When you're just so damn rich, and the money keeps pouring in, it's very hard to stay focused, to relentlessly innovate, to admit (if only to yourself) that you're just as imperfect as everyone else, and make just as many mistakes.
It was true for Microsoft, it's true for Google, and it's true for everyone else. (Well, those of us who are rich enough not to have to give a sh*t. Not me personally.)
I wonder if there were some structural attempts (at Google or elsewhere) at mitigating this effect, like voluntary creating nano-competition by spinning off a bunch of companies just to see how the perceive trends and create on their own.
It definitely happens in the valley; Cisco was notorious in the 90s and 00s for acquiring "spin-ins" (startups founded by ex-Cisco leadership/teams with an almost certain expectation of returning to the mothership), and I'm sure there are other examples.
Less drastically, Google (and I'm sure many other valley peers) will often set up special incentive structures for certain teams: bonuses tied to aggressive adoption metrics and separated from the company-wide bonus, for example. I doubt it comes close to cutting that safety net (and making people truly hungry), but I give them credit for trying.
Thanks for the info, "spin-ins", is exactly the idea I was trying to describe. And I agree with you, in-house incentives are probably far from being enough.
When you are small, a small trend which is likely to be big can yield huge growth percentage-wise. When you are big, these are in the near-to-moderate term marginal at best so what you do is you buy startups.
One of the big breakthroughs for me personally was modelling business growth on a sigmoid curve.
It was true for Microsoft, it's true for Google, and it's true for everyone else. (Well, those of us who are rich enough not to have to give a sh*t. Not me personally.)