The Future of Search: A Conversation with Sridhar Ramaswamy, CEO and Co-founder of Neeva and a Venture Partner at Greylock.

The Future of Search: A Conversation with Sridhar Ramaswamy, CEO and Co-founder of Neeva and a Venture Partner at Greylock.

Sridhar Ramaswamy is CEO and Co-founder of Neeva and a Venture Partner at Greylock Partners.

Neeva is search re-imagined. It is subscription based and does not sell ads or track user behaviour as a part of its business model. Neeva is focused on finding exactly what matters most for its customers, whether it’s on the web, or buried in personal files like emails or other documents.

Prior to founding Neeva, Sridhar oversaw all of Google’s Advertising products, which included search, display and video advertising, analytics, shopping, payments, and travel. He joined Google as an engineer in 2003 and was an integral part of the growth of AdWords and Google’s advertising business. Before that, Sridhar was a Director of Engineering for the analytics platform at E.piphany. He also held research positions at Bell Labs, Lucent Technologies, and Bell Communications Research (Bellcore).

In this exclusive interview, I speak to Sridhar Ramaswamy (CEO & Co-Founder of Neeva) about his learnings from running Google’s $115 billion advertising arm, why our model of search is broken and how he’s fixing it.

Q: Why did the search market consolidate?

[Sridhar Ramaswamy]: When Google first started, the reaction that a lot of people had was, ‘what? Why do we need another search engine?!’ and people have had the same reaction about Neeva! Google started with an insight that there was going to be too much information on the internet, and that if we thought about quality differently- it would be a huge boost. This was the insight that created the fabled PageRank, and in some ways was the start of the journey to create a better product. It’s equally important to remember that Google became a meaningful, substantial and then dominant player not just on the back of having a great product, but because of a whole set of incredibly shrewd business moves that the company made- everything from powering search for Yahoo!, to their early deal with AOL (which brought a very influential community of users to Google) and smart deals with PC manufacturers such as the Dells and Compaqs of this world which made Google the default search engine for many users.

Q: How did the advertising model create the opportunity for Google to scale?

[Sridhar Ramaswamy]: I don’t think anyone really predicted the power of Google’s advertising model back in 2002. It’s a model that favours larger businesses as the network effects are incredibly strong. As Google got stronger in search, it was able to attract more advertisers to optimise for Adwords. It was able to get more publishers to focus on making sure their content was well-indexed, and my team added the features to Adwords to define how search advertising should work and thus- how to optimise search and advertising to work well for each other. For the longest time, the RPM gap, the amount (on average) of money made on queries on Google versus Bing showed that there was a huge difference [in Google’s favour] giving a market-leader effect, further widening the gap, and creating a positive feedback loop.

Q: How did your time at Google influence the creation of Neeva?

[Sridhar Ramaswamy]: I will always gratefully acknowledge the incredible opportunities I got at Google. Some of it was the company, but there are also incredible people like Eric Schmidt, Larry Page, Alan Eustace, Jeff Huber (who was my first boss) and Bill Campbell. I often joke that they gave me opportunities that I truly was not deserving of. When people ask what prepares you to run a $100 billion business unit, I tell them nothing can prepare you. It’s just that someone trusts you can do it.

Having said that… 15 years is a long time at one place, and whilst I was very much a part of how the ads-ecosystem evolved, I didn’t like the rampant tracking and the fact that Google and Facebook effectively ran some of the largest information gathering networks on earth (and that’s a very charitable way of describing it).

I also felt strongly that search- as a product- was just going to continue to face more and more revenue pressure, forcing us to show more and more ads, and inevitably making the product worse over time. Fundamentally I realised that the advertising model simply was not right, and that we needed a better product with respect to search.

Q:  What is the value proposition of Neeva?

[Sridhar Ramaswamy]: The origins of Neeva sit with the fact that in the long-term there is no way to reconcile the conflict of interest between serving the user and the advertiser.

When a user makes a search query, the ad supported model relies on the physical scanning order and differential attention. There’s a reason why TV ads get a little bit louder than the program they came from… there’s a reason why Facebook ads tend to be videos and images, not text… similarly on search, you are forced to scan through the ads before you get to the results – and herein lies the conflict, do you serve the user who wants to get to the results? Or the advertiser who wants to get to the user?

The core principle of Neeva is that we want to be a customer first product and being ad-free and private are two important, but independent ways of achieving that. Without the immediate pressure to show ads, we are able to create a better experience giving you high quality organic results straight away but we can then layer personalisation on top meaning that with your permission and with full transparency, your personal data can be used to serve you a better product- and not for any other reason.

By putting the user first, it also allows a whole range of search optimisations which simply are not possible with the current advertising model. For example, on product searches a lot of our users are telling us that while they love us being ad-free, the top results are still dominated by the large retailers who have the capital to optimise their websites for search. A lot of users want to see smaller retailers, or stores that source ethically- that’s not possible for ad supported commercial search engines, but these are the kind of features that we can build in. If we don’t make you happy, we don’t make money, and that’s the very direct tie-in we have with the user.

We think the predictable subscription model will also be a powerful attractor for investors. The predictability of revenue also gives scale economics differently to the ad model. Advertising is about more volume tomorrow whereas subscription is about more value today. Think about Netflix, they think very differently in terms of cultivating niche audiences and keeping them loyal to the platform. We may discover that we need a great piece of marketplace functionality to acquire and retain half a million users. When they’re already paying money to you, and demand a feature, your incentives change and you can gain traction with them.

Q: How does human centred search differ from the incumbent business model?

[Sridhar Ramaswamy]: One of the most important and innovative aspects of Neeva is the starting assumption of being customer first. It turns upside down the notion of what a search engine should be, and that’s really exciting. Search started as a free product meaning it cannot get any less expensive for the user. You pay nothing, but the benefits of reaching larger and larger portions of humanity accrue to the provider, not to you. Google spends roughly the same amount of money on search as it did a decade ago but makes vastly more returns on that investment. Those returns however don’t’ come to you and me.

A customer-first model is much more economically aligned with the long-term interests of the user. For example, we would happily show you review sites as readily as retailers- why? We don’t benefit more from you buying the product so we can create the user experience you need. If you want to buy? Fine… if you want to learn about a product? That’s perfectly fine too. If you want to buy the product sometime in the future, and want to set a price alert? That’s fine too! Our goal is to serve you.

Technology and scale helping customers in this very direct way is what fuels our model. As we get scale, we will either add more features to search, or lower the cost. All the economic innovation we take for granted- the computer, the microwave- all started off as things that only rich people could afford and got cheaper over time.

Q: How will you persuade people to pay for a product that has been free for so long?

[Sridhar Ramaswamy]: By delivering value to the customer, we will give them agency. This is a product that is actually designed for them and meant for them.

One of the things that is a little surprising for people in technology is that the population are very savvy- they have a high level of understanding of what is and isn’t an ad, what is and isn’t aligned with them. People absolutely know how many ads that are on top of Google searches.  There’s definitely a willingness on the part of the population to try alternatives- some research shows that 20-30% of the population would be happy to try a different search engine.

Ultimately, we have to deliver more value. That value has to be more than just being ad-free – we have to deliver personalisation… we have to put the customer in control. Price of course, matters – and we’re hoping to price the product somewhere between $5-8 per month, making it affordable for a lot of people – especially when you consider that search is a product that people use all the time. We have thousands of users, who are using our search engine dozens of times a day – it’s something which becomes a repeat function in our lives, over and over again.

People literally type in what’s in their head, straight into search. I was talking to a friend about search being personal and she said, ‘Sridhar, yesterday I typed how to be a good mother to be a 3-year-old into my search, because my 3-year-old was crying and I didn’t know what to do…’ – that’s not information she was happy to track her across the internet, it’s personal! It is that kind of need that’s giving us the momentum to get going.

Q: Will we see a move towards new human centred models for news and other platforms?

[Sridhar Ramaswamy]: We have lots of long-term plans, and I tell my team that long-term plans don’t matter if you go bankrupt before you get there- so I really try to keep that in mind.

Relatively soon, we want to make sure that we have a publisher revenue share mechanism. Search is powerful because it’s one of the few natural aggregation points. Search is a supernatural aggregation point of intent because literally anything in your head is typed straight in. If we put a snippet from your site (for example, a great blog) into our search results because it creates a better user experience, we think it’s our duty to share a portion of revenue with you as a content creator.

Long-term, we think of search as a different way of funding content. We obviously need to be careful about who we associate with – but this allows us to support local newspapers, fund original content and more. It’s something we care passionately about.

I ran the Adsense team for a long time, it’s a brilliant team, but the fact is that Adsense- in an anonymous world, essentially devalued content so much that you can’t actually tell what original, great content is any more. We think a new subscription and paid-search model with identity built in from the start will be an interesting counterpoint to how people monetise information. Of course the big players such as the New York Times and Guardian will have their own subscriptions, but I think we should move to a world in which there’s one aggregation point that can feed the long tail of quality content plus subscriptions for where we feel we want to make a real commitment.

Q: What are the leadership learnings you took from Google, that you are applying to Neeva?

[Sridhar Ramaswamy]: The most important lesson for anyone wanting to transition from a successful role in a company to a start-up is to remember that the things that made you successful in a large company may be hindrances in making a start-up succeed. There are certain qualities that can help- but in a start-up you have to sweat the detail and be comfortable with uncertainty around your ability.

There are obviously things that you do learn in large businesses that you can take with you. How to identify great talent… how to motivate people… how to set product principles that can create a better future… how to create a culture that learns from the best and the worst experiences…

I tell my team that we don’t hire jerks. If you are brilliant but not a nice person, you will not get hired. I also tell my team that we need to be excellent. Not an engineering team, a product team, a sales team, but an excellent team that realises that all those functions contribute to everyone’s success.

On the other hand, getting users to pay, that’s done one at a time.  Wanting to pay $5 or not, making important decisions about whether they’re going to let that happen or not, there’s no other way than to sweat the details.

Q: What do you hope your legacy will be?

[Sridhar Ramaswamy]: In some ways, if you set yourself up to want to increase your trajectory from a monetary perspective, you set yourself up for trouble… you run into the innovator’s dilemma. As I was beginning the Neeva journey, a lot of close friends- people like Eric Schmidt- told me, ‘Sridhar, you shouldn’t do a start-up… there’s so much uncertainty!’ To me, taking risk and understanding that you might not have any impact is a humbling experience that makes you grow.

The legacy I already have built with the Google ads team is hard for me to beat. I joined as an engineer writing code for a living and built a team of 10,000 people making $120 billion in revenues. In some ways, aspiring to a bigger legacy than that is just too much pressure.

Having said that… if I could be thought of as somebody that thought differently around one of the most important functions in our life (finding information) and if I could create a product and business around that? I could wish for no more… I think that would be incredibly powerful.

I feel very fortunate that I even have the opportunity to think this big about a foundational problem of humanity.

 

Thought Economics

About the Author

Vikas Shah MBE DL is an entrepreneur, investor & philanthropist. He is CEO of Swiscot Group alongside being a venture-investor in a number of businesses internationally. He is a Non-Executive Board Member of the UK Government’s Department for Business, Energy & Industrial Strategy and a Non-Executive Director of the Solicitors Regulation Authority. Vikas was awarded an MBE for Services to Business and the Economy in Her Majesty the Queen’s 2018 New Year’s Honours List and in 2021 became a Deputy Lieutenant of the Greater Manchester Lieutenancy. He is an Honorary Professor of Business at The Alliance Business School, University of Manchester and Visiting Professors at the MIT Sloan Lisbon MBA.

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