At: Google > Investor Relations > Founder's Letters > Original IPO Letter-2004
Somehow had missed this letter till date - I'm impressed. Any firm that can set itself such strong principles (in this era of obsessive compulsive Q-on-Q share-holder focus) needs to be lauded. It takes more than just IPO-time bravado to commit to statements like:
"we may do things that we believe have a positive impact on the world, even if the near term financial returns are not obvious"
"If opportunities arise that might cause us to sacrifice short term results but are in the best long term interest of our shareholders, we will take those opportunities. We will have the fortitude to do this."
"We provide many unusual benefits for our employees, including meals free of charge, doctors and washing machines. We are careful to consider the long term advantages to the company of these benefits. Expect us to add benefits rather than pare them down over time. We believe it is easy to be penny wise and pound foolish with respect to benefits that can save employees considerable time and improve their health and productivity."
Have been reading a book called "Mavericks at Work" by William Taylor and Polly LaBarre. The authors say that in an era of extreme competition, the only way for a firm to differentiate itself is by being a maverick, by being "truly original". While this might sound like blue ocean thinking rehashed, in truth they go one step further to indicate some of the components that create a maverick: viewing strategy as an advocacy - being passionate about defining the future and having a sense of purpose, rejecting short-term benefits to follow the long-term advocacy, having a truly distinctive value proposition and creating an environment which attracts the best talent available.
Its common sense that the essence of competitive advantage for a firm lies in its unique value proposition - however, while being lost in the mundane activities of everyday work, how many managers in established firms remember this ? how many managers in large firms go out of the way to try out something new for the first time ? how many managers look outside their industry for ideas ? and how many companies allow such critical thinking and appreciate such managers / employees ?
In mature industries, most firms resemble one another - they have a similar value proposition, a similar cost structure, similar strategic & growth plans, similar managers... - and if the industry is on a comfortable upward tangent - a similar resistance to change. The common question is "why should we do something others don't ?". They forget that, at some basic level, the existence of a firm depends on its level of uniqueness and risk taking ability.
I now know why entrepreneurship can flourish in the most mature of industries - as long there exist opportunities that managers in established firms ignore either due to sheer inertia or due to a lack of risk appetite, it is my hypothesis that one can set up a firm with a "different" value proposition in almost any industry. In other words, organizational inertia of large firms presents an opportunity for the entrepreneur.
In interesting times we live.