Google (GOOG) appears to be on the verge of taking over the tech innovation throne once held by Apple (AAPL). A sure sign of this was the success of Google’s annual I/O developers conference last week at San Francisco’s Moscone Center.
Tickets to the 5,000-seat, three-day conference sold out in just 49 minutes at $600 a pop. At the event, Chief Executive Officer Larry Page and other Google executives wowed the crowd with announcements about the new customized Google Maps, a new subscription music service (Google Play Music All Access), and a variety of new search tools.
This is only Google’s sixth year holding the I/O conference, which is targeted to open-source developers. It has quickly grown into a major media event rivaling Apple’s Worldwide Developers Conference (WWDC), which the company stages to wow the technology world with its innovations.
Apple’s event is still extremely popular: Tickets this year sold out in just two minutes at $1,699 each. (It will also be held at the Moscone Center, on June 10-14.) Apple, however, is under growing pressure to have a good showing, thanks to a perceived lack of innovation since Steve Jobs’s death.
While there is still the possibility of a major announcement by CEO Tim Cook at this year’s event, most of the tech blog chatter suggests Apple has nothing big and will have difficulty matching Google’s “wow factor.”
Google is winning this war because it has a better innovation process. The key to Google’s process is its “launch and iterate” approach. This means almost every new product the company puts out—including the ones announced last week—are introduced as a test. Based on early user feedback, Google makes adjustments and continues with either additional testing or a “soft launch,” where the product continues to be expanded at its own pace.
Google has conditioned its users and investors to accept that initial versions of products will be experimental. Apple consumers and shareholders, on the other hand, have grown accustomed to getting perfectly crafted, market-ready products. The iPod, iPhone, and iPad all worked beautifully from Day One and were launched with a big bang and lots of fanfare.
The Apple approach works fine if you have someone like Jobs who’s meticulous and can get everything right before introducing a product. But it’s much more difficult for mere mortals like the rest of us—and this is what’s limiting the output of Cook and the Apple team.
Google doesn’t have an innovation guru, but it does have an army of experimenters.
The highlight of the 2012 I/O conference was the announcement of Google Glass, a wearable computer that looks like a thin set of eyeglasses and allows for hands-free Web surfing. The initial version of it is so awkward and rough that it’s been lampooned by Saturday Night Live and Mashable, among others.
In Year One, Google made only about 10,000 units of Google Glass. Despite the product’s imperfections, people were clamoring to get them. Individuals who wanted to buy the glasses had to pay $1,500 and enter a social media contest to tell the company why they would be a good lead user. Google is using the feedback from owners of these initial units to refine the product.
Testing its new products in market with real consumers allows Google to try more things with less investment—and get more innovation in the end.
This is essentially what lightly funded startups do—they get a “proof of concept” product on the market quickly to see if their idea is viable and to interest additional investors. It’s known as finding the “minimum viable product” (MVP), a term coined by Eric Ries in his book The Lean Startup. An MVP is an inexpensive, often jerry-rigged product that delivers the desired consumer experience but at a lower cost, so that consumer interest in the concept can be tested.
One of Google’s latest innovations is a same-day delivery service called Google Shopping Direct, which delivers products from Target (TGT), Walgreens (WAG), and other stores to your home for free. Seventeen years ago a startup called Webvan had the same idea. Webvan raised $830 million, built an expensive infrastructure, went public—and then went belly-up as its flawed business model was exposed.
Google’s Shopping Direct test involves a small investment. Google bought a few trucks and set up a small operation in select San Francisco-area Zip Codes. If it can get enough people to sign up for the service, Google will likely invest more and expand. If the service fails … well, it becomes just another Google experiment someone on SNL can poke fun at.
Few companies have the self-confidence to take on Google’s launch and iterate model. Most prefer the safety of Apple’s “perfect it before you sell it” approach, because it shields senior managers from criticism. But Google has found a successful innovation process, and companies who follow suit will win the long-term innovation war.