Founder to Founder: The Guide to Building a Breakout Startup in the AI Age

Christina Cacioppo (CEO & Co-founder of Vanta) and Mario Gabriele (CEO & Founder of The Generalist) come together for a tactical deep-dive into what it truly takes to build a breakout startup. 

In a market evolving at breakneck speed, they share sharp insights and real-world strategies for staying ahead of the curve.

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Why Google gives Maps away free

Chess Move

The what: A TLDR explanation of the strategy

Back in the early 2000s, digital maps weren’t a pre-downloaded, free app on your phone.

They were a $500 single-purpose consumer hardware device.

Everything changed in 2005 when Google acquihired Australian startup Where 2 Technologies, a web-based mapping company which was quickly rebranded as ‘Google Maps’.

A no-cost mapping service, making previously premium features accessible to the masses:

• Interactive maps

• Satellite imagery

• Turn-by-turn navigation

Their strategy:

Leverage distribution from existing Google products, and incorporate non-intrusive monetisation of end-users (ads + API usage) whilst maintaining a best-in-class user experience.

By 2009, Google had become the market leader and de facto default choice for the digital maps category.

Today, Google Maps has over 1 billion users and generates ~$11B pa for Google, all while remaining free for the majority of its user base.

Breakdown

The how: The strategic playbook boiled down to 3x key takeaways

1. Offer a superior product, for free

When Google Maps was released, it immediately disrupted the GPS industry.

The market previously consisted of expensive hardware products, specialised for navigation, from companies like Garmin and TomTom.

Since Google Maps was free, it became the preferred choice for drivers, who no longer needed to pay for navigation.

Plus it was accessible on the device they already had in their pockets.

Building on rapidly improving smartphone technology, Google was able to produce a dramatically superior product experience, with a focus on UI and speed:

• Clean interface

• Powerful search

• Quick load times

• Interactive controls (drag-to-pan maps were unheard of in 2005)

They introduced new features to the market, like Street View (capturing panoramic photos along 10+ million miles of roads) and real-time traffic data in 2007.

Maps leveraged the same indexing infrastructure Google had spent years perfecting for Search.

This gave Maps an immediate advantage in comprehensively mapping locations and delivering relevant data.

With integrated public transit routes, local business information, and user-generated reviews/photos, users could easily find answers to a wide range of search use cases (hours, ratings, prices, directions, etc).

By making the product experience delightful, frictionless, and better – while also remaining free – Google Maps became the global default.

They won an estimated 88% of consumers who use Google Maps to find local businesses, versus 12% using Apple Maps.

2.  Win ubiquity through distribution

Google used every corner of its product ecosystem as a distribution engine for Maps, making it virtually impossible for users to avoid.

Search directly embedded map results.

Android devices came pre-installed with Maps (even iPhones relied on Google Maps until 2012).

Gmail detects location details for things like travel, restaurant bookings, car rentals etc.

Calendar events link out to Maps.

Docs embeds Maps previews when locations are pasted in.

Google even removed links to competing map services.

Separate from their consumer product, the Google Maps API allows developers to easily embed Maps on their own sites.

This turned millions of websites and apps into distribution (and downstream monetisation), whilst driving ecosystem dependency on Google's infrastructure.

Users didn't choose Google Maps; Google's ecosystem chose for them.

3. Monetise the ecosystem, not the user

Instead of charging end-users, Google Maps makes money by charging those who benefit from end-users.

A strategy carefully designed to not impede user growth.

(The same playbook as Search, Android, Chrome, Gmail, Drive, Play Store, and YouTube... which all have over 1 billion users).

As Maps became the go-to place to find nearby businesses, Google introduced ‘Sponsored’ listings and other paid placements letting businesses tap into their high-intent user base.

Google replicated its proven advertising playbook from Search into Maps.

Doing this allowed them to repurpose:

• Infrastructure

• Advertiser-facing UI

• Customer-base of advertisers

• Automated bidding functionality

and the long list other tools and features they’ve already built for Search.

Importantly, these ads generate revenue for Google without detracting much from UX, since the sponsored results still satisfy the user’s search intent.

Google also monetises Maps by charging developers for API usage.

After years of offering the Maps API at low or no cost to encourage widespread adoption, Google raised the fees once Maps had become the industry standard.

Companies that heavily rely on Google’s map data – rideshare apps (Uber, and previously Lyft), delivery services, real estate sites, logistics firms – pay usage fees to integrate Google Maps into their own applications.

By 2019, Google was generating “several billion dollars annually” from Google Maps.

Today, it's an $11B business line.

(All without ever directly charging its end-users!)

Rabbit Hole

The where: 3x high-signal resources to learn more

The untold story about the founding of Google Maps ↗

[5 minute read]

A deep dive into the Sydney garage where ‘Where 2 Technologies’ was born.

Favourite part: The secret whiteboard notes from negotiations with Larry Page in 2004.

Inside Google Street View: From Larry Page's Car to the Grand Canyon ↗

[12 minute read]

TechCrunch's behind-the-scenes coverage of the most ambitious mapping project ever attempted:

• How it started with a "Frankenstein-looking" van borrowed from Google's security team

• The Stanford research project that convinced Google to photograph every street in San Francisco

• Why Google’s obsession with collecting “as much data as possible” made Street View both revolutionary and controversial

The brutal UX battle: Why Apple Maps still can't beat Google ↗

[7 minute read]

Google's "breadth of data" advantage makes Apple Maps feel like it's "a decade behind".

This was a fascinating breakdown of a number of inimitable UX patterns throughout Google Maps that explain why iPhone users stick with Google despite loving Apple products.

That’s all for now, friends.

See you in the next letter.

— Tom Alder and Sheldon Bishop

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