Rapid Response: How to scale tech responsibly, with former Google ad chief and Neeva founder Sridhar Ramaswamy

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I think we are at a pivotal moment. In tech history. This is a decade of reckoning. Far tech. I came to the realization that Google had manifest destiny over all information.

I found it a terrifying prospect. We created a product which is an ads free private subscription search engine. This is not a science experiment. This is not really about uprooting Google, this is much more about showing that with a different model you can create a better product. I think very large companies that begin to rival the size of governments.

are just hugely problematic because companies by definition Odd autocrat. with scale the bought for better decision making. is really really important. The problem that most startups have.

Is No one cares. And so iterating quickly. to find the product market, being nimble, taking sharks. You don't want your system to crash and burn.

And that is something that we've been very, very conscious about. I'm a deck off. But we all need to be conscious. of the good and the bad. That can happen with tech.

And we need to try harder. at creating just a more equitable society, country, and hopefully world. That's Sridhar Ramaswamy, the CEO of Neva, a new subscription based search engine. Sridar used to run Google's huge and lucrative advertising business, but now he's trying to prove that his old place is doing things the wrong way. I'm Bob Safian, former editor of Fast Company, founder of the Flux Group, and host of Masters of Scale Rapid Response.

I wanted to talk to Sridhar because he's become an outspoken critic of big tech companies, even as he remains a champion of tech itself. He's had a front row seat in how big tech truly operates, and his insider stories and perspective on responsible scaling are eye opening, from Google to Facebook. He's also got great lessons about what it takes for smaller businesses to compete against the big platforms. He admits that running a startup is harder than he'd imagined when he was at Google, but by walking what he calls the very thin line between optimism and delusion, he says we can deliver positive impact that really makes a difference for the economy and the world. I'm Bob Safian and I'm here with Sridhar Ramaswamy, the founder and CEO of Neva and former head of ads at

Google. Sredar, thanks for joining us. Bob, super excited to be here. So what you're doing at Niva is fascinating to create An ad free private search engine not built around personal data.

It's even more so because You personally were at the heart of the Goliath of ad based Search, you know, overseeing Google's hundred billion dollar plus ad business. And it seems like

You had to have a conversion, a spiritual experience, I don't know to swap from one side of this to the other. Where did this come from? Yeah, some things are a slow realization. I join Google. believe it or not, in two thousand and three as an individual software engineer. I was very lucky.

to join the search ads team, which as you know has become one of the largest businesses ever in human history. just that team makes over a hundred billion. And early on, Google and the team were kind of embarrassed by how much money they made. They were like, ah, it's a lot of money.

Google prided itself as a search company. And so running ads to make money was always like, I guess we have to do this. But You know, ten plus years is a long time. And so there is always the pressure to make more revenue, you know? We all want to be growth companies. And so we made a series of decisions.

that increased outload. That tilted the field slowly and surely. towards becoming more advertiser focused. And there are sort of really interesting changes that happened on the organic side. People will be surprised to know that live.com, which then became Bing, had better image search in the beginning than Google.

But Google of course caught up using the power. off the platform. And the same thing repeated itself in flights in local. I came to the realization along the way But Google honestly as a company

felt that it had manifest destiny over all information. It wanted to be the ultimate arbiter. off information. I put the two together. At some point my head exploded.

I said I am looking forward to a world In which If I ask a commercial query, that search page is pretty much only going to have ads. I ask a non commercial query. Google, the company

Was going to tell you what the truth. was going to be. I found it a terrifying prospect and remember in between We will also establish ninety plus percent market share. And the combination of all of these made me think, I don't want to be a part of this. I need to reset.

I need to think about what I want to do. Played around to two or three ideas. I wanna create a product that my mom will use or my kids. The product that was going to be committed to one true North Star. as the company grew.

And that's why we created Niva, which is an ads free private subscription search engine. It is the best way in our opinion to align What our customers and users want with what the company wants. And so it's a two year experiment. And so the idea is that if

Your unshackled from the demands of advertising or unshackled from the need to Extract data from me. That the results I'm gonna get back are gonna be Different, gonna be better.

Oh, one hundred percent. That's the magic of giving up on big assumptions and starting over. Let's start with the obvious. Not having to show ads is like a nice benefit. So the top result Is An organic result.

The search engine now thinks about How it can put you in control. How it can serve you. So the kind of things that we do

Or we let you customize the search. We all have our favorite subscriptions, for example, of newspapers that we actually pay for, and when we search for things, all things being equal. You can prioritize those. Pl of people have asked us for Hey, when I look for a product, I do not want to see big box retailers. I just want to see small retailers because those are the ones that I want to support.

You know what? A commercial search engine has no hope of doing any such thing because it is going to show the ad from the biggest merchant that is out there. By the way, it's called Amazon. Up there on top. And that's how a commercial search engine operates. On the other hand, we are working on features. There you can get smaller retailers out there. More and more the product

is attuned to what does the user want? I'll give you another simple example. If you now search for a medical query on Niva, We give you a We call them facets, they're just literally chips on top.

That'll tell you, hey, you just want to look at government websites. No problem. Tap on that. We will filter out everything else. Or do you want to look Uh I'd supported websites.

If you want, you can do that as well. Again, this puts you in charge. It turns out that the entirety of the internet, it's not just Google. has been running on this ad supported model. And more and more. It's very hard to tell what is real information from an authority

Free. of the constraints of showing ads and supporting that model, we go all into How do we support you? How do we give you privacy? How do we give you agency over how you get to information? That's the part that excites us the most.

You described this initially as a two year experiment, and I'm curious. How much of this is about setting an example So that maybe the business moves in a broader sense in a different direction versus really expecting that you're going to be able to unseat Google with Their tremendous market power and penetration and resources.

Great question. This is not a science experiment. If I wanted to do a science experiment, I'd have set it up as a nonprofit and been clear about it from the beginning. We want this to be a successful company. And here's the magic. of subscription businesses. They create a very predictable revenue stream.

And with a Far. smaller fraction of market share. And there are tons of examples like this.

The Ultimate. subscription company finally. His Costco. It turns out that Costco doesn't actually make a whole lot of money on the products that they sell you.

Most of their profit. Comes from the yearly membership fees that you pay, and they have a 91% retention rate. People renew their Costco memberships because they like Costco. So with something like a one percent market share. which is very small and would be considered a failure anywhere else, we can actually be an enormously successful SAS subscription company

And subscription companies are also valued. On revenue. while ads companies are valued on ebida. So if you look at the enterprise value of let's say companies like a Walmart. you will find that they are valued at a fairly constant percent.

Off Ebada. kind of like the net revenue that they make, while subscription companies are valued more. at a multiple of their top line revenue. That just speaks to the power of the model. My point here is this is not really about uprooting Google. This is much more about showing that with a different model you can create a better product and still create a successful company. Even if the market share is not that big. I know there is other change that you hope happens in the world of technology. In recent years and particularly since the pandemic, we've seen the large tech platforms become

Even larger, even more dominant. And you've Expressed some opinions that change is necessary. What does responsible scaling look like for a tech company? First and foremost Working in tech.

People like me. How the Opportunity to touch the lives of many, many, many people. And companies when they start.

Start out with simple principles. But the world is more nuanced. More complicated. And has a combination of wonderful people

Great people. And not so good people. We used to be very proud of the fact that on YouTube You could express yourself. That was the motto. And then we would tell people, anyone on the planet can upload a video into YouTube and get it watch by lots of people.

Sounds really cool. And then you realise wait. Like you mean. Everyone on the planet. Can be on YouTube.

That's a thing. And so to me Especially as a company gains scale. I would not do it too early. It's sort of silly. for Neva to worry about the entire suite of all of these problems that can come on because

We don't have that many users, we have to be successful first. But With scale the part for better decision making. is really, really important.

that companies need to have, which is that as they scale, as they become important platforms, There's societal responsibilities. are just as important. It cannot be the case that decisions are solely made With the purpose of driving one metric.

Call it attention, call it engagement, call it revenue. The world is a complex place. And leadership needs to evolve. As we go along. As you know, computer scientists as a country, honestly, we like to simplify things. It's like be as rich as you can be. Your company should be as large as it can be. Why stop at a trillion? Let's go to five trillion.

But I think we need to understand That there is more and more responsibility that comes as companies grow. And I think a lot of tech companies really honestly have trouble figuring these kinds of things out. As you're talking, I'm thinking about the recent Wall Street Journal series about Facebook, right? And its sort of inability to control its own platform and the ramifications, just devastating.

What's your reaction to those allegations to that? Are you surprised? I think there are a set of people that react with What, you're surprised by this? And at some level you have to give Facebook credit for even allowing these studies to go forward. There are quite a few companies that would be like uh don't look.

Because if you look I have to like deal with what you found. They had the wisdom, the guts to have these kinds of studies go forward. But time and time again, what we are also finding out Is that

When it comes to balancing Engagement. versus virality. versus revenue Generally it's all towards engagement and revenue.

Things like what is the impact. Especially long term impact. because they are hard to measure not given a lot of importance.

Here's how like a typical meeting for something like this will go. I've been in a bunch of these. Okay, team comes in. They say oh. We think

We have the following unintended effect because of this feature. We can't quite measure it and confirm for sure what the long term effect is going to be. We can give up two percent of revenue. In one of these metrics. That we think

should go up. Let's call it like a happiness proxy metric. Can go up. So for giving up two percent of revenue, you can raise this other thing by quarter percent. Okay.

So an exec dealing with a question like this can say Okay, is this the best you can do? How long have you worked on this? Prove to me beyond an iota of doubt. That you can do better than this. It's a perfectly logical question with a perfectly predictable outcome, which is this thing never launches.

Because no scientist worth the salt will be able to tell you I can guarantee that we cannot do better. Okay, they're going to say, Fine, we'll go work some more. Or they'll get frustrated and quit, as a bunch of Facebook people have done. And so this is where leadership again plays a crucial role.

In understanding what the trade offs are. In saying these are good trade offs to make. and then sticking their neck out and actually making the change. I'll point to one example from my own career. the topic of Hornads and search. No one really wants to talk about a topic like this.

What porn adds represent. is the next level. It's like the Unimaginable things. that people are actually willing to pay money to run ads for.

Was there a way to prove that this made humanity better this change? Of course not. And yet The leadership at the time We bought into a qualitative argument.

And so we walked away from, you know, this is like nine digit revenue. I absolutely think it was the right call to make for Google then, for Google now. So these decisions But I think it behooves leadership.

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Wherever you get your podcasts. Humans will never be more intelligent than AI. There can be two types of companies. Those were great at AI and those that went out of business because they weren't. How do we build a future? That is human centered.

I'm Rana El Calyubi. And on my podcast Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur, and investor, I know what it takes to build AI that works for everyone. Every week, I sit down with the pioneers shaping our future. And we take you behind the scenes of the AI that's transforming our lives. Find pioneers of AI wherever you tune in. Before the break, we heard Niva CEO Sri Daramaswamy talk about responsible scaling, the downside of Google search, and the limitations faced by platforms like Facebook.

Now he gives us detailed examples of how best to compete against the Goliath, the humbling nature of startup ambition, and the thin line between optimism and delusion. Plus why he believes this is a pivotal moment in tech history. So I wanna ask you, you've argued that some of these big tech platforms have become monopolistic, that in some ways they're too big, that You know, Google Cloud and AWS need to be separated from the motherships. Is that connected to this issue of sort of Tech responsibility

Or is it about competitiveness or is it a little bit of both? That is actually a larger topic. I think tech responsibility needs to apply. At several scales. What I mean by that. is I think by the time

A company gets to be like even ten hundred billion dollar market cap. I think responsibility issues come into play because you're affecting significant numbers of people, hundreds of millions of people. I would say it starts there. My different point would be

that by the time the market cap of companies. Begin to rival. Die of T. Entire GDP.

Of the country. I think it's just very problematic for society. Companies Exist to further themselves. A company only thinks what is right F

me the entity which means employees and shareholders. The current crop of companies are not in the business. Of making democracy better for you and me. So I think very large companies that begin to rival the size of governments

are just hugely problematic because companies by definition Or autocratic. Dave report up to a single person. I'm not saying anything fancy here. And so to me that is the reason. Why? Competition law exists. That's the point of the Sherman Act.

where we say we don't want very large things to exist. Now this will sound like anti free market. But you know, the free market only goes so far. And as I said, a country run by a company It's gonna be a pretty terrible place. And I think that's where our government needs to step in. The biggest worry that I have with NIVA.

is not that we cannot create a great product. We will absolutely create a great product. But getting it in front of people. Getting things. Like that.

Priced. Search option position on the browsers. is the part that is hard. All the defaults are locked up. All the doors are shut. So I think we need to understand.

that large monopolies Will both try to extend their monopoly. And preserve. what they are good at. Lots of folks listening may be at businesses small startups bigger also that are competing with these big platforms with Google or Amazon, Apple, Microsoft, what have you.

Do you have any advice for them in that competition? I mean, you know what advantages you had at Google that you may not have now. Like are there insights you can offer us about how to Think about that competition in a way that can Turn to your advantage? I mean one of the reasons why we picked

The principles for Neva. Was so that We would both distinguish ourselves from how Google search operated. Obviously. But

Also We're going to make it really hard for Google to copy And so If you're first of all competing head on. with someone who's really good at something.

is not something that I would recommend to Anyway. It's just really, really hard. We're very clear. that we are for the people

Die. care about search, that want to have agency over it, that care about privacy, and yes, are willing to tolerate the fact that we have to catch up on quality in a few areas, even though we are much better in other areas. It's that segment. That likes us. That is going to help us grow. So if you're competing

Hopefully you're competing not in an area that they are directly involved in. And that gives you a certain amount of space. Having these distinguishing factors and making sure that you're not in the center lane. Of where they are operating. are the kinds of things that can be helpful.

And the other thing is even if the big companies were to announce that they'd be interested in something. They get bored very quickly. If things don't reach big size very quickly. If you're outside Google. You cannot tell whether Google has two thousand people working on a project or two people working on a project. It all sounds the same outside.

And so just doing an amount of intelligence to try and figure out what is actually going on will be helpful. operating a team as part of a big organization versus a startup. Is that leadership challenge Different Is it the same, but you're just applying it in a different place? H how do you think about that part of it?

Yeah, it's one of the most humbling experiences that I have been through. I think when you're operating a startup A lot of the advantages, the incredible attention. that you get if you're part of a Google or Microsoft Facebook. You just don't get any of that. You really have to hustle.

For attention. And you also have to be very picky. About what it is that you work on. And progress is slow. If you're working with like a five hundred percent team, stuff happens.

Guess there is fiction, but Things happen. On the other hand, if you have a ten percent startup That's like a whole different story in terms of how prioritize that you have to be

The problem that most startups have is No one cares. And so iterating quickly to find the product market fit, being nimble, taking shortcuts. You don't want your system to crash and burn.

But I would say especially people from big companies will overplant things when they move to startups. And that is something that we've been very, very, very conscious about. Well it sounds like if you're talking about this running this business It's harder than you thought it was gonna be. I mean you knew it was gonna be hard, but Harder than you thought?

It's terrifying. There are great days in which you're like we can move on a dime. We can release stuff very quickly. And people care. That's like the stunning part, you know, I'm at a conference today.

And the host of the conference says in public. Oh. I am a big Niva fan. And just like that one moment is going to keep me going for a week or two. But then on the other hand, you know, my marketing team is two people.

Creating companies is hard. I'm really glad that I did it, but one hundred percent. Way harder than I thought. You have to find those moments of optimism to keep your energy up because it's not coming at you all the time that way. you have to stay optimistic. I think that is an important characteristic all startup founders have. They have this maniacal belief. That things will

War caught. And completely transparently with some founders, including myself, I got like Hm. I wonder where the line is there between being optimistic and being delusional.

I never drink too much Kool Aid. You have to walk that very thin line. between optimism and delusion. I wanna bring you back to the overarching Framework of what's going on in the tech world that you talked about. The tech industry has been

So central to the economy, to progress, to our ability to weather the pandemic and remain productive. New breakthroughs continue to roll out. But there are these other challenges at the same time. Given all that. What's at stake in this moment. I think we are at a pivotal moment.

in tech history. I think we have gone through twenty now twenty five years. of essentially unchallenge tech growth and influence in our economy. and society.

In many ways. I think this is the decade. Where tech is going to be spoken off. In the same way. That I don't know, plastics?

Petroleum? We're spoken of before. Hopefully not cigarettes. But I think this is a decade of reckoning. Far tech.

I think it's also equally important to understand But While Tech has benefited us in significant ways. I think it's also a system.

That Primarily benefits tech. The big three tech players in the US or a tax collector for every new relationship. Between

Mm. Potential customer. and a potential merchant. What I mean is one of those connections usually goes through a Google, a Facebook.

And Amazon. And if you add up just the ads revenues of these companies. It'll come out to several hundred dollars per person. And so I think we also created a situation in which they're essentially like this alternate government levying toll on the world.

I am tech positive. I think tech can do good things, but I'm also a realist. Which is that Heck can also be used for bad things. Do you think government is getting

more sophisticated about its understanding of what's happening and the way tech works. I guess my experience has sort of been that like government is always behind and Even when tech executives are called to testify in Washington, it's almost like they are instructing folks about something that maybe you wish they knew beforehand. In in Silicon Valley, there's a certainly Deep sophistication. Do you see that sophistication growing in other places?

I don't think Senators and Congresspeople should be in the business of talking to tech execs. You need a specialist agency. There's a reason the FTA exists. FDA approves drugs. Congress doesn't approve drugs. Similarly, the FTC exists. We also have the FAA for the airline industry. You need a bunch of professionals.

We have a ton of examples for how this is done. This is not a new problem. Well, this has been fascinating, Sridhar, as always talking to you and I appreciate your candor. As I was saying earlier, I'm a tech optimist. I think there's lots of stuff. that that is to be invented. Both my children are computer scientists And I'm happy that they're computer scientists for the simple reason that I think this is a very young science. Lots of things are still changing. There's lots of cool stuff still.

But I do think that we all need to be conscious Of the good and the bad That can happen with tech.

And we need to try harder. at creating just a more equitable society, country, and hopefully world. Yeah, well thank you so much for doing this, Ridar. Thank you, Bob. This was fun. Hey listeners, Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show because every Friday we release a second Rapid Response exclusively in the Rapid Response feed. The guests and topics are just as compelling and timely for

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