Clarify

• Do we know which company owns that other product and how big that company is? Assume big enough company to matter to gmail.
• Do we know what that company’s core business is? No.
• Is the other email product an enterprise or consumer product? Consumer.
• Any idea about the value proposition of the other product? Assume standard email features.

Framework

• Understand Gmail, the business model, SWOT
• Understand who Gmail’s customers and what their needs and unmet needs are.
• Understand the competition.
  • Unknown competitor goes from FREE to $5 per month.
• Understand who gmail’s collaborators are
• Understand environmental factors
• Identify Google’s goal with Gmail.
• How to win it.

UNDERSTAND

• Product – Probably the highest used email service. Core part of Google’s offering. Feature rich.
• Business model – Gmail is mostly ad supported. Enterprise users pay for the gsuite.
• Strengths – Fast, reliable, trusted, feature rich, incredible search, spam filtering. Calendar.
• Weaknesses – spamlike ads, privacy perception.
• Opportunities – Enterprise market penetration, integrations to other google products.
• Threats – Messaging apps, Office bundling.
• Customers and unmet pain points.
  • Personal accounts (everyone)
    • Reduce spamlike ads.
    • Be able to unsubscribe from spam emails easily
    • Unified view of all google accounts.
    • Emails are boring. Make it interesting.
  • Business accounts (SMBs, goog enterprise users).
    • Integrations to different tools. Eg. Evernote, calendly.
    • Need a client.
• Competition
  • Unknown competitor goes from FREE to $5 per month. Assuming it has no ads.
  • MS outlook is a big competitor. Strength is being offered as part of office suite.
  • Yahoo is another. On its way out.
  • Teams and Slack. Taking share of communications from email. Quick and easy. More interesting.
• Understand environmental factors
  • Privacy regulations are increasingly strict. Could cause revenue loss to Google.

Identify Google’s goal with Gmail.

• Keep free user market share AND win the enterprise market.

Strategy

• Pricing
  • Offer tiers of gsuite. Offer a-la-carte for SMBs.
  • Don’t need to compete on the $5 price because Google is more well known. Instead compete on features and integrations.
  • Offer free for a year to get things started with startups.
• Product
  • Let enterprise admins configure the tools to integrate to.
  • Have an plugin store that users can install from.
  • Create a laptop client.
• Invest in sales and BD. Package up enterprise offerings including google cloud.

Metrics

• Enterprise accounts.

Follow up questions: 1- What service is competitor’s offering for $5/month? Is it general email service or elevated/customised service which Gmail doesn’t provide? 2- How long has it been launched? And have we seen any impact to our market share and are we losing consumer yet?

Let’s assume this is for a customised service which Gmail doesn’t have. and let’s assume it has been launching for a month and we saw some loss on consumer so we are investigating.

My assessment and suggestion: Looking at our business model, google gain profit mostly from its’ ads, so keeping driving user base are the most critical attribute. let’s look at the users.
1- This service shall be critical to the users that they’d pay $5/month instead of using google. 1st i ‘d check what function it offers to the customers, and let’s say 1% of our customer has the needs to use this service. 2- estimate the cost if we wanted to implement the same service, let’s say it cost $10M/year to implement this service. less than 10% would be spent on this service, calculate backwards, let’s say if 10% of their user use this paid service and that’s their main business model(50% from it), then their user base is roughly around 10M-30M. 3- we have 1.5B users worldwide which generated $1.2B rev/year, If we offer free service, the maximum user gain will be 10-30M, which roughly could generated $10-30M/year. 4- If we decide to offer free service and gain the users back, the pros is that we have additional 10M-30M business which is around 3% with cost around 1%,cons is that we might breakeven without profit if the actual cost be higher. If we decide to ignore and keep what we are offering, this is also a wise option, pros is cost saving and we still have few new functions that can compete and drive the users back, cons is that we might never gain the 10M-30M consumers if they are loyal followers to our competitors.

Mission :   The mission of Google is to organize the world’s information and make it universally accessible and useful.

my suggestion is that, we keep monitoring for one more month and see whether this new function could be implemented with a lower cost and can be integrated with multi google services in a long run from a sustainability perspective, or if this service is just one off phenomenon which can’t sustain, then we don’t invest on it.

Few clarifying questions here

• Is the competitor a service and does it have other offerings as well? Is it charging $5 for a service or only email?
• Is it for a specific platform here? Or does it include all platforms?
• Does the competitor have a huge market share/or is it a small company?

Let’s assume it’s only for email’s

• The structure I would want to layout for knowing what to do next for Gmail would be the following – Mission, Goals, Google’s revenue model, Customer Profiles using Gmail, Solution in terms of what Gmail can do & success metrics.

Mission :

The mission of Google is to organize the world’s information and make it universally accessible and useful.

Goals :

• To make email simple and intuitive.
• To provide a seamlessly integrated experience across Google Services.

Google’s Revenue Model :

• When we look at Google’s revenue model almost 60%+ revenue comes across from online ads.
• Currently, online ads are a part of Gmail, and given that 1.5 Billion active users use it we do generate a lot of revenue from the same.

Customer Profile :

• Enterprise User’s – This set of user’s pay a certain amount ($25 upwards depends on the size of the company) to use Google Services. This includes Gmail as well.
• Free User’s – This set of users don’t pay to use Gmail, they can use Gmail but get ads while using the experience.

Solutions :

• I would like to focus on the free user’s here as enterprise users are already paying an amount to use the service.
• Acquiring more users – This is a golden opportunity to acquire more users. I would definitely go forward and make targeted ads to poach users from the other service to Gmail.
• Acquiring more users – Once we have more users we can make a higher revenue automatically as more ads impressions and clicks as we will have a higher user base (DAU/MAU/WAU).
• Improving ads – As mentioned earlier as Google makes most of its revenue through online ads, I will be sticking to keep Gmail free. As Gmail has over 1.5B users we can definitely work on getting our ads better and personalized.
• Improving ads – Even if the CTR and impressions go up by 10% we can make a lot of money. Improving ads can happen over UX/Technology in terms of how it’s represented to a user.
• Improving ads – We can also integrate ads in Gmail’s search box to ensure if people search tickets/shopping we can show them more relevant links on that.
• Personalized Bots- By introducing personalized bots on the Google hangout chats for more personalized services through which users can get more informed about services they desire to use.
• Personalized Bots – They can also be used to book cab services/shopping from aggregators like Uber/lyft/amazon and we will charge a small referral fee for doing this.
• All of the above solutions nicely tie down to our goals and we will still keep the service free.

Tradeoffs :

• I would like to start off with acquiring users first this is going to be extremely beneficial in the long run to gain market share and become the leader in this segment.
• The flip side to this is users might see this as opportunistic and might think of it is as negative PR and we might lose users.
• On the second solution of improving ads, I feel we can definitely get more clicks if the UX and personalization are even made better. As a result more $$ per user.
• The flip side is to personalize ads we need more data and we need to be able to have a fine balance between how much data we ask from the user.
• Bots are a new concept and will be much faster to execute any task as we can define preset recommendations.
• The downside is discoverability and how many people use it.

Success Metrics

• DAU/WAU/MAU increase QoQ/YoY
• $$ increase per user.
• CTR for ads
• Impression for ads.