<p><img src="https://static3.businessinsider.com/image/5de8f70efd9db229870a9ce2-2400/ap537747765283.jpg" border="0" alt="buffett" data-mce-source="AP"></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><ul><li><strong>Google founders Larry Page and Sergey Brin <a href="https://www.businessinsider.com/google-larry-page-sergey-brin-step-down-alphabet-read-letter-2019-12'r=US&IR=T">stepped down as heads of Alphabet</a> in 2019.</strong></li><li><strong>The pair had the idea for Alphabeta holding company that houses Google, DeepMind, Waymo, and other businesseswhile visiting Warren Buffett more than 10 years ago.</strong></li><li><strong>"The genesis of Alphabet is a meeting that Larry and Sergey and I had about a decade ago where we flewtechnically, I flew them, shockingto Omaha, and we visited Warren Buffett," former Google CEO Eric Schmidt said at Alphabet's annual meeting in 2017.</strong></li><li><strong>Following Berkshire Hathaway's formula of trusting managers to run its businesses, Alphabet built a "corporate scaling mechanism that we've never seen in the world," Schmidt said.</strong></li><li><strong><strong><a href="https://www.businessinsider.com/'IR=C">View Business Insider's homepage for more stories</a>.</strong></strong><hr></li></ul><p>Google founders Larry Page and Sergey Brin <a href="https://www.businessinsider.com/google-larry-page-sergey-brin-step-down-alphabet-read-letter-2019-12'r=US&IR=T">stepped down as heads of Alphabet</a> in 2019. They had the idea for the holding companycreated in 2015 to house Google, DeepMind, Waymo, and other businesseswhile visiting Warren Buffett more than 10 years ago.</p><p>"The genesis of Alphabet is a meeting that Larry and Sergey and I had about a decade ago where we flewtechnically, I flew them, shockingto Omaha, and we visited Warren Buffett," Google's former CEO, Eric Schmidt, told the crowd at Alphabet's annual meeting in 2017.</p><p>"I remember sitting on, I think, the 14th floor and being struck by the extraordinary success of his model," Schmidt continued. "He had figured out a problem that had bedeviled all of us in our industry for years, which was how to establish scalability, right''</p><p>"He had a particular formula, which was the independence of the companies, strong CEOs, independent operation, and strong branding of those corporations," Schmidt added. Following the famed investor's example, Alphabet built a "corporate scaling mechanism that we've never seen in the world," he said.</p><p>Buffett's Berkshire Hathaway owns dozens of businesses including Geico, Dairy Queen, and <a href="https://markets.businessinsider.com/news/stocks/warren-buffett-berkshire-hathaway-dream-business-is-sees-candies-2019-7-1028348838">See's Candies</a>. The so-called Oracle of Omaha trusts managers to run the companies with minimal oversight, freeing him to focus on the big picture and smartly allocate capital across the conglomerate.</p><p>Alphabet's bosses drew a few distinctions between their company's structure and its inspiration.</p><p>Berkshire has largely avoided the tech sector and focused on proven, profitable companies with competitive advantages, <a href="https://markets.businessinsider.com/news/stocks/warren-buffett-switched-cherry-coke-pepsi-neighbor-don-keough-2019-11-1028727422">such as Coca-Cola</a>. In contrast, Alphabet has invested in self-driving cars, smart contact lenses, solar-powered drones, internet-beaming hot air balloons, and other high-risk "moonshots."</p><p>"It's different types of businesses than in the Berkshire family of companies," finance chief Ruth Porat told an analyst at the annual meeting in 2017.</p><p>Another analyst asked whether Alphabet's management team took up a single floor like Berkshire's top brass.</p><p>"It's maybe a quarter of a floor," legal boss David Drummond replied. "Ruth and I visited the headquarters several months ago in Omaha, and we realized that our Alphabet staff was actually much, much smaller than Berkshire Hathaway's."</p><p>Page and Brin have taken pages out of Buffett's book before. In Google's <a href="https://www.sec.gov/Archives/edgar/data/1288776/000119312504143377/d424b4.htm">IPO prospectus in 2004</a>, the pair included a section titled "Letter from the Founders: 'An Owner's Manual' for Google's Shareholders."</p><p>In a footnote, they wrote: "Much of this was inspired by Warren Buffett's essays in his annual reports and his 'An Owner's Manual' to Berkshire Hathaway shareholders."</p><p><a href="https://markets.businessinsider.com/news/stocks/google-founders-modeled-alphabet-warren-buffett-berkshire-hathaway-2019-12-1028737463#comments">Join the conversation about this story »</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/what-its-like-to-do-your-own-taxes-for-the-very-first-time-2018-2">July 15 is Tax Dayhere's what it's like to do your own taxes for the very first time</a></p>
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