In 2013, I had a conversation with a family friend at a dinner party.
At the time, he was a coding undergraduate, with the lofty aspiration of working at Google.
Aware of their notoriously difficult hiring process, I asked him, “Is there anywhere you’d like to work for, if you can’t get into Google? From what I hear it’s pretty competitive”.
Without skipping a beat, he responded, “The other company I’d love to work for is Amazon.”
I laughed in disbelief.
Back in 2013, Amazon didn’t seem like anything special — certainly not a tech giant rivaling the likes of Google, Facebook, or Apple.
But in hindsight, I was completely wrong about Amazon. Fortunately, he ended up landing his dream job at Google, but Amazon was an impressive “Plan B”.
Over the past ten years, they’ve sky-rocketed to the top — accounting for $4 in every $10 eCommerce dollars in the US. Just take a look at their share price:
And as the retail world continues to make the shift online, Amazon continues to dominate.
Recently I’ve been reflecting on this conversation. What did I miss with Amazon? How did Jeff Bezos turn an unlikely online book store into the biggest online retailer on the planet?
After doing a little research, I realized that there are three core pillars behind Jeff Bezos’ billion-dollar success at Amazon. And these principles aren’t just responsible for Amazon’s achievements, but also every successful startup ever to exist.
So without further ado, let’s get started.
1. Obsess Over Your Customer
When I think about Amazon, one word comes to mind — convenience.
If we want a product from Amazon, we can order it through a single click and receive it the next day. And soon with Prime Air drones will be able to deliver products to your doorstep, in under 30 minutes — it’s absolutely nuts.
Amazon is miles ahead of the competition when it comes to customer service, and that’s exactly why they’re winning.
As Bezos shares,
“The balance of power is shifting toward consumers and away from companies… The right way to respond to this if you are a company is to put the vast majority of your energy, attention and dollars into building a great product or service and put a smaller amount into shouting about it, marketing it.”
Thanks to the internet, we’ve got the luxury of choosing the best option based on our budget and quality expectations. Therefore the only way to convince customers to shop with you over the long term is to create an exceptional customer service — like Amazon.
Customer service is so integral Amazon that it’s even the core of their mission statement:
“We aim to be Earth’s most customer-centric company. Our mission is to continually raise the bar of the customer experience by using the internet and technology to help consumers find, discover and buy anything, and empower businesses and content creators to maximise their success.”
2. Embrace a “Day 1” Mindset
According to Jeff Bezos, we can choose between two mindsets: “Day 1” and “Day 2”.
As he elaborates, “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”
When companies grow they become sluggish and resistant to change.
As soon as we experience success, it’s easy to lose the initial spark of hunger that’s required for growth. When we switch our attention from risk-taking to risk-averse, we stifle innovation.
It can be tempting to stick with what you know, but this can often be the riskiest option. As soon as we stop focusing on the customer experience, our customers will shop elsewhere.
This is true even in the case of Amazon.
As Bezos admits, “Amazon is not too big to fail … If we start to focus on ourselves, instead of focusing on our customers, that will be the beginning of the end”.
Here are three ways that Amazon reinforces its startup mentality:
With a net worth of over a trillion, Amazon is incredibly frugal. Every year they release low-profit margins because they are always investing heavily back into the company. It’s even listed on their website as a core value.
By continuing to place restraints on their work, it challenges the company to innovate. They don’t simply rely on their immense resources to find an expensive solution, they innovate to find the best solution.
2. Fast Decision-Making
One of the biggest obstacles to company growth is bureaucracy. When the number of decision-makers increase, it slows everything down. And without efficient decision making, it’s easy to fall victim to inaction.
According to Bezos, there are two types of decisions, “one-way doors” and “two-way doors”.
- “One-way doors” — These are consequential and irreversible decisions.
- “Two-way doors” — These are easily changeable and reversible decisions.
“One-way doors” need careful and methodical deliberation, while “Two-way doors” need faster decision-making.
Even a company like Amazon always manages to keep looking for opportunities to grow.
“Amazon today remains a small player in global retail. We represent a low single-digit percentage of the retail market, and there are much larger retailers in every country where we operate. And that’s largely because nearly 90% of retail remains offline, in brick and mortar stores.”
Instead of seeing Amazon as a big fish in a small pond, Bezos always chooses the observe the inverse.
3. Play the Long Game
Although it feels like Amazon has sprung to the top out of nowhere, it couldn’t be further from the truth. It doesn’t take much research to see that Amazon’s stellar success is a product of over two decades of hard work.
Just take a look at this photo of Bezos in 1999 during an interview for 60 minutes:
Ignoring short-lasting hype isn’t easy, but as Amazon proves, it’s necessary for long-term success. Bezos decided to focus solely on providing the best online retail experience — and twenty years on, it shows.
As Bezos shares, “If everything you do needs to work on a three-year time horizon, then you’re competing against a lot of people. But if you’re willing to invest on a seven-year time horizon, you’re now competing against a fraction of those people, because very few companies are willing to do that.”
I can’t think of anything that sums up the power of his teachings better than this simple quote:
“We’ve had three big ideas at Amazon that we’ve stuck with for 18 years, and they’re the reason we’re successful: Put the customer first. Invent. And be patient.”
Although we all like to overcomplicate it, that’s all it comes down to — prioritize customer experience and never stop innovating.
Reference: Nick Waghorn on Medium, https://bit.ly/2XzZPzn