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Business Management

Google, Alphabet and the Try-Fail-Try-Again Economy

Usually a restructuring follows a fall. A company is struggling so it says, hey, that’s only because we built this wrong and now with this new way of doing things we’re all set. But Google is doing anything but struggle so the news that it is to create a holding company called Alphabet took all of us by surprise. So what’s happening here? I think that this is a sign of a very different business ethos to that which preceded the internet.

Google is creating Alphabet because it wants to continue to be a hothouse for ideas and let a thousand flowers bloom. It’s saying that Google the search engine and related ad business is core but we’re more than that. For modern companies like Amazon, Alibaba and Google this is the new way forward. You might call it the Try-Fail-Try-Again Economy or even the Robert the Bruce Economy after the Scottish king who noted the activities of the web-spinning spider and learned to ‘try, try, try again’.

In a world where opportunities seem to exist at every corner it’s wise to make lots of bets. Most companies have one good idea and the most successful ones execute against that idea. They target a market and then expand into other geographies and add some bells and whistles to extend interest or amplify range. But these new companies are not content with dominating one business, growing organically or moving into an adjacent market. So they move fast and try things with the expectation that most projects will fail but some will succeed and be worth all the expense and distraction of those failures.

This is nothing less than a fundamental reimagining of business expectations. Before, business lore said you should ‘stick to your knitting’, focus on a USP and own a core competency. Have too many ideas and you’re likely to lose focus or hear the crash of spinning plates falling. The new thinking says you should fail fast, get up off the floor and try again.

It is an approach with an inherent acceptance of risk but then to stay with your one competence is a risk too. The new thinking also fits in with today’s zeitgeist where we tolerate websites like Twitter having its Fail Whale moments and smartphones that have odd quirks due to their rapid refresh cycles. It’s a different world, and one where quality can sometimes be sacrificed for speed, but it’s one that we’re going to have to get used to.

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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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