Semi-Organic Growth, + Website by George T. Geis

Author:George T. Geis
Language: eng
Format: epub
ISBN: 9781118933237
Published: 2015-06-22T00:00:00+00:00

Failure and the Spirit of Experimentation

We noted earlier the pervasive spirit of experimentation that is part of Google's culture. The proclivity for experimentation is clearly present in Google's M&A activity. Of course, an acquisition such FlexyCore, which provided an application for improving the performance of Android, involves a much lower level of experimentation than moonshot acquisitions such as Makani Power.

Failure is inherently associated with experimentation and risk. In fact, we've seen, somewhat paradoxically with acquisitions such as Makani, that planned failure can be viewed as a success metric. With such acquisitions, Google feels it must not move too cautiously into the unknown.

Given Google's experimentation mentality, one would expect that some M&A activity would be likely to miscarry. In addition, Google's use of M&A to expand its market reach increases the level of risk as the company attempts to move farther away from its core competency.

So some of Google's M&A miscarriage can be attributed to the company's failure is a feature mentality. Even before the company had huge financial resources, Google's founders exhibited a proclivity for making bets with the potential to change the way the world works. According to Ramsey Allington, a Director of M&A Integration at Google: “Larry and Sergey are scientists and they believe in allowing people to fail. Yes, it costs time and money, but that kind of exploration is what makes us who we are.”4

However, there are Google M&A failures that do not have primary roots in scientific exploration. We now examine some of these deals.

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