DAVID RUBENSTEIN (DR): When you joined Google, it was a very small company. Did you in your wildest dreams ever imagine it would become one of the most valuable companies in the entire world?
ERIC SCHMIDT (ES): I don’t think any of us did. I certainly did not. When I met Larry and Sergey, they just seemed incredibly intelligent. They had this huge argument over something technical, and I hadn’t had that good an argument in a long time. I thought, “I’ve got to work with these people.” I wanted to join a company that was going to stay in one building. Today, of course, we are in many buildings.
DR: You were the CEO of Novell at the time you were getting ready to go to Google. You had many opportunities. What propelled you to pick Google?
ES: I actually didn’t interview anywhere else. [Venture-capitalist investor] John Doerr asked me to visit Google. I said, “Who cares about a search engine? It won’t matter very much. Who uses search engines?” But he said, “Nevertheless, go visit with Larry and Sergey.” What they were doing was so interesting, and the quality of the people they had recruited was so compelling, I just had to be there.
DR: There were plenty of search-engine companies. Why did you think Google had a search engine that was going to change the world?
ES: I didn’t particularly think Google was going to be that successful, but I thought the technology was unusually special. Alphabet had invented a different way of doing ranking. All of the previous search engines used a ranking easily manipulated by business forces. But Larry Page had invented something now known as PageRank, which is a different algorithm, a different way of doing search. It had spread virally, first at Stanford and then throughout the Bay Area, all by word of mouth. But I thought, “What a great project.”
DR: You had two people who were, quote, “the founders,” Larry and Sergey. But they wanted a CEO who had more experience—or at least the venture investors did. Was it awkward to come in and be the CEO when you were dealing with founders who didn’t have the CEO title?
ES: They had been searching for sixteen months for somebody they could work with. They would have each candidate do something with them for the weekend. So they’d go skiing with one of them, and they’d play sports with another one to see if they were compatible.
When I met them, we all had similar backgrounds, in the sense that we’re corporate scientists. But it was [snaps] an immediate click. I always knew, based on what had happened with John Sculley and Steve Jobs in the 1980s, that it was their company and my job was to make their company successful.
DR: Was it a normal interview?
ES: I walked into their office—a tiny office in this incredibly crowded building, which Google still has—and they had my biography up on the wall. They proceeded to ask each and every question possible based on the biography. I had never been so thoroughly questioned.
They came to a product I was building at Novell and they said, “This is the stupidest product ever made.” Which I, of course, had to respond to.
DR: You didn’t think you were going to get the job after they said that?
ES: I didn’t realize it was a job interview. I just came to visit. But as I left the building—which was, curiously, a building I had been in when I worked at Sun [Microsystems] years earlier, which shows you how history repeats itself—I knew I would be back.
DR: You did come back. It was a small company—a hundred employees, two hundred employees—when you joined. Did you realize that advertising would be the medium through which you would actually make the company grow?
ES: No. I was convinced the advertising approach they had taken did not work at all. When I became CEO, I was very concerned that there was something wrong. I actually asked them to audit the cash accounts to make sure people were selling these ads.
What we learned was that these targeted ads worked incredibly well, even though they were these little text ads. That discovery—and then the subsequent algorithmic improvements that allowed for auctions and so forth, which were done by impossibly young and creative engineers whom I viewed as sort of experimenting with things—created what is today Google.
DR: The culture at Google was very unusual at the time. Others have emulated it. But it’s a culture of “Do what you want, wear what you want, sleep in the office if you want”?
ES: We do have a dress code: you have to wear something. We had problems where engineers would move in and put cots on the floor. We would explain that you can do anything you want to at Google, but you can’t live here. You have to have a bed somewhere else.
We famously encouraged people to bring pets. We had lots of rules about the pets. We didn’t have any rules about the people. But if your pet was over here, you had to keep your pet over here.
DR: What about the food? You had free food for everybody. What was the purpose behind that?
ES: The comment was that the free food really changed everything. Many of these things were marketed as great fun, but there was a serious business behind them. In the case of the food, this was Sergey’s idea. Families eat dinner together, and he wanted the company to be a family. If you made sure people had proper, good food—breakfast, lunch, and dinner—they would literally work as teams.
They would work in whatever way made the most sense. Larry and Sergey invented something called 20 percent time. The idea is that if the employees, especially the engineers, are interested in something, they can spend 20 percent of their time on whatever they’re interested in.
Oh my God, how could you run a company that way? Well, it allowed the engineers who were sitting there at dinner to have conversations: “What do you think, what do you think, what do you think?”
I’ll give you another example. Larry Page was looking at our ads as they came out. He studied them. He put a big sign on the wall: “These ads suck.” I was looking at this and I said, “This is another stupid Google thing, right? Nothing’s going to happen.” We have an ads team, we have a manager, we have a plan.
This was Friday afternoon. I came in Monday morning, and a completely different set of teams had seen the sign and had invented, over the weekend, what today is the underlying ad system of Google and delivered it on Monday morning. That could not have occurred without such a culture.
DR: You told me on a previous occasion that one time you were out of the office, then you came back and somebody had occupied your office.
ES: At the time, Google’s culture was seen as very unusual. I knew this, and I was always careful not to commit a faux pas, if you will. One morning I walk in and my assistant has this look on her face like something bad has happened. I walk into my office, which is eight feet by twelve feet, and here is my new roommate.
He has moved himself in. He’s working. I didn’t know that I had a new roommate. After all, I am the CEO. Someone should tell me these things, right?
So I said, “Hello, who are you?” He says, “Hello, I’m Amit. Nice to meet you.” I said, “Why are you here?” And he goes, “You’re never here and I was in a six-person office. It was too loud.”
I thought, “What to say to this?” because this is a career-limiting moment. If I say, “Get out of my office,” they’re going to fire me or something. I said, “Okay. Did you ask permission?” He goes, “I asked my boss and he said it was a great idea.” I said, “Okay.” So we sat next to each other, and he would program and I would do my work, literally next to each other, for a year. And we became best friends.
DR: You grew up in Virginia?
ES: Rural Virginia.
DR: What made you think you wanted to be an engineer?
ES: I was a normal science-interested boy. This was at the time of the space program, and everyone wanted to be an astronaut. In my high school, they had a terminal. These were the old ASR-33 teletypes. My father had the good thought to get one for our house, which was highly unusual at the time. I would spend every evening working and reprogramming. Today, of course, if I were a fifteen-year-old at home, I’d have five personal computers and a supernetwork and sound blaring out of the speakers.
DR: You went to high school in Virginia. You must have done pretty well to get into Princeton.
ES: Yes, although it was easier back then.
DR: You knew you wanted to be an engineer?
ES: I actually applied to Princeton as an architect. When I got there, I discovered that I wasn’t a very good architect, but I was a much better programmer. Princeton, again, was kind in that I was advanced enough that I was able to skip the introductory courses and go straight into the advanced courses and then the graduate courses.
DR: You must have done pretty well, because you then got a scholarship to go to Berkeley and get your PhD. Was it hard to move across the country?
ES: No. To give an example of how naïve people were back then, I decided I wanted to move out to California because I heard that it was nice and had sunny beaches. Of course, I went to the wrong part. This was before Google Maps.
I worked at Bell Labs, where Unix, which is the basis of much of computing today, was invented. I was a junior programmer there. And I worked as a young programmer at Xerox Palo Alto Research Center, where the workstation, and the screens, and many of the editors, and many of the networking things that we use today were invented. I was unusually fortunate to be an assistant to the people doing that kind of research. From there I went to Sun Microsystems, where I was an executive for many years.
DR: And from there you were recruited to Novell?
ES: Yes. I was at Sun for fourteen years, Novell for four, and now Google for sixteen-plus years.
DR: As the company became bigger and bigger, it dominated the search business. It has 90 percent of the search world, more or less. Why did Google say, “We don’t want to just be in the search business”?
ES: Google’s motto was not only “Search the web.” It was “All the world’s information.” Information is broadly consumed. The company set out, with all of the hiring that we were able to do and the talent, to begin to solve some new problems.
We became very interested in maps, then we developed our own maps—a hugely successful product line. We bought a company called YouTube, which today is incredibly successful in video and other forms of information. We built an enterprise business that has done incredibly well. I can go on. In some cases, we’ve bought little companies that we grew, like Google Earth. In other cases, these were technologies that we grew ourselves.
The whole idea was to integrate around information. At some point four or five years ago, we became interested in solving problems—not just information problems but problems where digital technology could make a material difference, the most obvious one being self-driving cars. We’ve been working on that as a research project.
More than thirty-two thousand will die from car-related accidents this year in America; we just don’t know who they are. That’s how bad this is. Imagine if we could reduce that by half, or a third, or a quarter. Most of the accidents are driver-induced. We may ultimately be able to make driving accidents a very, very rare event.
DR: You’re obviously a leader in the science and technology world and in the corporate world. Do you think leaders are born? Are they made or educated?
ES: Leadership is a little bit of both. You have to have some innate skills, but it can certainly be learned. I also believe that as a leader you need to do something very well.
That stereotype of a general manager is not really how the world works today. Now the managers are uniquely good at something, and then they learn other things. I don’t think it matters where you start, but you need to be incredibly good at that one thing and then you broaden your skills. Discipline, hard work, and loving what you do will get you very far.