I’m a land-bound midwesterner, and know next to nothing about sailing. But someone once explained to me that sailors tie ribbons to their sails and ropes. They call these "telltales". And then good sailors pay attention to the behavior of these ribbons so they can interpret the wind and achieve their destination more quickly. Good sailors learn to read these whisps of cloth to be more successful. As customers, employees, suppliers and investors we need to do the same. It is important we pay attention to small bits of information for the early signs they give of shifts in the business weather so we can be more successful.
Yesterday, buried deeply in my local newspaper was a small article about Google (see chart here) launching a new virtual reality site called Lively (read article here.) It was very small article (only 155 words), barely explaining what the site was, and offering no clue as to its potential impact. An article easily ignored. Ahhh, but this is a telltale.
Google is in the Rapids of growth. It is in a market growing at over 100%/quarter! Even bad operations in the markets of search and online ad placement are growing at over 30%/year and making money (see Yahoo! and MSN search for examples.) Because it’s in the Rapids, Google can make a lot of money and grow very fast while doing nothing more than establishing its Success Formula and continuing historical Lock-ins. There is no reason to expect Google to do poorly any time soon. But the interesting question is — when the growth slows will Google keep growing (like Cisco) or be another Sun Microsystems, Dell, or Microsoft? Will it be Locked in to its old business, and start to shrink, or will it have new businesses to keep it growing as market shifts develop?
We know Google acquired YouTube months back, and has left it independent. That looks like White Space – but we don’t yet know if it will be able to affect the Google Success Formula or if it will just be a content site for Google ad placement. So that’s maybe White Space, and we need to keep watching. We can’t yet determine if it’s White Space that will develop a new Success Formulas to keep Google evergreen.
This article on Lively therefore deserves more investigation. What’s the first step? Why a Google search on Google Lively of course! There we can find an India Times article on Lively (see here). Where better than in the land of information technology domination could you find an article that clearly explains the site and how it works. We also can go view the site (here). A bit more investigation into the IT world (see here) and we learn that these 3D virtual people and rooms are things you can add to a blog or web site (think software to juice up your home page, etc.) and it is a rich medium for gaming technology! On-line gaming is one of the few markets growing even faster than on-line advertising – and this opens new doors for growth beyond search and ads!
Additionally, one attack on Google has been its sparse search pages. Lively starts bringing forward much more robust interactivity with many different elements which could potentially expand how we would interact/use search (think less linearly and more dynamically about how an avatar could search in 3D kinds of ways) and social websites (like Facebook or MySpace). Potentially, we could use these Google Avatars or rooms to even manage our social networks across multiple sites – creating a sort of "layered" set of interactions between multiple "partners" with which we want to talk, play games, or share information in multiple environments simultaneously. Think about a wiki on steroids which can duplicate real-life meeting-style interactions. We could conduct various business sessions with these avatars, such as on-line training applications, simulations (for business negotiations, or planning [think real-time interactive SimCity]), or real negotiations for office leasing or acquiring office supplies or even parts for a factory (read more here about applications). Avatars could behave like interactive bots searching the web for new sources and deals. These environments could be sponsored by a vendor, with ads, or created as user environments (like TypePad on which this blog is created) for businesspeople to use.
What we can determine is Google is definitely setting up White Space here. It may not look like much right now – but then again how excited were you by most web sites when they first popped up? It’s important to note that these White Space projects appear to have permission to do things otherwise not done in traditional Google, and are quite well funded. Both hugely important factors. They also operate with independence to see what sorts of Success Formulas they can develop – and thus be the next generation toward which Google may head. All told, these Telltales indicate very good things for Google to maintain its rapid growth.
Of course, the hard part that lies ahead will be seeing if Google actually uses these projects to change its Success Formula (today built on Search and ad placement). Google’s growth has allowed it to eschew Disrupting itself. Why bother to Disrupt with growth exceeding everyone’s expectations? But for these White Spaces to make a difference, it will be necessary for Google to eventually demonstrate it can Disrupt it’s Lock-ins and transition its Success Formula into new businesses that maintain growth and profits.
For now, all looks good for Google. They are managing the Rapids well, and we can see the signs of White Space being implemented. We’ll have to keep watching to see if leadership can Disrupt to take advantage of these projects when the weather shifts to less rapid sailing – but for now it’s a very good thing to see this White Space being implemented. Something far too few high growth companies do enough of.