AdSense Gusher

Paul Bucheit started Gmail at Google in 2001. Later he started AdSense to generate income for Gmail. Before he left in 2006, Bucheit coined the popular “do no evil” phrase.

AdSense grew into a gush of riches and Google became the dominant player in the digital Ad market.

In 2004, Google went public.

What if at that point Google had been a Radical company, with no hierarchy, no bosses, and no employees? What would Google do with only co-owners dedicated to decentralization, transparency, meaning, belonging, and experimentation? What would they do with their prosperous future? This is not too much of a stretch in that in 2002 Google did make a messed up attempt to “go flat.”

Fiat Google

We know what Fiat Google has done: they went public and started all kinds of projects to increase headcount and add heft to the management pyramid. They followed the Fiat logic and the hierarchy accumulated employees under a boss. The bosses became bigger bosses and got paid more, ad infinitum.

Fiat Google Shortcomings

Take a look at Fiat Google,^∇

We will use net income as equivalent to dividends. Like dividends, net income is earned by the people doing the work, but consumed by capital investors.

The situation is even worse when you look at their Capital Efficiency. If you have worked at a Fiat software company, it is blatantly obvious that the people create the value and capital efficiency can be viewed as profit per employee. Looking at it this way, Fiat Google’s capital efficiency peaked in 2006 and essentially plateaus after that.

Radical Google

A Radical Google would have acted differently. The motivation is to bring co-owners into the group, but only as needed. Present co-owners would want any more headcount than necessary.

In 2004, Radical Google would have had approximately $399 million in dividends to be distributed as RADs. Every Google co-owner would get a piece of those earned dividends according to the RADs they owned at the time. The amount of RADs is dynamic, and come from recognized contributions. People with lots of recognized contributions would get more and others less.

In 2005, Google co-owners would share $1.465 billion in earned dividends. Imagine every Googler getting around half a million dollars.

Radical Google Advantages

As a decentralized and transparent company, rGoogle would have likely not have the ballooning headcount that started around 2007.

Fiat Google couldn’t help their headcount addiction, a must have of Fiat hierarchies. But rGoogle co-owners would have grown their rank as needed.

Here is what ten years of rGoogle’s performance might have looked like,

Year	Employee Count	Net Income (Mil $)	RAD fund ($)
2004	3000	399.1	133,033
2005	3100	1465.4	472,710
2006	3077.5	961,719	3200
2007	3300	4203.7	1,273,848
2008	3400	4226.9	1,243,206
2009	3500	6520.4	1,862,971
2010	3600	8505	2,362,500
2011	3700	9737	2,631,622
2012	3800	10737	2,825,526
2013	3900	12733	3,264,872
2014	4000	14136	3,534,000

rGoogle co-owner could have earned a total of over $18M over that time. As people who co-owned the company, the 2004 rGooglers might have chosen to grow the company differently. rGoogle might have grown meteorically. This would also increase profit per co-owner because there’d be no Fiat hierarchy to grow. Oh, but the owners would not be billionaires today, just millionaires, same as every other co-owner.

ENDNOTES

• See Number of employees at Alphabet, <https://statistic.com/number-of-employees-at-alphabet>, and Google’s Net Income, <https://www.statista.com/statistics/266472/googles-net-income/>