Clever Geek Handbook
27 December 2025

In the Plex

Recommendation

Journalist Steven Levy’s previous books about Macintosh computers and about hackers make him the perfect insider-outsider, with the knowledge to write a detailed history of famously private Google. Granted unprecedented access, Levy appears to have insightfully interviewed everyone about every moment of Google’s history to present this canonical version of the company’s saga. Levy seems a little too close to his subject, so perhaps his book is not a warts-and-all chronicle, but most of the stories are fascinating, and it is all well reported. BooksInShort recommends this heavily anecdotal history to readers who are launching a start-up, intrigued by computers and cultural history, or interested in a nice, detailed dose of the truth behind all those Google rumors.

Take-Aways

  • Google seeks to “organize all the information in the world.”
  • The two founders Larry Page and Sergey Brin see speed as the most valuable processing quality.
  • Google found its moneymaking mechanism with the advent of AdWords in 2000 and had its first profitable year in 2002.
  • Page and Brin became billionaires when Google went public in 2004.
  • Google plans for the future on the basis of needing and owning infinite storage and bandwidth, and knowing that technology keeps becoming cheaper.
  • The company routinely transforms its search engines in great secrecy. In 2009 alone, Google made more than 600 changes to improve searches.
  • Google’s users unknowingly take part in Google’s constant quality testing.
  • The firm built more than a “dozen billion-dollar” secure, energy efficient data centers.
  • Google constructs servers from low-cost parts, keeps them warmer than industry standards to save energy, expects them to fail and shifts data instantly when they do.
  • As of 2009, the number of books in print in all the globe’s languages was 129,864,880. If it has its way, Google will scan them all.

Summary

Beginnings

Larry Page and Sergey Brin founded Google. Neither man thought big at the beginning. Big was nothing. They both thought in terms of global. Page was brilliant, farseeing and magnificently ambitious. He so strongly believed in routinely attempting the impossible that his co-workers joked: “Page went to the future and came back to tell us about it.”

“Page and Brin both held a core belief that the success of their company would hinge on having world-class engineers and scientists committed to their ambitious vision.”

The partners met when Brin was Page’s guide on a San Francisco tour. Both studied computer science at Stanford University in California and reveled in the future they saw coming – a time when everyone would be connected. Brin completed his bachelor’s degree in three years and became one of Stanford’s youngest-ever PhD students. He finished his required courses quickly and took whatever modules he liked in search of a doctoral thesis topic. Studying computer science, Page became fascinated by how web pages linked. He set out to find a way to navigate the vast random online world and created the PageRank program, which “rated websites by the incoming links.” It granted higher status to pages linked to the greatest number of other pages. After some refining, he realized that its power lay not in “ranking annotations, but...ranking searches.” He saw PageRank as a way to search for anything online. That was the foundation of Google.

“To make progress. . .you would have to live in the data, breathe it in like a fish passing water through its gills.”

Page and Brin used PageRank as material for their doctoral theses, but they wanted to earn money from it, too. They offered the PageRank search engine to Yahoo, but, unable to see its commercial potential, the company declined. Page and Brin met with various potential buyers, but all said no, though some deals came close. Determined to build their own company, they selected a name based on the word “googol,” meaning a number 1 followed by 100 zeros. Misspelling it as “Google” proved fortuitous, since somebody had already licensed “googol.” When one of Page and Brin’s first investors gave them a check for $100,000, Brin told him: “We don’t have a bank account.” They had one by September 1998, when they incorporated Google.

If you had the right tools, it was possible to treat everything in the open web like a single document.”

The company operated from Page’s dorm room. In no time, Google was dealing with “10,000 queries a day.” Page and Brin scrounged all the servers they could glean as students and even purchased drives. The gear filled the dorm room. Early searches could take an unacceptable 3.5 seconds. Speed, which was Google’s Holy Grail from the beginning, mattered more to Page and Brin than any other computer processing magic. Page and Brin were engineers first. They wanted a workforce of the world’s best engineers. They hired fellow graduates and former professors. The quality and quantity of their hires convinced Silicon Valley that Google was a serious endeavor. In less than a year, Page and Brin had their own research team and “a group of top scientists totally committed to [their] vision.”

Let It Break

By 1999, Google had more than 3,000 computers. Page and Brin’s unconventional brilliance was apparent in their choice of hardware. They knew they would need more and more machines, and that would eat their capital. The demand for storage space would only grow. So from the beginning, they bought cheap equipment, much of it “below-spec,” machines and parts of such low quality that the manufacturers would not guarantee them. The groundbreaking idea was that Google’s engineers did not care if the machines broke. They expected it. Google designed its software to shift storage and processing instantly to other machines in case of failure. Because it bought so cheaply, Google could afford redundancy. Brin and Page always planned – far ahead of anyone else – to have massive storage. Head engineer Wayne Rosing explained, “The unit of thinking around here is a terabyte” (10 trillion bits of data). Google’s founders understood that storage demand would always grow and the cost of technology would always drop; chips, processors and servers would become faster and continually cheaper.

“Just as with its search engine, Google was letting its users teach it about the world.”

Page cited inventor Nikola Tesla as his inspiration, but Tesla never made money from his groundbreaking discoveries in electricity. Obsessed with doing well, Page would not repeat Tesla’s mistake. Although Brin once wondered aloud if ad sales would grow enough to make it worthwhile to buy a fax machine to receive orders, the advent of AdWords in October 2000 answered that question and ended any risk that Google would fail to reap a huge fortune. AdWords – search terms that customers pay for according to a click-through rate – gave Google its first profitable year in 2002. AdWords Select went on to become a “spectacular commercial success” and “the dominant transaction mechanism” for Internet advertising.

Translation

Page and Brin regard different languages as a mere technical problem. They want Google to be able to translate any page into almost any language. As early as 2001, users could read Google in 26 languages. Google expert Franz Och said, “Provide the computer with large amounts of monolingual text, and the computer should figure out. . .what the structures are.” Google built the largest language models “in the history of mankind.” When its engineers saw that processors began to understand a language after about a billion words, in true Google style, they fed the system multiple billions. The more sentences a computer absorbed, the more it understood. Google used an ingenious, counterintuitive solution to establish a speech recognition system: The company launched a free US telephone directory service and never monetized it. Google just wanted millions of callers to “teach” its computers how spoken language works. After a few years, when it had enough samples of spoken English, Google quietly discontinued the service.

The Campus

As Google expanded, it outgrew one location after another. In 2003, it bought the campus of Silicon Graphics, a “troubled” software firm. The legendary Google work life began here as Google refitted the building for energy savings and encouraged workers to arrange entire floors for their own efficiency. Over time, Google came to provide on-campus dry cleaning, films, massages, car washes, grocery shopping and gyms. Company chefs offer a variety of free food. Renowned experts lecture on technical and cultural topics, and workers take a wide range of courses at Google University. Google buildings all have tech shops with in-house repair people and conference rooms staffers can book in one-hour slots on a companywide schedule. Every conference table has built-in projection systems, plus plugs and chargers for every computer, tablet or phone. People never have to leave meetings to go back to their offices for missing gear or waste time figuring out how to hook up an audiovisual system. Google does everything it can to make sure “Googlers,” as it calls staffers, never have to leave. People channel the time they’d usually spend on errands into their work. Life becomes more efficient for them and for Google.

Going Public

Brin and Page long resisted the gargantuan payday that going public would bring them, their investors and their employees. They ran the business in an intensely private way. They feared that an IPO would make employees overly concerned about the rise and fall of the stock price and that morale might suffer. But Google’s venture capital investors knew it was time. As Google contacted various banks to handle the gigantic transaction, it used different phrasing in each letter to each bank to track any possible leaks. Turning away high-profile bank CEOs, Google’s chiefs met only with the bankers who would actually do the work. Page and Brin demanded that the value of the original offered shares had to be $2,718,281,828. That was a math gag aimed at geeks who would spot the initial digits of “the irrational number e. . .Napier’s Constant.”

“Google made historic profits...by creating a new form of advertising.”

Google launched its IPO on August 19, 2004. That day, Rosing held an all-employee meeting while brandishing a baseball bat. He told the assembled Googlers that if they went out and bought BMWs or Porsches he would be in the parking lot, smashing windshields. Google had always been low-key and dedicated to performance, and upper management was determined that a waterfall of new wealth would not change that culture. But how could it not? When the IPO was finished, Brin and Page each held Google stock worth $3.8 billion.

“Google began making so much money that its biggest problem became hiding how much.”

In June 2006, Yahoo, having once refused to buy PageRank, signed Google to handle all its online searches. Seeing Google’s logo on every Yahoo search page enhanced Google’s brand and weakened Yahoo’s. The deal gave Google the “most current data” and the biggest index of web pages in the world – more than a billion. Google constantly revamps its search methods. In 2009 alone, its engineers made more than 600 changes to its search codes and protocols. Google runs new versions for millions of people without them knowing it, thus involving users in constant quality tests. Google operates in such secrecy that its pioneering engineers receive little publicity. They are “heroes at Google but nowhere else.”

Data Centers

As the fiber optics market began to collapse after the dot-com bust, Google bought all the fiber optic networks it could. Now it owns more than any other firm worldwide and has so much fiber optic capability that, even with its own incalculable usage, it can rent bandwidth to other data providers. Google never needs to worry about having enough bandwidth, and it is immune to bandwidth price fluctuations. Google just plows ahead with its hordes of cheap servers, all crashing predictably and shuttling data to working machines. Multiple redundancies in servers, cabling and cooling apparatus make the method profitable. Google has never revealed how many servers it requires. Its head of infrastructure, Jim Reese, admitted in 2002 that Google had at least 10,000 servers processing more than 150 million searches daily; today it has many more.

“Google was determined to maintain its sense of play, even if it had to work to do it.”

Google stacks its electricity-hungry servers in towers (in 2005, all US data servers combined accounted for 1.2% of the nation’s annual electrical consumption). Google data centers, and similar warehouses full of servers, must be adjacent to fiber optic cables, close to water, near power lines, in acres of enclosed space, private and easy to secure. Racks of servers discharge hot air and require cooling so they don’t overheat. Seeing existing centers as outdated and energy inefficient, Google used an eccentric, forward-looking method to heat and cool its servers. One groundbreaking step was to run its cool rooms warmer than other companies. This saved a fortune, but more servers failed. “You counted on failure,” explained one data center designer.

“Without leaving the campus you could see a doctor, do Pilates, get a Swiss massage.”

Google decided to build or buy enormous data centers, fill them with shipping containers, and pack those modules with racks of servers. “Once focused entirely on building Internet software,” Google began to construct more than “a dozen billion-dollar facilities” in such places as Goose Creek, South Carolina; Moncks Corner, North Carolina; and The Dalles, Oregon – towns with depressed economies where local governments gladly granted Google sweetheart tax deals to get construction and service jobs. Google manages the servers and runs the centers remotely, whether they hold “500 or 500,000 computers,” and hires workers mostly to keep the facilities going.

Google Books

Eager to possess and share all the knowledge in the world, Page and Brin targeted the content of the approximately 33 million book titles printed since the invention of the printing press. Page pushed for a way to digitize the content of every book. Typically, he had no patience with anyone who used the word “impossible.” With Google’s money, brainpower and reach, he felt nothing should be impossible. Page considered simply buying every book and removing the pages for scanning. Google personnel determined that if they could scan a book for $10 and the world has 30 million books in print, the cost would be $300 million, which “didn’t sound like too much” for a company with $28 billion in annual revenues.

“Arthur Clarke once remarked that the best technology was indistinguishable from magic.”

However, early scanning methods were primitive. Googlers needed 42 minutes to scan a 300-page book. That seemed reasonable, but they knew the process could be more efficient. Google created a scanner that combined the images from “two special cameras with multiple stereoscopic lenses, each capturing the image of a page” from either end. An infrared camera also shot each page from above. Google could not, in the end, create a device that could turn pages without damaging them, so it hired a small army of page-turners. Google claims its scans were so accurate that page-turners’ fingers showed up on the scans. Google captured every page of every book as a separate document so online searchers could access the information in a variety of ways. As of August 10, 2009, the company estimated that the number of books in print in all the globe’s languages was 129,864,880. If it has its way, Google will scan them all.

About the Author

Steven Levy is the author of The Perfect Thing: How the iPod Shuffles Commerce, Culture, and Coolness; Insanely Great: The Life and Times of Macintosh, the Computer That Changed Everything; and Hackers: Heroes of the Computer Revolution.

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In the Plex

Book In the Plex

How Google Thinks, Works, and Shapes Our Lives

Simon & Schuster,
 


27 December 2025

Driving Excellence

Recommendation

Executive Mark Aesch faced a huge challenge in 2004 when he became CEO of Rochester, New York’s nearly bankrupt and dysfunctional public bus service, the Rochester Genesee Regional Transportation Authority (RGRTA). Employing best practices from the world of business and demonstrating strong leadership, Aesch turned RGRTA around, providing superior service while making the company profitable. Aesch describes how he worked this miracle with common sense, moral courage, clear purpose and strategies applicable to many business and leadership situations. BooksInShort recommends Aesch’s savvy management road map to anyone who needs to kick-start an underperforming organization.

Take-Aways

  • In 2004, Mark Aesch became CEO of the Rochester Genesee Regional Transportation Authority (RGRTA) of Rochester, New York.
  • RGRTA, near bankruptcy, suffered from a perverse corporate culture that was inefficient and unproductive.
  • Ignoring advice from entrenched interests, Aesch refused to raise fares and cut service.
  • He solicited and followed suggestions from front-line employees who dealt with customers daily.
  • As new CEO, Aesch introduced best practices, including using hard data, strong leadership and superior execution.
  • He took back power from a dominant, recalcitrant finance department.
  • Aesch instituted key achievement metrics.
  • Under his leadership, the RGRTA lowered the basic fare to $1.
  • RGRTA, now successful, operates with a huge surplus rather than its former deficit.
  • Aesch’s methods demonstrate how to turn around failing public agencies.

Summary

Farm Boy Makes Good

Mark Aesch, now CEO of the Rochester Genesee Regional Transportation Authority (RGRTA) in New York, grew up on a farm. The lessons of hard work and sacrifice he learned as a youngster – as well as the practice he gained in setting priorities (for example, feed the cows before you eat) – proved instrumental in his success at RGRTA. When he took over the public agency, it was dysfunctional, sloppily run and grossly inefficient, with a $27.7 million deficit.

“Many government agencies fail today because they serve neither taxpayers nor customers, but themselves.”

On his first days on the job, advisers told Aesch that RGRTA’s survival depended on increasing overall bus fares by 40% (and by 200% for disabled riders), scaling back passenger service by 65%, and cutting the workforce by approximately 25%. Aesch would have none of it. Instead, he boldly revamped the bus company’s perverse, self-defeating culture, and made superior execution and top-flight service its primary goals. RGRTA eliminated wasteful bus routes, increased the average number of passengers and cut back overtime pay. Aesch made the tough decisions necessary to save the agency.

Dramatic Turnaround

RGRTA dramatically changed its approach. Today, it operates with a $19.7 million surplus instead of a huge deficit. RGRTA cut its bus fleet by 12% while increasing the number of riders and the customer satisfaction ratings. The agency raised its productivity “by more than 90%” and its passenger count by more than 20%. Its buses carry 50% more passengers per mile than when Aesch took charge. At a time when mass transit systems across the United States experienced multiple fare increases, RGRTA lowered its fare to $1, a tariff last seen two decades ago. The company focuses on it passengers, which the agency refers to as “customers.” RGRTA envisions its buses as “movable stores” and its drivers as “greeters.”

“When your goal is to radically transform a company, changing the culture is as important as changing the balance sheet.”

Aesch remade RGRTA with strong leadership and a commitment to combine “the best practices from private sector companies” with a “dedication to public stewardship.” The agency’s turnaround, implemented through its “Driving Excellence” program, proves that public agencies – “hospitals, subway systems, schools and police forces” – can be productive, efficient and cost-effective. If the terribly flawed RGRTA can learn to perform, any organization can do the same.

A Bus Company Riding on Four Flats

Before Aesch, the Rochester bus company was a joke. Its dirty buses constantly ran behind schedule. Because of poor routing, some buses carried few or even no passengers as they rambled back and forth through the greater Rochester area, burning up expensive diesel fuel. Many drivers and other employees selfishly exploited RGRTA’s archaic work rules to the detriment of the agency’s shaky finances.

“Employees in the trenches know what customers want even more than the customers themselves.”

RGRTA’s flawed fare structure made getting low-income passengers from their homes in Rochester’s inner-city area to jobs in the city’s burgeoning suburbs a prohibitively expensive proposition. Despite RGRTA’s deficiencies and shabby service, the agency’s budget-setting philosophy could be summed up in four words: “four percent on top.” Each year RGRTA requested a 4% increase in its public subsidy from Rochester’s city government. That RGRTA had hardly earned such an increase was immaterial to its managers. RGRTA was a huge mess.

Walking Out on the New Boss

Nothing about changing the culture of RGRTA came easily. When Aesch, then 37, announced his turnaround plan at his first meeting with RGRTA employees, many were openly hostile. Union members swore and hissed as Aesch spoke. They rejected his message that RGRTA “didn’t run buses in an effort to employ drivers,” mechanics and other workers. “‘You people don’t give a damn about us!’ one driver shouted” at Aesch, before storming out of the meeting along with other RGRTA union employees. Aesch was not intimidated.

“Government has underperformed for so long that people doubt any agency can achieve breakthrough success.”

Aesch learned that RGRTA was a patriarchal, paternalistic organization, with senior managers arbitrarily making decisions without supportive data. The previous CEO had been directly involved in every salary raise for each of RGRTA’s 750 employees. Managers spent more time making decisions about bus drivers’ uniforms and the color of bus sign poles than about schedules and fares. Some decisions were downright silly. For example, one executive ruled that drivers could refuse to drive a bus off RGRTA’s lot if the vehicle was, in the driver’s opinion, dirty. This decision did not involve any steps to make the buses cleaner.

“We can’t fix organizations without people [being willing] to set aside their status quo, take risks and do things differently.”

Before Aesch arrived, another executive ordered that RGRTA henceforth should buy only smaller buses. He assigned his staff to research options. They spent many hours checking out smaller buses. Later, at a meeting to showcase the various options, the executive brusquely ruled out all the staff’s carefully researched choices. “Bring me the catalogs!” the executive yelled. He leafed through the bus model sales literature. “Buy those!” he barked. This executive’s arbitrary management style was typical of RGRTA senior leaders.

“The less information you have, the more open you are to attacks and criticism.”

Things were every bit as problematic on the workers’ side. Despite RGRTA’s serious financial problems, “We ain’t giving nothing back!” was the antagonistic attitude of most union workers. Employees hated RGRTA so much that one of them set off a pipe bomb in a senior manager’s workspace. No one seemed to care if buses ran late, if they were traveling garbage cans or if drivers were surly. The prevailing ethos at RGRTA was “take it or leave it.”

A Solid Mission and Vision

Aesch organized a Front-Line Advisory Group (FLAG) of employees who dealt with the public every day. The group met quarterly to develop initiatives for RGRTA to serve its passengers better. RGRTA instituted many of FLAG’s ideas, including a “one fare, one zone” system that became a hit with RGRTA’s passengers. Aesch and his team developed the Trip Scoring Index (TSI), a reliable method to measure the effectiveness of individual bus schedules. TSI has saved RGRTA “more than $25 million.”

“Employees will not all jump on board with a strategy overnight.”

Aesch understood that RGRTA needed a solid mission and vision that everyone could support. He and his management team developed the mission theme: “Putting buses where people want to go, when they want to go there.” Other goals included: “achieve financial stability,” provide “excellence in customer service” and promote “employee participation.”

“Be sure to lead. Finance will fill a vacuum of control if there is no vision coming from the top.”

With these objectives in mind, Aesch and his senior executives presented a new strategic plan to RGRTA’s board. As chairman John Doyle stated, “This is fantastic stuff.” Aesch personally communicated the strategy to RGRTA’s employees. At the same time, he and his management team renamed common aspects of the RGRTA experience: for example, “cash registers” for fare boxes and “stores” for buses. Aesch sought to rebrand RGRTA as a business that delivers valuable services to its “customers” (not passengers). The company also began to refer to employees as “team members.”

Reining in Finance

Aesch learned that RGRTA’s finance department, which controlled “annual budgeting and capital planning,” exercised an outsized influence on every aspect of the agency. Every dollar for operations came through the finance department. Without approval from “Finance,” no department got a penny. Aesch took steps to change this paralyzing arrangement. As he put it, “When I became CEO, there was going to be no doubt at the Authority who was in charge. It was going to be me and our vision, not Finance.”

“If employees are consulted, they’ll feel more convinced that management takes them seriously.”

Aesch insisted that the company’s finance executives meet with individual departments and present a summary of their financial requests without rendering any judgment on them. The executive committee – not the finance department – became responsible for determining whether the suggested allocation of financial resources most effectively supported RGRTA’s “Strategic Plan and Operating Plan.”

“The forces of change must stand their ground...Leadership isn’t a popularity contest.”

To instill accountability, Aesch revamped RGRTA’s compensation system to prioritize performance. RGRTA provides strict definitions in its motivational programs, and its incentives match goals that directly relate to critical strategic objectives. RGRTA uses reliable data to measure performance and is diligent about workers’ compensation. All employees at RGRTA – executives, managers and workers – know exactly what they must do and how they must do it to earn more money.

Monitoring and Measurement

RGRTA stays on top of its overall performance through its Transit Organization Performance Scorecard (TOPS) program. This “performance-based management approach” measures crucial RGRTA strategic areas: “Excellence in Customer Service, Long-Term Financial Success and Employee Success.” Another RGRTA measurement system is the “Customer Satisfaction Index” (CSI). But accurate performance data makes no difference if individual employees aren’t motivated to improve operations. To ensure that RGRTA hires the best workers, Aesch authorized a total revamping of RGRTA’s employment practices, including the introduction of a new advertising program entitled “RGRTA is a Great Place to Work.”

Creating Change

To turn around an underperforming agency, you must make the organization’s culture proud, self-vitalizing and success-oriented. You must operate strategically, monitor and measure the important things, and insist on accountability from all corners. Developing a public-private ethos, in which the people you serve become customers, is crucial. Your organization’s problems will not fix themselves. You must demonstrate strong and steady leadership at all times, and that requires courage. At RGRTA, Aesch helped to foment a “culture of humility, objective information and accountability.” He ensured that his daily decisions supported RGRTA’s core principles.

“Open yourself to change. Dramatic and sustained improvement won’t come from doing things the same way.”

Aesch tries to “take a stand” and “do the right thing.” He knows he has to take on not only tough decisions, but also what he calls “sad decisions,” that is, choices that while right, “tear our guts when we make them.” None of this is easy. Leaders must stick to their guns – and dedicate themselves to improving their organizations – no matter the obstacles encountered. You should insist on “performance-based aid” from the government your agency serves, not just for your organization, but also for all other publicly subsidized agencies.

“The world has a lot of survivors. Be a succeeder instead.”

Other important “rules of the road” include:

  • Everything a CEO says and does sends a message – positive or negative – to employees.
  • Teach employees that serving their customers is more important than serving themselves.
  • Rely on front-line employees for information about what’s important to your customers.
  • Directly tie compensation to performance and “spending to strategy.”
  • Embrace data. Make data available throughout your organization.
  • Make sure every agency employee understands his or her performance in terms of the agency’s vital metrics.
  • Financial management does not necessarily translate to financial success.
  • Budget collaboratively.
  • Ensure that all employees understand what success means for the organization.
  • Benchmark how your agency performs against similar agencies.
  • Focus on what counts most.
  • Do not be afraid of change.
  • Do not be afraid to lead.

About the Author

Mark Aesch is CEO of the Rochester Genesee Regional Transportation Authority (RGRTA), Rochester, New York.

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Driving Excellence

Book Driving Excellence

Transform Your Organization's Culture - And Achieve Revolutionary Results

Hyperion,
 


27 December 2025

Innocent

Recommendation

British childhood friends Richard Reed, Adam Balon and Jon Wright sold their first 1,000 smoothies at a music festival in London. Today, their company, Innocent, sells smoothies in 15 countries across Europe, and the firm makes more than £200 million each year. At their company’s launch, Reed, Balon and Wright were three twentysomething buddies who wanted to make eating healthy easier for busy people. This bio of their smoothie enterprise is short, funny and useful, with hands-on business advice for budding entrepreneurs. BooksInShort recommends this diverting book to current and future entrepreneurs looking to lose their innocence about launching a business.

Take-Aways

  • Many people have a “big idea” for a business, but they never get started.
  • Take the plunge and start small.
  • Know your target audience and make sure you can easily explain your idea.
  • Don’t lose focus. “Keep the main thing the main thing.”
  • After you’ve started, be careful as you cope with growth, one of the most challenging aspects of running a business.
  • Decide what parts of your business you will outsource and what you will do yourself.
  • What are your values? The smoothie company Innocent’s leaders set out to “make food good” using environmentally sustainable and ethically grown fresh produce.
  • Your people will make or break your business. Recruit and retain employees who share your values.
  • Advertising is expensive. Try low-cost strategies, like electronic media and free press coverage.
  • Listen to your customers.

Summary

Getting Started

Good friends Richard Reed, Adam Balon and Jon Wright, all in their 20s, always worked long hours. Their diet consisted mainly of beer and pizza. Seeking a way to eat healthy food quickly, they considered smoothies – crushing real fruit into bottles busy people like them could drink on the go. Another company in the United Kingdom, Pete & Johnny (PJs), already offered this product – but their smoothies came from concentrated syrup and compromised on natural ingredients. Reed, Balon and Wright determined to make smoothies using fresh ingredients.

“Like most good business ideas, ours was clear and simple. The world of commerce rewards simplicity and its associates, clarity and focus.”

The three partners first sold their smoothies from a market stall at a West London event, Jazz on the Green. They made smoothies in their kitchen, but had to manufacture 1,000 bottles for the festival. They met Jeff, an 80-year-old farmer who grew (and loved) carrots and carrot juice. Jeff bragged that he could bring carrot juice from his farm in Nottinghamshire to London in less than six hours. Reed, Balon and Wright loved him. They bought £500 worth of produce from him for the festival, where they sold their first 1,000 smoothies.

“The theory behind the Granny Test is that if you need three paragraphs to explain your idea and strategy, it’s probably too complicated or unclear.”

They put two huge bins, one with a YES label and the other with a NO, in front of their stand and asked customers, “Should we give up our jobs to make these smoothies?” Because customers filled up the YES bin, they launched their smoothie company, Innocent. They offer these recommendations to anyone who wants to start a business:

  • Ask what need isn’t being met.
  • Know your target audience – which could be you.
  • “Think better, not different.” Improve existing products – don’t start from scratch.
  • If you can’t explain it to your granny, it’s too complicated.
  • “Keep the main thing the main thing.” Everything you do should support your main idea. Stay focused.

“Keep On Keepin’ On”

After quitting their full-time jobs, Reed, Balon and Wright needed to mass-produce smoothies. Balon asked friends at Virgin Cola how to make drinks commercially. They told him to work with a “flavor house,” a company that finds ingredients and develops drinks. They started testing smoothie recipes with a recommended flavor house.

“When it comes to recruitment, if you act in haste, you repent at leisure.”

Reed, Balon and Wright visited 10 stores with their strawberry and banana smoothies. Most managers were happy to try the drinks. Six out of 10 wanted to buy the smoothies and were upset when they learned the product wasn’t ready yet. Back at the flavor house, the experts wanted to use concentrated orange juice. That ended the relationship.

“We will always back the person who has tried something and failed over the person who never tried anything new in the first place.”

It took a long time to find an appropriate manufacturer. Every company said that making smoothies that would have sufficient shelf life required using concentrates and preservatives. Reed, Balon and Wright remained adamant about their fresh, natural business model.

One of their last leads recommended that they talk to Mike, a Jamaican man in Wales who imported fresh oranges. Mike agreed to try their recipes. “That long, drawn-out search to find a manufacturing partner” taught the founders that “success is about resilience.” They had allocated a month for finding a manufacturing partner. It took nine months, and they nearly went bankrupt.

“It’s a universal truth about business that irrespective of what your company does, you’re going to spend most of your time dealing with people – their hopes, issues, talents and pay demands.”

Now the founders needed an investor. They lacked experience, a product, a name or funding, but had a great business plan. No banks would loan them money. After 20 banks turned them down, they tried venture capital firms. The firms all said no, but suggested that the three partners try to find a private investor. Not knowing any wealthy people, they “sent out a cheeky email with the subject line, “Does anyone know anyone rich?” They emailed the message to every address they had or could scrounge. Basically, they “spammed London.”

“However smart we think we are, however much success our business has, we are in the hands of those people, and it pays well for us to shut up and listen to what they have to say.”

This gave them two possible leads, one of which led to Maurice Pinto. Just as Reed, Balon and Wright were on the verge of quitting, Pinto said yes. He agreed to put in £50,000 of the £250,000 they needed, and said that five of his friends, also investors, would kick in the rest. When they all passed on the deal, Pinto had to back out or pay it all himself. Pinto now says that putting up the money was the best investment he ever made.

Marketing

Reed, Balon and Wright looked up “innocent” in a thesaurus. It was a synonym for “natural,” “healthy” and “pure.” They wanted a cool name that symbolized their mission and looked good on a T-shirt. Packaging sells a product to first-time buyers; taste and experience come next. When Innocent debuted, most fruit juices in the UK were packaged in opaque plastic bottles bearing pictures of fruit. Innocent chose a transparent bottle and worked with the design agency Deepend to create a label. The result was a face with two eyes and a loose halo, suggesting innocence.

“We talk to each other and our consumers in the way we talk to our friends (minus the swear words).”

For low-cost marketing, try to be visible in the right places, get good press, and use digital marketing and advertising. The founders learned, “when it comes to marketing your brand, everything is important, although some things are more important than others.” When launching in a new market, Innocent seeks “beacon outlets” – shops that share its values and customers. Its goal was being sold at Planet Organic and Wild Oats, London’s leading whole-food stores.

“The best way of testing something is to do it. Don’t get lost in academic research – make it, test it, see what happens.”

To try to get free publicity, notice which reporters cover brands and businesses in your local paper or on TV news, and call them. Journalists seek unique businesses, like Innocent. One story about the company, “Boys just want to have fun” appeared in the May 27, 1999, Lifestyle section of the Evening Standard. That led to Innocent going on sale at the Harvey Nichols food hall, a business that initially had turned down the smoothies.

“Keep asking questions; try different solutions; and above all else, don’t ever, ever give in.”

To make the most of digital media, Innocent has a website, a blog, a weekly e-newsletter with 120,000 subscribers, videos on YouTube, a Facebook page, a Twitter account, and more. Its first TV ad, which ran in 2005, was simple and inexpensive. It featured fruit disappearing into a carton and it cost less than £5,000. This ad became Innocent’s most successful advertisement.

Handling Growth

The most important things for a start-up are having a good business plan, starting small and persisting. The next is figuring out how to handle growth. Entrepreneurs often have to decide whether to outsource some aspects of creating their product or do it in-house.

“Development and change are good. The opposite is stagnation, and stagnant people smell like ponds, so we like to have people continually raise their game.”

The founders thought they’d have to create a factory, because nobody was making smoothies without added ingredients. But running a factory wasn’t among their skills, and setting it up would take a lot of money they didn’t have. Finding manufacturing partners allowed them to focus on what they did best: testing recipes and responding to customers. They never outsourced the process of creating their own recipes and selecting the best fruits and vegetables.

“If necessity is the mother of invention, then a tight budget is the father of doing stuff on the cheap.”

As Innocent grew, it continued “to ‘start small’ with each new initiative,” from opening up in a new nation, trying a new ad campaign or testing a new product. Its first market outside of England was Ireland, which the founders selected because it was close to home and offered no language barriers. Ireland is now their second biggest market after the UK.

“We now judge decisions, ideas and our choice of words against whether they feel ‘innocent’ or not.”

A few years after Innocent’s launch, business was booming in England, Ireland and France. The trio debated about whether to expand into other countries or into different product categories, such as frozen smoothie desserts and natural cereal bars. They decided to stick with smoothies and focus on international expansion. They debated whether to expand in Europe or the United States. The US had no language barrier, a huge population and a single currency. Europe had many countries with different languages, customs and currencies. But Europe was nearby. Innocent worked with perishable fresh produce – and in Europe, its distributors could get to 15 different countries in a 24-hour drive.

Defining Your Values

You have to answer the “why” question before starting your own business. What’s your reason for existing? After seven years, Reed, Balon and Wright decided to think about Innocent’s purpose. They gathered input from their employees. They settled on the idea that Innocent’s main purpose was to “make food good.” Then they defined their mission more specifically as:

  • Make food that is delicious because it’s natural and unprocessed.
  • Make healthy food using only ingredients that are good for people and will help them live longer.
  • The food should be sustainable, environmentally friendly and ethically sourced.
“Perhaps the most embarrassing was launching with the proud claim of ‘pas des préservatifs,’ which we thought meant, ‘no preservatives,’ but in France translated as ‘condom-free.’”

If making money is your only purpose in business, things can go downhill quickly. “Decent values prevent businesses, in their pursuit of profit, from behaving like idiots.”

“It’s All About the People”

Reed, Balon and Wright knew each other’s strengths and weaknesses. Reed became marketing director, Wright took on operations and Balon sales. They follow some unwritten ground rules. They don’t talk shop after hours, they hold each other accountable and they meet once a week to make sure they’re all rowing in the same direction.

As your company grows, hiring will demand more and more time. Innocent follows Google’s hiring example. Innocent has about 250 people, but one of its three founders signs off on every hire. This slows the process, but it helps avoid mistakes. Innocent people should share the company’s values and have the right capabilities and experience.

In terms of recruiting, Reed, Balon and Wright are always out promoting the brand – at trade shows, dinner parties, in press meetings, and more. The company puts job openings on its bottle labels and offers an internal recruitment reward of £2,000 to £5,000. Once Innocent hires the right people, it works to keep them with these retention strategies:

  • Make your expectations clear, give constant feedback and keep communication flowing.
  • Have performance objectives and measure performance.
  • Provide learning opportunities for personal growth and development.
  • “Share the proceeds” and add perks, the “soft stuff.”

Innocent retains employees by providing professional development and a generous compensation package, communicating transparently, and offering perks like free breakfast, yoga on Wednesdays and a variety of clubs. The Innocent cheese club is the most popular. In Innocent’s first few years of business, it had a 100% retention rate, but any healthy business will have some turnover as people’s circumstances change and they pursue other opportunities. Some new hires will not be a good match. You can turn low performance around, but you’ll face serious problems if your employees don’t match your values.

Listening

Innocent loves its “consumers. Without them,” the founders say, they’d have “just a very expensive hobby and a large pile of fruit out the back.” The founders would prefer to listen to customers in person over a pot of tea, but they settle for online communication. Innocent reaches out to customers through events like Fruitstock and the Village Fete. It also keeps in touch via a weekly newsletter and blog. The website features a “rate and review” section where clients can rate its recipes. Innocent launched its Veg Pots in 2008 for vegetarians and vegans. When vegans complained because some Veg Pots contained honey, Innocent created honey-free alternatives.

Customers can still reach the company by phone. Innocent’s first office in Ladbroke Grove used a dime store phone. People would answer it, “‘Hello, Innocent banana phone,’ because the phone looked like a banana.” That’s still the company’s customer service greeting in Fruit Towers, though the original banana phone is gone.

About the Author

Richard Reed, Adam Balon and Jon Wright started Innocent, which they sold to Coca-Cola in 2013. Reed wrote this book with Dan Germain, Innocent’s group head of brand.

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