Alphabet Inc (NASDAQ:GOOGL) is establishing an in-house startup incubator to retain entrepreneurial talent. The incubator is dubbed “Area 120” and will be helmed by Google executives Bradley Horowitz and Don Harrison.
Initially teams inside Google will present a business plan and apply to be in Area 120. If the plan is approved, the teams will get the opportunity to work full-time on their concept for some months. Then they can approach Google for more funding and establish a new company in which Google will be an investor.
The name “Area 120” is derived from Google’s popular “20% time”.
Larry Page and Sergey Brin wrote the following in their 2004 IPO letter. Google employees are encouraged along with their regular projects to devote 20% of their time on stuff that they believe will most help Google. This lets them be more innovative as well as creative. Several of Google’s achievements have happened this way.
Major 20% successes have been the creation of AdSense, Gmail and Google News and more. However for years there are doubts whether 20% time is present in Google anymore.
Area 120 appears to be an attempt to retain entrepreneurial talent. With the latter in mind, Alphabet was created, the bigger parent organization Google comes under.
When Google introduced Alphabet, Larry Page noted that one of its objectives was letting entrepreneurs and companies thrive some of whom don’t want to establish their organizations within Google.
Area 120 will be situated inside one of Google’s San Francisco buildings. The former will not be in Google’s Mountain View campus.
Google hopes that the creation of the incubator could reduce the flow of talent to rival companies. For example Regina Dugan, who headed the Advanced Technologies and Projects group at Google left for Facebook Inc (NASDAQ:FB) this month. Whether Google can provide an environment where outstanding employees are permitted to innovate remains to be seen.
There are some unresolved issues yet. It is not known whether Google or Google Ventures will be the investor. Also whether successful ventures will come under Alphabet or Google is not known.