I'm Feeling Lucky_ The Confessions of Google Employee Number 59 - Douglas Edwards [65]
Affiliated with Failure
Personal finance was off limits at the office, but we talked freely about how to spend the company's money.
"All we need now," I informed Cindy after Larry and Sergey had given our marketing plan tentative approval, "is a budget." Shari and I started drafting one. A department of half a dozen people could never implement all the programs outlined in our blueprint, so Shari planned to hire a promotion agency. She had talked with one that recommended we build campaigns around a "Google Challenge" and a "Google Scavenger Hunt." The concepts made me squirm. They seemed old school. A taste test? A scavenger hunt? Would we do clip-and-save coupons too?
"Larry and Sergey are intrigued by ideas like painting the Google logo on rooftops along the flight path to the airport," Cindy said. "Outrageous stuff. They want to project the Google logo on the moon."
Shari would have to wrestle with that—I was busy figuring out Larry's proposed affiliate program. Affiliate programs were all the rage among online retailers like Amazon. Amazon encouraged other sites to put up links pointing to a particular book or video or CD they had for sale. Users who clicked on that link would be transferred to Amazon, along with information about the site that had sent them. If the users ended up buying something, Amazon would pay a bounty to the referring website. That made sense. A referring agent should be paid a commission when a sale is made. But we weren't selling anything. Our search service was free.
"I don't get this," I told Shari. "we're paying people to use a free product? Won't people just abuse it?" We would get more users, but we'd also end up paying people who just clicked on the links they had put on their own websites. I didn't think it would work, but I looked into it anyway, expecting we would eventually bury the whole program under a rock.
The first back-of-the-envelope budget calculation Shari and I did suggested six million dollars would fund all of our marketing initiatives. We went back and carefully reviewed all the variables, including efficiencies we could realize by doing work in-house. We ended up doubling it. Twelve million dollars was dangerously close to the number that Scott Epstein, the interim VP of marketing, had mentioned just before he headed out the door. Still, it was far less than Shari had spent in prior jobs, and Cindy assured us it was a reasonable amount for establishing a global brand. So we built an elaborate spreadsheet justifying the need to spend most of the cash we had in the bank on promotional activities.
We sliced, diced, and fluffed the numbers every way we could, showing how many impressions we'd generate and how many visitors we'd convert into regular users. Our arguments were clear, compelling, and fact-based. We gave the twelve-million-dollar figure to our controller, who tossed it in with all the other finance numbers to be scrubbed by the board of directors. Cindy would present our case.
"I'll never forget," said Cindy of that fateful board meeting, "John Doerr saying to me, 'Would you rather spend ten million dollars on marketing or on machines?' And I said, 'Machines,' and he said, 'All right then.' And I was dismissed. I was so pissed at Larry and Sergey for leading me to slaughter, not saying a word during the presentation. I'm sure they knew what the sentiment of the board would be. Why we had to go through this exercise I'll never know."
When the scrubbing was done, our marketing budget had shrunk by two-thirds and most of what remained was allocated to the affiliate program, which, Larry let us know with some heat, had already taken far too long to put into place.
I wasn't entirely surprised at the cuts. It was one thing to approve abstract ideas, but committing real dollars to implementing a plan was quite another. Larry and Sergey expected us to execute everything we had proposed; they just didn't