Google Needs To Be Everywhere. But To Do That It Needs To Be Trusted

And that is going to take some serious strategic reimagining, if it is even possible anymore. JL

Ben Thompson reports in Stratechery:

Google has a new mission — to bring a more helpful Google to you. Pichai’s articulation of the company’s new goal is helpful to understand what the company was driving towards: to “be helpful” Google needs to be everywhere, which by extension means the company needs to be trusted. To succeed, Google has to get better at all parts of the funnel, from initial awareness to education to conversion to channel to distribution to support. However, there is not much evidence the company has made progress in any of these areas, and, given how strong the company’s core business remains, not much motivation to either.
The most surprising revelation from (the) Made by Google 19 keynote came in Google Senior Vice President of Devices and Services Rick Osterloh’s opening remarks:

If you look across all of Google’s products, from Search to Maps, Gmail to Photos, our mission is to bring a more helpful Google for you. Creating tools that help you increase your knowledge, success, health, and happiness. Now when we apply that mission to hardware and services, it means creating products like…Pixel phones, wearables, laptops, and Nest devices for the home. Each one is thoughtfully and responsibly designed to help you day to day without intruding on your life.

Did you catch that? Apparently Google has a new mission — to bring a more helpful Google to you. So much for organizing the world’s information!
To be clear, I’m overplaying what was surely a misstatement; five months ago, at the beginning of May’s Google I/O keynote, CEO Sundar Pichai both reiterated the company’s longstanding mission statement while also introducing the “helpful” phrasing that Osterloh used:

It all begins with our mission to organize the world’s information and make it universally accessible and useful. Today our mission feels as relevant as ever, but the way we approach it is constantly evolving. We are moving from a company that helps you find answers to a company that helps you get things done. This morning we’ll introduce you to many products built on a foundation of user trust and privacy…we want our products to work harder for you in the context of your job, your home, and your life. They all share a single goal: to be helpful, so we can be there for you big and small over the course of your day.

So “being helpful” is the company’s goal, not its mission statement. A fine distinction, perhaps, but I’m grateful for the misstatement: going back to Pichai’s comments was how I made sense of what was, at first viewing, a pretty boring and self-satisfied event.

Google’s Announcements

Google announced, in order:

• That Stadia, the company’s video game streaming service, would launch on November 19th
• Pixel Buds, the company’s AirPods competitor, which will ship in “Spring 2020”; there weren’t even working models for the press to try
• Pixelbook Go, the company’s third Chromebook, which will start shipping October 28
• New pricing for Nest Aware, the cloud recording service for Nest devices; instead of charging a fee per device Google will charge a flat fee per household. The new plans will launch in “early 2020”
• Nest Wifi, a mashup of its Google Wifi mesh router with Google Home speakers, which will start shipping November 4
• A new Nest Mini, a replacement for the Google Home Mini, which will start shipping on October 22
• The Pixel 4 smartphone, with radar chips, new cameras, and enhanced Google Assistant capabilities; it will start shipping on October 24

The first thing that is striking about this list is how many of the announcements won’t ship for quite some time. The second thing is that most of the products were not announced on their own merits, but rather after long interludes about Google’s product development process. Like I said, boring and self-satisfied.
Pichai’s articulation of the company’s new goal, though, is helpful to understand what I believe the company was driving towards: to “be helpful” Google needs to be everywhere, which by extension means the company needs to be trusted. Thus the announcement of a wide array of products — whether ready to launch or not — that covered a multitude of places of where you might need Google’s assistance, done in the context of explaining how Google really does have its users best interests at heart.

Google’s Vision

Osterloh described this vision as “ambient computing”. From the keynote:

In the mobile era, smartphones changed the world. It’s super useful to have a powerful computer everywhere you are. But it’s even more useful when computing is anywhere you need it, always available to help. Now you heard me talk about this idea with Baratunde, that helpful computing can be all around you — ambient computing. Your devices work together with services and AI, so help is anywhere you want it, and it’s fluid. The technology just fades into the background when you don’t need it. So the devices aren’t the center of the system, you are. That’s our vision for ambient computing.

Frankly, it’s a compelling vision on multiple dimensions:

• First, it is a vision for the future that actually seems larger than the smartphone reality we live in. Alternatives like augmented reality or wearables feel smaller.
• Second, it is a vision that does not compete with the smartphone, but rather leverages it. The smartphone is so useful for so many things that any directly competitive technology would have to cover an impossible number of use cases to displace it; ambient computing, though, simply conceives of the smart phone as one of several means to deliver on its promise.
• Third, it is a vision that Google is uniquely suited to pursue. The company is a services company incentivized to serve the maximum number of customers no matter the means (i.e. device), and it already has a head start in providing services that contain and accumulate essential information about people’s lives.

Note how much better Google is placed than Facebook or Amazon, both of which I wrote about two weeks ago. The latter two companies are hindered by their lack of a smartphone, and their beachheads in the consumer space — Oculus and Alexa, respectively — are constrained by specialization in the case of Facebook and location in the case of Amazon. Ambient computing that goes away when you turn off a headset or leave your house is not truly ambient. Osterloh made this point:

The Google Assistant plays a critical role here. It pulls everything together and gives you a familiar, natural way to get the help you need. Our users tell us they find the Google Assistant to be smart, user-friendly, and reliable, and that’s so important for ambient technology. Interactions need to feel natural and intuitive. Here’s an example: if you want to listen to music, the experience should be the same whether you are in the kitchen, you are driving in your car, or hanging out with friends. No matter what you are doing, you should be able to just say the name of the song and the music just plays without you having to pull out a phone and tap on screens or push buttons.

Only companies with smartphone platforms can deliver the same experience everywhere. That is to say, only Google and Apple, and the latter seems to be barely trying in the home in particular.

Google’s Integration

This also explains why Google, despite being a Services company, is investing in hardware. Clayton Christensen in The Innovator’s Solution, explained what it took to win in new markets:

When there is a performance gap — when product functionality and reliability are not yet good enough to address the needs of customers in a given tier of the market — companies must compete by making the best possible products. In the race to do this, firms that build their products around proprietary, interdependent architectures enjoy an important competitive advantage against competitors whose product architectures are modular, because the standardization inherent in modularity takes too many degrees of design freedom away from engineers, and they cannot not optimize performance.
To close the performance gap with each new product generation, competitive forces compel engineers to fit the pieces of their systems together in ever-more-efficient ways in order to wring the most performance possible out of the technology that is available. When firms must compete by making the best possible products, they cannot not simply assemble standardized components, because from an engineering point of view, standardization of interfaces (meaning fewer degrees of design freedom) would force them to back away from the frontier of what is technologically possible. When the product is not good enough, backing off from the best that can be done means that you’ll fall behind.

In the case of ambient computing, “integration” does not refer to an individual device and its associated software. Rather, the integration that matters is between all of the various devices that exist in every part of your life — home, work, play, and everywhere-in-between — and the service that links them together. Thus all of Google’s various hardware offerings: without question the best solution for ambient computing by some time next year will be Nest devices in your house, a Google Pixel in your pocket, Pixel Buds in your ears, and a Pixelbook at work.

I don’t think this is Google’s long-run goal, though, nor should it be. While the company has at times been drawn into the trap of prioritizing and differentiating Android with its services, the fundamental services nature of Google means that its ambient computing offering will leverage any OEM that wishes to take part, even Apple. For now, though, the technology just isn’t good-enough, which is why Google is doing a lot of the work itself.

Google’s Challenges

Despite how well-placed Google is to execute on this vision, it is not a certainty that the company will win, for reasons both structural and also internal to Google itself.
First, the customers most likely to not only be interested in the idea of ambient computing but to also have the significant funds necessary to buy all of the various gadgets required to make it a reality probably use iPhones. Apple was the high-end integrated player in smartphones, and contra-Christensen, that was a sustainably large portion of the market. Google, meanwhile, was the modular player in smartphones, which meant it had the most affordable smartphone offerings and by far the largest marketshare. The challenge the company faces is that its modular customer base is less likely to spend on the integrated solution that Google is selling.
Second, while Siri will likely never reach the reliability and usability of Google Assistant — Apple has its own internal challenges — Apple continues to increase the switching cost from iPhone by doubling down on devices. AirPods are infinitely better than Pixel Buds in that they actually exist and have for three years, and the Apple Watch continues to grow strongly. Both devices, particularly when used together, also give you ambient computing beyond the smartphone (and yes, HomePod is still muddling along).
Third, as I noted above, Google spent so much time yesterday framing its approach in terms of user-centricity for a very good reason: its core advertising business is under attack for treating users and their data as a commodity. This raises the question as to whether customers will be comfortable having Google involved in even more aspects of their life, a point that Apple has and will continue to make regularly (Google, as I wrote after I/O, is fighting back by touting the benefits that come from it having so much data).
Fourth, Google has a business model problem. Yes, per the previous point, being a continuous presence in people’s lives will bring in even more data for ever more finely targeted advertisements, but there is no place for advertising in ambient computing generally. The Google Assistant can only give one answer, and it had better be the best one, not one that is paid for, if Google wishes to retain trust.
Fifth, to the extent the previous point does not matter, simply because Search and Display and YouTube make so much money, is the extent to which Google can be lackadaisical about execution. It doesn’t really matter that a good portion of the products announced yesterday won’t be ready until next month or next year because they are a rounding error on Google’s income statement. That may seem like a luxury, but in fact needing to succeed or die is one of the greatest advantages a company can have, particularly while trying to enter a new market.

Google’s Culture

One thing Google can absolutely work on is their messaging: I found yesterday’s presentation dreadfully boring, and only picked up on what Google was trying to convey on a second viewing.
That, though, isn’t necessarily a surprise. Google from its founding has succeeded simply by being better and letting the masses figure it out for themselves. It completely worked too: Google search was better than anything else on the market, and by virtue of being on the Internet it was immediately accessible to anyone anywhere on a zero marginal cost basis.
The company struggles, though, when it has to actually sell something. Look no further than Google Cloud Platform, which is a distant third to Amazon (which was first) and Microsoft (which can sell, particularly to existing customers). The company is currently trying to brute force its way into contention, hiring a VP from Oracle and a whole bunch of salespeople, but those efforts will run up against the company’s sense that simply building better stuff should be enough.
The challenges in ambient computing will be different given the differences between the consumer and enterprise markets, but no less significant: to succeed, particularly with its integrated offering, Google has to get better at all parts of the funnel, from initial awareness to education to conversion to channel to distribution to support. However, there is not much evidence the company has made progress in any of these areas, and, given how strong the company’s core business remains, not much motivation to either.
That’s the thing with visions: they are easy to come up with, harder to articulate, and even more difficult to build. It is the selling, though, that truly requires dedication.