Easy to say, hard to do.
How I learned to think big.

What Google taught me and why it inspired me to found CapitalG

david lawee
Sep 2, 2020 · 6 min read

I was a perfectly good entrepreneur before I landed at Google.

In 2002, I co-founded XFire, an instant messaging service focused on gamers. XFire’s mission was to make gaming more social. Or more simply, it was the embodiment of how I wanted to play games with my friends.

XFire was a big success, enabling millions of gamers to communicate across thousands of games. In 2006, we sold XFire to Viacom for over a hundred million dollars. It was exhilarating. Yet by Silicon Valley standards, it was merely a “good outcome.” I had no concept of what “great” felt like.

Little did I know what lay ahead of me.

Still in love with technology and the company-building process, I was recruited to join Google as its first Chief Marketing Officer and later its Head of Corporate Development. In Corp Dev, I was in charge of scouring the globe to find companies that were strategic to our future growth, and then persuading their founders to sell their businesses to Google and join our global mission to organize the world’s information and make it universally accessible and useful.

It’s hard to imagine, but at that time people could still be divided into those who used Google for search and those who preferred Yahoo or MSN. MapQuest was the most popular mapping service.

By no means was Google’s success inevitable. And what I learned from day one is that no step in the journey had been or would be left to chance.

Google is not an accident.

What truly set Google apart was how its founders Larry Page and Sergey Brin envisioned every dimension of scaling. Their growth mindset was baked into the company’s DNA. And seeing it first-hand was mind blowing. The founders’ systematic, principled thinking transcended everything from product and engineering to organizational design. Everything was designed to work at 100x, or in some instances, 1000x our current scale.

Incrementalism had no place at Google. Take the pursuit to be global for example: A product manager needed to be able to simultaneously launch all new products and features in 17 countries in order to launch anything at all. You couldn’t just launch in one country and then roll out others sequentially. This Google product requirement meant that you couldn’t build a product that was only tailored to the US. All products had to be designed for global usage — with all the inherent complications that entails — from the outset. Everything had to scale. It may sound obvious now, but principles like these gave us a clear-eyed sense for how to pursue our mission.

Larry and Sergey’s strategy and approach to scaling was a guiding principle in many of our Corp Dev acquisitions. We could attract the world’s best entrepreneurs to Google because we could meaningfully help them bring their products to market. Google Maps, Android and YouTube are three terrific examples: when we bought them, they were tiny companies with phenomenal products built by visionary entrepreneurs. Android, for example, had just 7 employees when Google acquired the company.

By 2013, it was time for a new challenge.

By this point, I knew that the growth journey I had experienced over the previous 8 years was how I wanted to spend the rest of my life. I asked myself, how could I use the lessons I had learned at Google to help other entrepreneurs?

My answer was to leave Google and start a venture fund — one that would be focused on growth investing, the stage where I considered my experience to be the most valuable.

I talked to Larry about whether he might want to invest his own money in the fund, and instead of saying yes, he convinced me to start the fund within Alphabet.

It was a win-win. Alphabet could invest its capital in the best entrepreneurs, and entrepreneurs could have access to what was then — and is still now — the world’s largest network of experts.

Larry Page and David Lawee sit down for dinner and discussion with the founders of CrowdStrike, Cloudflare, Credit Karma and Gusto

Starting CapitalG took a Google-like approach

The business of investing is contingent on one’s ability to attract, develop and retain the best investors. The best investors are extremely mobile, so I knew I would need to give everything at this fund the same degree of thoughtfulness that we applied to Google.

With CapitalG, I set out to build a culture that would be a great place for exceptional people. This began with a series of bets on what would not only differentiate us from other funds, but what would ultimately make us better on all levels.

  1. First things first, we bet on an equal partnership. Equal in decision making, governance and compensation. I needed to demonstrate to the investors I wanted to attract that we could create more value together than any of us could individually. Doing this would help us avoid the splintering and unproductive theatrics so common in other funds.
  2. We bet on trusting partners’ to invest independently. This makes us faster and I believe better. The group helps us think more clearly, but doesn’t make decisions.
  3. We bet on co-located partners — travelling the globe versus setting up multiple offices. The type of culture we wanted to build required people being in relationships. We didn’t want to create islands of capital, nor did we need to invest in a market that wasn’t performing just because we had a presence.
  4. We bet that the team needed to be small. This enabled us to deliver on all of the bets above and avoided a situation that could have forced us to make decisions based on what’s political versus what’s right.

And, we’re still improving everyday

After almost 8 years, it is clear that we have been successful in skating to where the puck is going. With trillions of dollars moving to the cloud, our investments in enterprise software are paying off. Fintech is large and growing yet still in the early innings, and the gig economy has become foundational to the world’s economy.

But what really strikes me is less our investment success in a bull market, and more that so many of our early bets on people and culture have paid off. We have not only attracted and developed some terrific investors; we have attracted incredibly strong talent across the organization.

Particularly important to me are of course the General Partners. They’re the driving force, the juice. The integrity they show in leadership sets the tone.

Laela Sturdy, a second-to-none firebrand, a wickedly smart and incisive operator and investor, with a sixth sense for what it takes to scale.

Gene Frantz, the voice of reason. Not only is he an incredibly seasoned investor… he is the kind of person an entrepreneur chooses for their ‘3am’ call.

Derek Zanutto, our newest General Partner, is a fierce competitor who brings with him expertise in data, security and SaaS-based enterprise software.

Our team is our core.

Our hope is to continue to earn the right to work with some of the world’s best entrepreneurs to build some of the most consequential global companies.

Our strategy is to do this with relentless integrity, access to the greatest minds of our time and an unparalleled commitment to growth and scaling.

The CapitalG team competes in a friendly, company-wide olympics
CapitalG

We unlock the talent, passion and strategic expertise of Alphabet’s leaders for you. We combine this wealth of knowledge with our own, gained from our portfolio companies’ growth stories, and our own experience as investors, operators, former Googlers and entrepreneurs.

david lawee

Written by

CapitalG

We unlock the talent, passion and strategic expertise of Alphabet’s leaders for you. We combine this wealth of knowledge with our own, gained from our portfolio companies’ growth stories, and our own experience as investors, operators, former Googlers and entrepreneurs.