"What Would Google Do?" by Jeff Jarvis

“What Would Google Do?” is a provocative title because Jarvis knows Google is unlikely to do many, if any, of the things he writes about. Things like run a bank, build cars or get involved in hospitals and insurance. What he tries to do is get at the essence of what has made Google successful, and use that to hypothesize how Google’s terms of engagement could be applied to other industries. Interesting…

When I was an economics student I learned there were only four engines of prosperity and wealth:

1. Arbitrage: The classic buy low/sell high, either across time, across space or between different buyers’ perceptions of value.
2. Compound growth: Reinvesting your winnings, no matter how modest, and letting exponential growth provide you with a healthy return.
3. Leverage: Borrowing to maximize the returns compared to the capital invested.
4. Value Enhancement: Addling labor, capital or marketing to a product to improve its value in the market place. What most of us do by going to work and laboring for wages and salaries.

Jarvis says that in the new market place all that has changed. Google has made “free” into a business model, and encouraged us to make money by “getting out of the way”.

In reality, what Google has done is removed one of the most significant barriers to a free market: getting perfect or near-perfect knowledge to consumers at near zero cost. In the old economy one of the reasons people made a lot of money in the four ways above was because they had access to knowledge at a cost most couldn’t attain. They knew where to invest, where to leverage, how to add value and where the best price differentials were. Google changes all that. Google commodifies everything and enables everyone equal access to all parts of the market at the lowest visible cost.

The book is in two parts. First, Jarvis sets out new business realities in a world where instantaneous knowledge is near perfect and near free. Second, Jarvis looks at specific industries and speculates on what they would look like if they were run in a way that takes most advantage of the new business realities.

Here are a couple of examples. “Atoms are a drag” and so in the new world businesses should try to be as virtual as possible. Avoid buildings, trucks and stock in your business…manufacture just in time to meet consumer demands, and distribute using existing infrastructure that you access at the lowest possible cost. This is the model Amazon uses for selling and distributing books and many other goods, and it works. “Answers are instantaneous” so your consumer responsiveness better be lightening fast. “Everything is searchable” so you had better be transparent, honest and capable of recovering from your mistakes.

One of the most significant areas of analysis in the book is the section on ethics. The message seems to be that when everything you do is searchable and visible to all you better be good. Although the approach is very pragmatic and utilitarian it nevertheless encourages all business people to be honest, open, collaborative and self-regulating. Not a bad admonishment for businesses everywhere.

I like this book largely because of the second half. It’s interesting to look at how Jarvis envisions Google running retail: responsive, collaborative, and virtual. In Jarvis world restaurants would aggregate all the information available about who orders what with what, and use it to offer you specials, discounts and wine/food pairings based on your tastes and the tastes of the people you emulate. Airlines get out of the business of “moving atoms” and get into being a social marketplace where people can exchange travel options. Car companies collaborate with consumers to produce vehicles people really want, (a purple electric SUV with DVDs, a child’s high chair and no stereo perhaps).

Jarvis personal style is a little irritating. I learned too much about how much he earns, how successful his meetings are at Davos and what it’s like to run an internet community of his devoted fans. Still, the book has many valuable insights into doing business in a modern economy. It’s worth it just for the great chapters on “If Google ruled the world”.