Google Fiber offers a lesson to businesses

Google’s scale is what brings it to the public’s attention, but the Google Fiber service is a great lesson to all businesses (even CRE) for how to spot the moment when change is on the horizon.

To recap for those not familiar- in 2011 Google announced Kansas City as the first location for their Google Fiber initiative.  Gigabit internet to the home.  For those that may have 10MB cable internet service – this is 100x faster.  The kicker?  They were offering this speed for the same or lower price than existing service providers of cable internet.  Did I mention that if you just want basic 5MB to the home service, you can have it free as long as you pay a $300 connection fee?  Absolutely incredible.

When Google first announced they were looking to install this, 1,000 cities applied to be the first to receive it.  Let’s stop for a second.  Most cities in the US currently have some broadband internet connection.  But a vendor comes along and says, we want you to come to us to install our service – how bad must the current vendors be?  This is lesson number 1 – if your customers start begging for a new participant in the market, you are doing something wrong.

The service goes live in Kansas City and the reviews have been extremely positive.  Great price, great service.  Everything the internet is supposed to be.  On top of it, the legacy competitors in the market start doing everything they can to compete better.  This is lesson number 2 – if a new market entrant causes you to compete harder without causing you to change your pricing model, you should have been competing on that level to start with.  Complacency is a loser’s game.

Take us to 2013, Google Fiber announces they are rolling the service out to Austin TX.  This now makes the service a public success.  The same pricing model is being applied.  That implies Google is making money through this service.  Even more cities are reaching out and asking for the service.  Suddenly some more legacy broadband service providers are starting to take notice.  So lesson number 3 – if you’ve had 2 years to see the success and business model of a new competitor and you haven’t adapted to it yet, you deserve whatever you get.

Did I mention that in The Consumerist’s most recent annual Worst Company in America contest that 8 of the 32 consumer voted worst companies were telecom providers (cell, cable, internet, etc.).

Final lesson (#4 for those playing the home game): when no legacy providers are willing to step up and do right by customers there’s a giant blue ocean available for innovation.  The customer should always come first.


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