My Challenge to Google Ventures

Google announced this week that they were creating a venture capital arm whose main objective will be to turn a profit.  The group, called Google Ventures, is expected to invest up to $100 million in the next 12 months.

The New York Times article on the announcement notes that “Google will tap the connections of its employees and its ties to the venture capital world to find promising startups in areas like the Internet, clean technology and life sciences” and that “the venture unit comes as Google is rethinking the mission of, its corporate philanthropy, which has invested in areas like clean energy. Some of those investments will now be made by the venture unit.”

Good idea, Google… but you can do better.

First, I would argue that if you want to launch a successful venture fund, and invest in ideas that will make your company money, you have to do things differently than the rest of the VC community (or most of them anyway).  Second, because you are Google, you actually have the resources to be able to do that — if you are willing.

What am I talking about?

1) You should look at funding companies that use of technology in new and innovative ways while also having the potential for a social return. There will always be new technologies to deploy — but in most/all cases, technology is not what will drive real change in our society.  And real change is what drives the potential for profit.  I challenge you to invest in process, curriculum, and training for people across the sectors where you are most interested (energy and the environment) — and not just in tools.  If you do, you can help people learn how to use these new technologies that are developed and apply them to have a real impact in the world.  You can also change the way we think about technology and its role in solving problems in our society (just have you, through Google, have changed the way we think about access to information).

2) You should do more than just invest in companies.  New startups are created every day, and some of them are very good.
Most of them, however, are going to fail — because the people behind the ideas don’t understand the massive changes that are underway in our society, the expectations of the public (or how to meet them), nor the community’s willingness (or in some cases ability) to change behaviors and embrace new things.  I challenge you to teach startups how to operate differently, and to demand new and creative ways of running organizations that ensure sustainability (not in the environmental context, though that is nice) and long-term impact.  Whether that’s a new balance sheet (as we talk about at WeMedia), a double bottom line, or a new way of driving something bigger and better than our out-dated ways of running companies, by doing so you will be acknowledging that the key to success going forward is going to be about more than a good product or widget (and that is important). If you do, you can change the entire marketplace – and everything that feeds it (like business schools, and how the media assesses success).

3) You should ask the community for help and be transparent. Venture capital firms tend to operate in secrecy… when the goal is to invest in a successful company that will result in huge financial benefits for investors, everyone wants to have an advantage. Competition is fierce.  But today’s economy is driven by collaboration and cooperation.  The best ideas aren’t going to come out of Silicon Valley alone or from within the rolodexes of your best employees.  The community, online especially, can help you to find great ideas and great companies — or where a need exists, help to create a company or a solution worth investing in.  I challenge you to ask for help, to allow a larger group of people to contribute ideas and help you to determine where to invest.  Don’t make it impossible to get a meeting or pitch an idea.  Invest early on, not just when a team has build a group of MBAs and other entrepreneurial veterans to lead their effort.  Open your doors to the world, show us your thinking, and encourage everyone to join you in the projects that you believe are worth pursuing.  If you do, not only can you find better ideas, and end up making more money, you can help more than just Google succeed.

The world is changing, in part because of the work that you do every day at Google. There is nothing wrong with making money, and I wish you the best of luck.  Whether you take my challenge(s) or not, recognize that there is more than you can do.  And the more you do, I believe, the better you will do as well (i.e. make more money).  Don’t settle for Google Ventures being just be one of the biggest funders in the world, make it one of the best as well.

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