achieve China-like growth rates. So it is not like democracy gets in the way.

I greatly admire Sergey's stand. Free speech is so basic. And until this stand it looked like the world was in a mood to stay in permanent peace with the idea of a one party dictatorship in China. The Chinese inside China could not do it. The foreign powers would not do it. Who would take the stand? Who will tie the bell around the cat's neck?

This stand by Google might be the beginning of the end for the one party dictatorship in China. And if it is, Sergey will be remembered as much for this as for his algorithms more than a decade ago. This is not an anti-China stand. This is an anti-persecution stand.

Sergey had to flee when he was young. This is him going back into that same arena. He is going to fight back with all he's got. And he has a lot.

Technology does not exist in a vacuum. Innovation does not happen in a vacuum. People are the purpose for technological innovation. Political and social issues matter. You want to organize the world's information because that will better people's lives. That is the only reason. People matter. People are at the core. People everywhere.

Sergey's stand is a pro-China stand.

Every tussle between democracy and dictatorship in history has been bloody. Fascism's defeat was bloody. Communism's defeat in Europe was bloody over decades, and across the world. Islamists are bloody in their ways. But one day all Arab countries will become democratic. That leaves China as the last bastion. Maybe we can make that confrontation not bloody. And Google is showing the way.

I am a Google person like some people are Apple people. I love Google. I have a feeling my first smartphone is going to be the Nexus One. (The iPhone, Nexus One, Or Droid?)



Jessica Vascellaro, The Wall Street Journal: Brin Drove Google To Pull Back In China Sergey Brin pushed the Internet giant to take the risky step of abandoning its China-based search engine as that country's efforts to censor the Web and suppress dissidents smacked of the "totalitarianism" of his youth in the Soviet Union. .... "One out of five meetings that I attended, there was some component specifically applied to China in a different way than other countries." ...... Mr. Brin and other executives prevailed over Chief Executive Eric Schmidt and others who felt Google ought to stay the course in China ...... Mitch Kapor, a Silicon Valley venture capitalist, said Google's moral stand made sense long term, because China will eventually get more open...... "One of the reasons I am glad we are making this move in China is that the China situation was really emboldening other countries to try and implement their own firewalls," Mr. Brin said...... he was moved by growing evidence in China of repressive behavior reminiscent of what he remembered from the Soviet Union. Mr. Brin said memories of that time—having his home visited by Russian police, witnessing anti-Semitic discrimination against his father—bolstered his view that it was time to abandon Google's policy.......... . His father, he said, wanted to be an astrophysicist, but because of discrimination became a mathematician.
John Paczkowski, All Things Digital: Beijing: “Google is Not God” Google’s principled stand in China has very quickly turned into an ugly clash with the country’s government...... "Thinking about the US’ big efforts in recent years to engage in Internet war, perhaps this could be an exploratory pre-dawn battle."..... directing Chinese searches to an uncensored search engine based in Hong Kong, essentially using Beijing’s “one country, two systems” policy against it. ..... indexing Twitter posts on its Chinese search site in open defiance of the country’s ban on the microblogging site.

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Fat Can Work, But Lean More Often Does


Ben Horowitz: The Case For The Fat StartUp
There are only two priorities for a start-up: Winning the market and not running out of cash. Running lean is not an end..... Sometimes running fat is the right thing to do.....Running fat meant that I laid off zero software engineers so that we could keep on investing in our technology, find our product/market fit, and build a lasting technological advantage..... the only thing worse for an entrepreneur than start-up hell (bankruptcy) is start-up purgatory..... Start-up purgatory occurs when you don’t go bankrupt, but you fail to build the No. 1 product in the space.
Fred Wilson: Being Fat Is Not Healthy
Ben and his partner Marc Andreessen. They have started and built multiple successful businesses and all I do is write checks...... I have never, not once, been successful with an investment in a company that raised a boatload of money before it found traction and product market fit with its primary product.....The very best investments that I have been involved in established product market fit before raising a lot of money. That's how Geocities did it. That's how Twitter did it. That's how Zynga did it..... they had significant user or customer adoption before ramping up hiring and spend..... it is very hard to be nimble and quick when you have hundreds (or even dozens) of engineers and other employees....Ben explains that Loudcloud raised $350mm in four rounds of financing (including an IPO) in the first 15 months of its life. Marc Andreessen and Ben Horowitz can do that. Most of you can not.
Albert Wegner: The Sui Generis Startup
There are extremely few people in the world that can raise money for super high burn businesses on the strength of their vision and reputation.
Ben Horowitz: The Revenge Of The Fat Guy
Fred is one of my favorite VCs .... Product market fit isn’t a one-time, discrete point in time that announces itself with trumpet fanfares....Some companies achieve primary product market fit in one big bang. Most don’t, instead getting there through partial fits, a few false alarms, and a big dollop of perseverance..... I show below that Fred himself didn’t realize that Loudcloud had achieved product market fit even though we had...... We had to rebuild completely and would ultimately find product market fit in a different set of markets altogether....... the best markets are usually the ones in which competition is fierce because the opportunity is big...... Twitter (one of Fred’s brilliant investments) ..... Twitter is more exceptional than Loudcloud or Opsware..... Marc had moved on to found Ning and I was the CEO who nearly ran Loudcloud into the wall.
The real answer to this debate is there is no one size fits all. Fat or thin is right depending on what business cycle the economy is going through, depends on what stage the startup is in, depends on what the eventual size of its market and the startup's share of that market ends up being. There can only be so many Googles, and so many Facebooks. Most startups end up being neither and still succeeding. You can absolutely make the case for fat, but overall it is the lean startup that wins. Fat is few and far between. Some of the fat ones might be some of the biggest winners, but they will still be a numerical minority, a super minority. So if it is about betting, I'd bet on lean. Especially for early stage, definitely go lean. But a startup can start lean and go fat later. There is no one formula.

Loudcloud/Opsware is clearly a fat success story, but that does not make it the norm. The number of lean success stories far outnumber the fat success stories.

Ben and Fred come across as two large size figures in the tech industry who both have much respect for each other. That makes this debate extra interesting. There is this with-all-due-respect deference from both sides. You could argue this whole debate was masterminded by two heavyweights to pay compliments to each other.

Both are right. There is no one formula. The disagreement is in nuances. Ben has done fat well. Fred has done lean well, and many, many times. Can't argue with track records of success. Or maybe you can. Hence the blog posts and counter blog posts.

Ben saying "Twitter is more exceptional than Loudcloud or Opsware" had me chuckling. The statement is so very true.


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