I first worked at Google back in 2012. Thinking back to the way the company was run then, it seems like an entirely different era. It was a place of radical transparency, where any employee could stand up at a weekly TGIF meeting, and have an earnest conversation directly with the founders. It was just a company, but it really felt like a company with heart. This year has been a bombshell for Google and now with Larry and Sergey finally leaving, it inspires the question: what happened? In 2008, both had a plan to work at Google until 2024. What takes a company with everything going for it, and drags it down into a place with employee protests, cut benefits, and secretive government deals?

The most common answer I hear is “greed”, but I think the real answer is a bit more subtle. Normal people don’t wake up in the morning and decide they’d like to take a controversial government contract. All of Google’s businesses are already growing at a breakneck pace. My opinion? Google’s decline is systematic, not intentional. So what happened? The stock market and rapid expansion. Let me explain:

Here’s a fundamental secret to how the stock market works: Stock prices aren’t driven by the current value of the company, they are driven by the company’s future value.

Let’s say Google is poised to grow 25% every year, for the next 10 years. Investors are smart: a long term growth like that is a great stock to purchase! Naturally, as investors buy in, this raises the price of the current shares. That future growth is ‘priced in’ to the stock’s current price. But here’s the odd thing: if Google simply makes good on their promise to grow, the stock price would stay flat! Investors already know that Google stock is good for a 25% return, so the demand for the stock stays flat, and so does the price.

This quirk means that if a company would like their stock price to continue to rise, not only do they have to grow, they have to grow at an increasing rate. At their earnings report it isn’t enough to be successful, they have to continuously be more successful than anyone thought they could be.

Let that point sink in for a moment. It’s a fundamental driving force of the stock market.