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Follow the Incentives, Waze Edition
Noam Bardin, recently CEO of Waze, wrote a critique of, well, everything about Waze at Google. He was frustrated and wanted to get it off his chest. A “fuck you, goodbye" message may be temporarily satisfying but it is never a good idea long-term, large-scale. But at least it gives us a good example of incentives at work.
Here are his points:
Alignment—Noam brings this up first and he could stop there. In a small company, people have naturally aligned incentives. As part of a large company, incentives diverge and lo and behold behavior follows.
Firing—In a large company the cost of firing someone is much larger (thank you unlawful termination lawsuits) than the benefit of firing them. So the team goes a little slower, whatever, who is going to notice. Yep, Noam, incentives change and behavior follows.
Distribution—Google didn’t distribute Waze aggressively. Big ol’ Google has an incentive to project an image of treating all apps equally. So they did. The loss of Waze usage was the marketing cost of pretending to be fair.
Focus—Noam complains about time spent on legal, policy, & privacy. Google has much more to lose than little, independent Waze did, so they work hard not to lose it.
Compensation—Noam bemoans the loss of incentives that come from putting compensation at risk. I’ll have much more to say about this in future posts but for now I’ll point you to this. Putting compensation at risk in a large corporation, or even basing it on narrower product metrics, leads to perverse incentives.
Directness—It’s not what you say, Noam, it’s what they hear.
Work life balance—Noam complains that kids these days don’t want to work hard. Compare their incentives today as part of Waze as part of Google with Noam’s incentives early at Waze. If he won he’d have created a legendary app and he would be financially set for life. It they win they will have a slightly quicker trip up a corporate ladder. Different incentives, different behavior.
Congratulations to Noam on a successful acquisition. It doesn’t go much better than that and it certainly goes much worse sometimes. But when incentives change, behavior changes, and complaining about that connection doesn’t make much sense.