Eric Schmidt, former CEO of Google, shared some powerful lessons on how to build and scale successful teams during an insightful 82-minute interview.
Drawing from his time at Google, as well as his leadership roles at Sun Microsystems and Novell, Schmidt provided strategies that have shaped some of the world’s most successful tech companies.
Share on LinkedinHere are the 8 biggest takeaways from his interview:
1. Ask the five-year question
Schmidt emphasized the importance of thinking long-term by asking, “What does the next five years look like?”
This question helps leaders focus on future opportunities and challenges, instead of getting caught up in short-term thinking.
He learned this lesson during his time at Sun Microsystems when the company didn’t adapt to the rise of personal computers, which led to missed opportunities.
By looking ahead, companies can prepare and position themselves to thrive in the future.
2. Know when to scale
Scaling a business too early can be a critical mistake if the product or service isn’t fully ready.
Schmidt explained that understanding the right moment to scale is crucial. For instance, Uber had a strong business model, but initially, their app wasn’t ready for a large-scale rollout. The company had to fine-tune the product before expanding.
This balance between readiness and growth is essential to avoid premature scaling that could lead to failure.
3. Embrace a culture of feedback and iteration
At Google, any employee could challenge a decision if they felt something wasn’t right. This culture of open feedback, inspired by the Japanese kanban system, encouraged constant iteration and improvement.
Schmidt believes that fostering such an environment is vital for innovation, as it allows the best ideas to surface, regardless of their source.
4. Hire generalists with unique backgrounds
Schmidt shared Google’s unique hiring philosophy: they focused on bringing in generalists who had diverse and interesting backgrounds.
For example, he mentioned a candidate who was not only academically brilliant but also a licensed pilot. This approach ensured that Google’s team members were not just experts in their fields but also adaptable and creative problem solvers.
By hiring people with varied experiences, the company cultivated a versatile team capable of thinking outside the box.
5. Build small, strong teams for product development
Great products often come from small, focused teams with strong leadership. Schmidt pointed out that these teams should be deeply committed to their projects and willing to make tough trade-offs.
He cited the development of the original iPod and iPhone as examples. These products started with minimal features but were meticulously crafted to be perfect for their time.
Small teams can move faster, innovate more freely, and deliver exceptional products.
6. Do things that don’t scale
In Google’s early days, Schmidt and the company’s founders, Larry Page and Sergey Brin, personally reviewed EVERY resume.
They believed that each new hire could significantly impact the company’s culture and future. This hands-on approach allowed them to maintain high hiring standards and ensure that every new team member fit their vision.
While this method isn’t scalable in the long run, it was crucial in building a strong foundation during the company’s formative years.
7. Take bold technological approaches
Schmidt stressed the importance of encouraging bold and unconventional ideas. A standout example from Google’s history is how it transformed its ad sales strategy.
Initially, Google relied on a traditional sales team to sell ads. This approach, however, was inefficient as the company grew.
Salar Kamangar, an early Google employee, proposed a radical shift: instead of using a sales team to negotiate deals, why not let advertisers bid for ad placements based on keywords?
This led to the creation of Google’s AdWords auction system, one of the most successful advertising models in history. By letting market dynamics determine the price of each click, this system maximized revenue and streamlined the process.
The lesson here is clear: be open to transformative ideas, no matter where they come from. These innovations, though unconventional at first, can change the trajectory of your business.
8. Recognize the role of luck and timing
Schmidt acknowledged that luck and timing play a huge role in a company’s success. Google’s decision to focus on search ads turned out to be incredibly lucrative, enabling the company to fund various ambitious projects.
Being in the right place at the right time, and being able to capitalize on those moments, is often what separates successful companies from those that struggle.
Understanding this can help businesses stay agile and open to new opportunities.
Final thoughts
Eric Schmidt’s insights offer a valuable playbook for building and scaling successful teams in the tech industry.
By thinking long-term, fostering a culture of feedback, hiring diverse talent, and being open to bold ideas, companies can position themselves for sustained growth and innovation.