Google (NASDAQ: GOOGL) has found an answer to an employee’s desire to start their own business. With their brand new incubator, Area 120, the American multinational tech company is set to help nurture entrepreneurial talent within the company.
Area 120 to drive innovation, encourage new ideas
Area 120 is an in-house incubator just announced by Google to encourage in-house talent and innovation. Employees with ideas for new businesses will have to team up and submit their plans as an application to be a part of Area 120. Those selected will get the opportunity to work on their business ideas full time for a few months.
Depending on how things go, they will have the chance to pitch to Google to secure additional funding and to set up their own separate company. Google will be a major investor in the new company. Google execs Bradley Horowitz and Don Harrison will lead the initiative.
Google’s builds on “20% time” philosophy
The incubator draws on Google’s “20% time” line. The phrase first surfaced in 2004 when founders Larry Page and Sergey Brin in their IPO letter said that they would encourage employees to spend about 20 percent of their working hours on innovations that would benefit Google. This time was to be separate from their regular projects and was seen by Page and Brin as a means to giving people the opportunity and backing to be creative as well as innovative. This philosophy turned out to be a big win for the innovative tech company, resulting in some of Google's most successful extensions, including email platform Gmail, AdSense, as well as news service Google News.
This marks a first in the industry, where a company goes beyond just backing innovation or funding startups by their employees, to setting up a dedicated division to incubate such ventures.
Smart retention strategy?
Some industry experts believe that this is a clever move by Google to help retain employees who might otherwise have left to start their own new ventures. Of late some questions have been raised over whether Google’s 20% policy is actually in evidence any more or whether that culture has died.
This move should help bring back the company’s focus and commitment to helping employee initiated ventures thrive. While introducing Alphabet in 2015, Page had said that they were looking to empower brilliant entrepreneurs and help companies flourish even if it was not within the core Google environment.
Initiatives like Area 120 could also help make the company seem like a more favorable choice over competitors like Facebook and Apple. Whether this pays off, and whether Area 120 is as much of a success as the “20% time” initiative when it was first launched, only time will tell.