Google Co-Founders Abandon Efforts to Imitate Warren Buffet’s Management Style

Back in 2015, Google founders Larry Page and Sergey Brin floated the Alphabet Inc. holding company to function as Google’s parent, allowing the duo more time and space to pursue other ventures. Sundar Pichai was made the chief of Google and has been running the tech giant since then. Now, the founders have announced their decision to step down from their position at Alphabet Inc., and have chosen Pichai to also lead Alphabet.

The decision to create Alphabet in the first place was somewhat reminiscent of Warren Buffet’s method of running multinational conglomerate holding company, Berkshire Hathaway Inc. Buffet’s approach requires feeding enough capital into several endeavors and instead of running them himself every day, allowed others to do so. The co-founders have given up on this “dream” but are expected to still function in the company as shareholders and board members.

As interesting as the move might sound, there is significant worry in many quarters over whether or not it’s the right one to make. The founders have made Pichai the Chief Executive Officer (CEO) of Alphabet, adding to his role as CEO of Google. Google is one of the most diversified tech companies available and the CEO already had his hands quite full as Google continuously dips into several cookie jars apart from its huge advertising business. These include autonomous vehicles, healthcare endeavors, delivery drones and many more.

Apart from these, Google is enmeshed in several issues, the most prominent of which is the anti-trust probes leveled against the company by both state and federal authorities. In addition, the company is having trouble with ex-employees as it was recently announced that four of the company’s engineers who were recently fired, have decided to file a protest with the National Labor Relations Board. Google maintains that the “Thanksgiving Four” as they are popularly called, committed several “clear and repeated violations” but the affected employees in a joint statement, have argued that Google is not abiding by the law and that the company is a lot “more interested in revenue growth than in ensuring worker rights and ethical conduct.”

All of these factors contribute to the increasingly popular notion that Pichai is already maxed out and adding more responsibilities for him might be a bad idea.

The creation of Alphabet Inc. is still considered unnecessary in many quarters especially because Google still accounts for almost 100% of Alphabet’s income. It however was received well by investors as it was a way to separate Google’s main internet and advertising business from other company projects.

A former Google product management director who is now a partner at Firebolt Ventures Vineet Buch, has suggested that this new development might mean that Google’s “Other Bets” will no longer enjoy certain privileges. 

“This may mean that the Other Bets have to start really functioning as businesses and there won’t be a two-tier system where Google is run as a business and the other projects have infinite time horizons to reach profitability”, said he.