Crossing the Rubicon

Its meteoric rise is the envy of executives and geeks around the world… for those in technology, it is a marvel of Web strategy, and for Wall Street, it just may be the company all aspire to own.
No view of what matters in 2007 could be complete without mentioning Google. I’m going to propose something really crazy–actually blasphemous–here in Silicon Valley. I’m going to go out on a ledge.
Google and YouTube
I think Google may be crossing the Rubicon with the YouTube deal. So, with YouTube, Google becomes the category leader of all search, in the broadest possible way you can define it. Which means, in my mind, they are vulnerable to those that excel at focused search.
Now, before you form an angry mob and ask me to leave the Bay Area (I like it here!), let me explain my premise.
Newbies iterate without baggage
Who and what creates a category isn’t necessarily who develops and grows a category. That’s why Ning (Marc Andressen’s new company) is definitely an iteration that one ups MySpace. Where MySpace has the same standard profile for everyone, and a lack of ability to limit who sees the social network, Ning can be customized in several ways and will allow those that care about privacy and brand to manage their own networks.
The disruptors get disrupted
Here’s the point–where YouTube and MySpace disrupted the media, Ning is going to disrupt YouTube and MySpace. It’s called innovation. There were two important conferences related to the Web model this year, O’Reilly’s well-known Web 2.0 and the Future of Web Apps. The key thing is that almost every company in the room at both events said they were going to compete with Google. Not to do things in the exact same way as Google, but to innovate and create a new arena.
I believe that arena is context-based search. Once, the Ford was the automotive industry standard. Then along came iterations and derivations that appealed to consumers in unique and special ways. Ford’s competition then did something shocking. They painted their cars in several colors, as well as in the standard black. Consumers loved having that choice and were lured away from the black “tin lizzies.”
Keeping customers after you’ve established a category
We’re there again. Google is effectively the “Model T of Search.” What I believe we’re seeing is the beginning of context-based, customer-relevant search. I imagine when I do a search on “beer” in the future, the software will know whether I want to drink, sell, or brew it. And that will change my experience of search.
The lesson is clear for business leaders in every industry: incumbents have a different set of risks once they’ve established a category. They have to be “backwards compatible” even while bringing customers along as they move forward. That’s a heavy load. The requirements are very different for the newcomer who only has to offer something incrementally better.
Game on for Google
Technology makes it very easy for a user to drop the old and leap into the new. Witness Third World countries building cell networks instead of wired telephone systems. That doesn’t mean existing players aren’t going to be innovators. But they’d better focus on substance that says customer love. Having the CEO “jump the shark” at the next big event is not an acceptable substitute for increased speed, exceptional customer service and award-winning design. Google, with their position of strength, now needs to hone their craft and out-innovate to win against their biggest competitor–themselves.