Is Google too lean for its own good?

By: E. Dronkert

Google announced the shut down of the Checkout product this past week. They’d like Checkout users to move to the latest shiny object inside Google Inc. called Wallet. The only problem? Google Wallet does not work for physical goods. And it doesn’t seem to have better customer service than PayPal. And it doesn’t seem to be an alternative to PayPal.

This got me thinking about a deeper issue with Google’s product strategy: Google is incorrectly applying the lean principles in mature categories where a more complete product is required to even get a seat at the table.

Let’s talk about the online consumer payments market…the same market that Checkout was attacking. It is a market that is in the midst of disruption given PayPal’s PR problems and the rise of Square, Braintree, Stripe etc.

Yet, while each of these companies have carved a niche and are “crushing” it in some manner, Google Checkout has been an overwhelming product failure. It was always a confused product with extremely weak positioning. The name “Checkout” suggests that it could be for ecommerce transactions. Yet, Checkout never had any special API or feature set that made it set apart from PayPal or the traditional merchant account experience. The typical Checkout experience consisted of linking out a customer to a Google page that collected the payment information. That is far, far from being seemless in the way that Stripe or Braintree or even PayPal’s advance offering.

Fast forward to Google Wallet. It reeks of the same kinds of problems as Checkout. There is no clear market positioning. Is Google Wallet like PayPal? Or is it like my credit card? Or is it meant to replace all my cards into one place? What is it really?

Unfortunately, I remain unclear even after reviewing the messaging on the homepage. In one screenshot, I see  a “Buy with Google” button. What does that mean? In another screenshot I see a “Claim Money” button. But I see no elaborate section that explains how I receive money. In contrast, PayPal has two very clear options on the homepage: “Buy” and “Sell”.

A headline on the homepage of Google Wallet screams “Start sending money in Gmail.” I use gmail all day long for years. But I cannot recall the last time I had an email open and I wished to attach money to it. It isn’t how we are used to thinking about transacting on the Internet. Now, Google’s got every right to innovate but making a feature such as this the focal part of your product’s pitch shows a fundamental misunderstanding or miscalculation of the market.

What’s the cause behind Google’s failure with payments? A post from May on the MobileWorld blog provides a few hints:

First there was Vikas Gupta in January 2012. About the same time Rob von Behren made departure, followed by Jonathan Wall and Marc Freed-Finnegan, who left to do their own thing. In June, Stephanie Tilenius left for a career in venture capitalism. Finally, last week it was the news that Osama Bedier had made an exit. Google has been losing its payments executives at a surprising rate since its launch in the autumn of 2011.


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