Will Google fail… again?

If you work just for money, you’ll never make it, but if you love what you’re doing and you always put the customer first, success will be yours.

Ray Kroc, founder of McDonald’s said. Google founders loved their search engine. Today Google seems to love money more than anything.

Google Catalogs, Google Answers, Google Wave and even the most recent, hyped up Google Buzz feature on a growing list of Google flops, with, on average, 200 projects that are being worked upon at any time at Google.

A seeming common denominator of all its failed attempts is its chase of existing and successful business models or competitors. Google Wave was to reinvent email; Google Buzz was to be a direct response to Twitter; Google Answers was to counter Yahoo! Answers and so on.

Since 2001, Google embarked on acquisition of middle and small size companies, in its bid to enhance the range of its services both vertically and horizontally. More than 80 acquired companies and 10 years later, yet its strategy, approach and mentality have hardly changed.

In a certain sense, Google stopped innovating. Many of its failures could be somewhat explained away by looking at how it tries to go about chasing others’ success. An enlightening interview with a Google exec revealed some crucial points – scope of work, team size and usage of infrastructure, etc. – of how Google cannot, for example, build an Instagr.am equivalent.

And now Groupon. Google’s unsuccessful story of trying to buy it for USD 6 billion did not finish there. It now decided to come up with its own answer. A déjà vu?

Of course, Google did and does good things. Adwords, Adsense, Analytics, Android and its transformation of online advertising using acquired DoubleClick technology, have done and will continue bringing value to businesses and end users.

But, is the value offered by Google justified by the growing number and impact of its flops?

It all boils down to a company’s DNA. Google’s DNA is search, and it built around it, growing and becoming successful. Now it tries to “go out” of its DNA and diversify, not an unusual drive for a company of its size and track record. It needs t keep in mind, however, that similar attitude brought down other big and successful companies in the past. Instead, what it could do is to make its own search smarter and richer (in relevancy, targetting and search result contents).

The usual question that Google and other failed/successful entrepreneurs/businesses ask themselves daily is, “Should we Innovate or Copy?” The word “Innovation” became a cliché, despite the fact that innovation wars lead nowhere and hurt everyone.

Perhaps it is time we start to mInnovate.

Does your business need a model to be successful?

What is business model?

Many people assume that as long as they have a great product or amazing service, success is a guarantee. This is an illusion, especially in the rat-race of the 21st century. Without a solid and well-thought business model, organizations/firms struggle to grow or even to survive.

Let’s define few terms, before continuing. Traditional business model has six components: value proposition, market segment, value chain structure, revenue generation/margins, position in value network and competitive strategy. The successful ones, however, tend to have the following three common features: offer a unique value, are difficult to imitate, and meet/create an (untapped) market demand. For the Internet, online business models became essential for online companies and traditional ones expanding their reach into the online. Online business models form an ecosystem comprising of four parts: company, customer, product and experience.

Some, Dot-com bust exposed an armada of good “look-and-feel” online companies, which had no working/sustainable business model and were a mere fluff in the market. But it is not only dot-coms that fail to conceive a deeper value in their offer. Some traditional businesses (such as newspapers), which branch out into online, blur their existing business models (by charging for access to obituaries while charging fee from those who choose to put them in the paper).

Is there a “right” business model for a company?

Some companies, both purely online or traditional, finding a business model that works, try to protect it as as Netflix did when it filed and was granted a patent for its business models (subsequently suing Blockbuster for patent infringement). An example of a very successful business model was at Xerox. It created the world’s first automatic paper copier. Xerox saw that with the high expense for each machine, there was no room for a substantial profit by simply selling machines. Their initial business model was based on the idea of leasing the machines and charging a fee per copy made. Because of its innovative and strong marketing activities, Xerox brand-name gradually became a verb “Xerox” which stands for copying paper (like Google stands for search). Recently, by incorporating environment-friendly concepts into their business model, Xerox started producing earth friendly designs that helped it save USD 2 billions in last 2 years.

On the Internet, where some social networks take a gigantic chunk of users’ online “time” are not, generally speaking, a commercial success and the investors are generally apprehensive about the business model they pursue – Facebook (which makes money from brand ads, partnerships, paid applications like virtual goods and performance ads) and Twitter that are still with us contrary to countless others that did not survive. Some suggested Twitter – it recently debuted its promoted tweets – to build business models around data mining and performing trend analysis, feed advertising, SMS ads, and subscriptions, integrating contextual ads, apps, and pages or even selling/suggesting friends. Lastly, few envision a tiered/freemium model whereby “basic” Twitter remains free but a premium service (a version of promoted tweets with more flexibility, options and cost structures) is offered for online brand builders and commercial businesses. Indeed, the whole business model/monetization topic for Twitter (and for Facebook) are so hot a topic that there are few dedicated topical channels as this one on Business Exchange.

Society + business = ?

Few days ago, the US state of Maryland has become the first state in America to recognize a new type of socially responsible corporation that can consider the public good in addition to shareholder obligations in business decisions. Until now the term “corporate social responsibility” was a badge for innovative, brave and socially conscious businesses such as Ben & Jerry’s whose social activism is well-known. There was no law supporting what they did. From now on, businesses that become (by amending their charters) “benefit corporations” may consider factors like employee interests, the environment and promoting arts and sciences, as well as shareholder interest.

And last but not least, what have you heard of a company called TOMS? Even if you have not, you will, very soon because they just completed giving away a million shoes. Their business model is simple: for every pair of shoes bought, they give one pair away. TOMS calls their model – unsurprisingly – One for One. Their name, TOMS, is taken from the word “tomorrow,” being part of the idea that if you buy a pair of TOMS shoes today, a pair is given away tomorrow.

What is the business model you currently operate in? Is your business model in-line with trends and values of your society, your target market and in the 21st century?