Google was founded in 1998. Altavista was created 3 years earlier and although it was probably the most popular search engine for the English Internet it lost its relevance simply because Google was better at indexing the web and ranking the pages to extract the most relevant webpage for your query.

There’s an infamous negging question that some investors ask:

“It’s cool you folks are doing that but what if Google enters the space?”.

That question is mostly useless because Google isn’t really a single entity. It has myriads of products that you could compete with:

• There are core products where Google is practically invincible: search and advertising network.
• There are products where Google’s advantages in scale make it harder to compete. Google Photos is probably one of their best services. Google can easily absorb storage costs and has enough CS PhDs to augment it with basic AI. Try building something better – and free. Google Stadia requires very specific competencies in data centers, custom hardware, and exquisite backend. Even Android phones – Google might not be the best at hardware, but the example of Essential showed us how difficult it actually is.
• And there’s everything else, from Google Tasks to a myriad of canceled products in the Google’s graveyard.

You can definitely compete with Google’s non-core products. Gmail’s former lead designer explained why even with all their resources Google would have issues with shipping better software.

The obvious ways to tackle this problem is from the inside. I’ve tried that. As much as I loved Google Inbox (a product and team I co-founded but left before launch), what launched was a well executed and polished but watered-down version of the original vision.It isn’t that the teams behind these products don’t care. They care deeply. But big products have big teams and are often inside big companies with their own bigger (and often unclear) priorities. It is messy.

Can you tackle their core business though?

Facebook managed to build a compelling advertising business due to their enormous userbase and innate ability to capture data to target ads better.

Nobody was able to beat Google search though. The problem is that like many kinds of software there’s a positive feedback loop. The more people use Google the better results it can provide. This leads to even more people using Google since they believe it’s a superior product. All the data goes back to Google and improves its algorithms. With all that revenue Google is able to hire the smartest people in the world and pay them way above the market to ensure its algorithms would be advancing faster than any competitor is able to.

Yes, there’s Bing and privacy concerns push some people to DuckDuckGo but almost all of them admit that its search quality is at least slightly worse – it depends whether you care more for the relevance of the results or visual simplicity, lack of ads, AMP pages and search snippets that alternative engines provide.

10x or Nothing

In order to really beat Google, you need to build a compelling product. And since users’ habits are really hard to change, this product needs to be not just marginally better, but 10x better – and without all that data that Google already has. But wait, how can you achieve it? It’s not like Google’s search results are trash. They’re generally very good. When I was a kid I had an entire book on how to use various search engines (most of the services it taught are dead already). But now you don’t even have to learn, it basically knows what you need.

The current understanding of technology trends say that new platforms emerge during paradigm shifts.

• Microsoft became a dominant tech giant because it entered the market with the right product at the right time. As the hardware architecture became open, it quickly was commoditized and IBM with their old mainframes couldn’t compete.
• Then Microsoft lost its relevance when modern smartphones appeared and turned out to be more important devices than personal computers. Apple and Google defined that market and benefited greatly from it. In 2019 Apple made 54.7% of its revenue on the iPhone alone.

That gives us the direction to look into. Google takes our queries and provides us with webpages. But the fact is, we don’t really need webpages, at least in most cases. We need answers. That’s why Google has been adding all those search snippets that give you an answer without making you follow a link. But these snippets aren’t automated at the high-level and there’s an army of developers of Google building them out.

The paradigm shift would be some sort of AI that gives you answers to your questions. That could convince people to actually move to your platform – because the advantages are 100% clear. And this is an improbable task. We’ve taught Alexa how to answer the birthdate of Lincoln and the distance between the Earth and the Sun. Imagine a service that has to answer any question. What’s the best chair? What drugs to take if you have the flu? There’s an enormous set of challenges, not even just technical but also related to legal questions and basic safety.

Open AI recently released their GPT-3 language model that can generate answers. But people already figured out reliable ways to crack it. We’re still not able to create something that would pass a Turing test and it seems in order to replace the search engine with the answer engine we’d need a proper strong AI.

Google understands that. They invest enormous resources in AI, so many that a $500M acquisition of DeepMind pales. But the thing about the paradigm shifts is that incumbents aren’t always able to overcome them and keep their position at the technology Everest.

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Well, it’s 2023, ChatGPT is out there and Google’s founders got back to its HQ to discuss the threat posed by Open AI.