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November 01, 2004

Google hires only the very best

One of Google's earliest investors, Ram Shriram, sheds some light on the real reasons Google is such a success.

Shriram said there is no magic formula to success. Rather, it comes from continual small ``block and tackle'' moves. Oh, and it helps to have a little book called ``Ram's Book of Mistakes'' to guide the way.

Shriram -- who worked at early Internet companies like Netscape, Amazon.com and Junglee -- became a prominent angel investor by writing an early check to Google's founders in 1998, and then advising them one day a week while they were still in a Menlo Park garage. He held about 2 percent of Google's shares, and made $22.6 million at Google's IPO offering. He held an additional paper value of $969 million in stock as of Friday's closing.

Shriram spoke in Santa Clara with Sridar Iyengar, president of the Silicon Valley chapter of the Indus Entrepreneurs.

Here's what he said:

Success is pretty much a crapshoot; there are too many unknown facts in a company's early life to make all the right decisions. But good, quick judgment calls on several fronts help multiply the chances of beating the odds.

Not even the wise man can see it coming: ``I had no premonition of the things to come,'' Shriram said, about meeting the founders in 1998 for the first time at the office of Stanford University professor Jeff Ullman, when he tested their search engine. For two months, he didn't think any more about it, until they called him.

It's the people, stupid. Shriram helped co-founders Larry Page and Sergey Brin in the Menlo Park garage by consulting his ``Ram's Book of Mistakes,'' which he said he started eight or nine years ago to help remind him of all the bad decisions he'd made. Bad hiring decisions are the most fatal.

It's all in the grooming. Shriram set out to make sure Page & Brin hired only the very best, or ``A'' people. He cited the well-known Silicon Valley tenet: Hire only A people, and they'll hire other A people. If you hire the B person, they'll hire C or D people. Someone asked a good question: How did Shriram decide who are so-called A people? Grooming is a part of it. ``I try to find out who their mothers are,'' he said. If they are raised well, they're more likely to make good citizens, employees and entrepreneurs.

Shriram counseled the audience: ``Be bold and dynamic,'' noting that there are huge opportunities afforded by the new Internet economy -- in China and India, especially.

Enterprise software is one sector that is slowing. When asked about comments by Oracle's Larry Ellison that the tech sector is consolidating, Shriram said Ellison was correct, but only concerning software: ``I'd say it's Larry's personal problem.'' He noted that Yahoo, Google and eBay had created 24,000 jobs, and that Internet companies had created $200 billion in stock market value in the last seven years. ``Not a bad achievement.''

Launching a company is easy. The great thing about the Internet is, you can launch and test an idea easily and cheaply. If it doesn't work, you can go back to the drawing board. ``If you build your field of dreams, and no one comes, you can shut it down,'' he said.

The trick is small engineering teams. ``Bite-size engineering projects,'' as Shriram calls them, where you can ``know and measure each person's output on a project.'' That allows you to remain innovative and to launch and scrap projects quickly.

Oh, and Shriram hasn't made a new investment in 12 months. And no, he's not publishing his personal ``Ram's Book of Mistakes'' anytime soon.

Source: Silicon Valley

Posted by nakul at November 1, 2004 12:26 PM | TrackBack
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