Twenty things to learn from The Everything Store book by Brad Stone

Recently I purchased “The Everything Store” book (Book is about Amazon Corporation and its founder and CEO Jeff Bezos) written by Brad Stone.

I was about to complete reading the book on the day of MahaSivarathri (21st Feb 2020). It was an auspicious and good to keep yourself awake on this day and I was determined to finish reading the book. It was around 1:00 am on 22nd Feb I completed reading the book.

In between the book reading, Amazon push notification came in my mobile and I opened up the Amazon app, to see advertisement on “Book your next bus trip”. I played my wheel game to win 200 Rs off and booked my return ticket for my next week trip to Bangalore. It is not just the discount but experience and easy to buy option is what that thrills the most of Amazon’s customers. Amazon is definitely an everything store and they are expanding their foray into every E-commerce space to maintain dominance.

I have written a few blogs last year about Innovation and RPA (technology space) and wanted to give it a try to write a book review. I have never done this before and wanted to complete this immediately as I will lose focus if I delay my thought. Many a times we all have many good thoughts but we don’t convert them to actions. So I do not want to have any further delay and started writing about my view of the “The Everything Store” book. There are many reviews available and my focus would be to highlight some of the Strategies, principles, and behaviors exhibited by Jeff Bezos and his organization. Some of the behaviors and actions were ruthless from leadership and best practice standpoint and I am going not going to be Judgmental in my review if it is right or wrong.

It was in 1994, Jeff Bezos founded Amazon as of result of his “Regret minimization framework”, which described his efforts to fend off any regrets for not participating sooner in the Internet Business Boom during that time. He left employment with D.E.Shaw&Co a Wall street firm and moved to Seattle, Washington where he began to work on a business plan for what would become Amazon.com. He registered his company initially as Cadabara Inc but later renamed it as Amazon. Bezos chose the name because Amazon is the largest river on earth and he wanted Amazon to be the largest book and e-commerce store on earth

Jeff Bezos had a firm belief that the Internet is going to rule the world and wants to utilize this great opportunity. Like many other technology companies which were started in a Garage, Amazon was started in Jeff Bezos Garage in Seattle, Washington. He started in Seattle to get tax benefits and also to get access to skilled workforce in the area.

The journey of Amazon for not just being branded as a “Retailer” was because Bezos always dreamed of Amazon as a Technology company. He did not want to be an another Walmart or Barnes & Noble. While he leveraged some of the key practices from Walmart and Costco in his business model and also hired some of the best talents from Walmart to run his warehouses, fulfillment centers, logistics and building IT systems.

Today Amazon has a company that has grown from a Book Selling company to full-fledged E-commerce with the addition of Amazon Market place, Amazon Prime, Kindle, Amazon Web Services and Amazon Video Streaming. It was never an easy journey from moving from an early stage start-up to a 1000 Billion Dollar market capital in 25 years.

I would like to focus and provide a list of some of the Characteristics of Amazon as an Organization and Jeff Bezos as a personality who brought in those culture and behaviors to achieve his dreams. Below are some of the key principles, strategies, and Behaviors that was exhibited in Amazon and by Jeff Bezos especially

1. Always believed that Internet will rule the world
2. Long term vision of 20 years ahead (Galaxy sized ambition, Execute it with dogged determination and boldness
3. D-I-Y, Do it yourself rather than depending on vendors and partners to do it for you. Amazon spends a ton of time experimenting and building its products. Stop searching for that golden ticket, whether it’s a certain stock, startup, software to buy for your company, or a literal lottery ticket and instead build your own products Bezos philosophy.
4. The only cost of innovation is time, and while it’s the thing most people are afraid to spend, it’s your biggest chance of building something with an impact. Amazon’s 1-click purchasing option, for example, was one of those experiments. The feature has been patented in 1999 and is worth billions in revenue each year since it removes the friction of the checkout process entirely.
5. Lowest price, largest collection of products — Everything Store
6. Very frugal in his spend and Bias for action (Bezos imbibed frugality and bias for action from Sam Walton (Walmart founder) : Made in America book)
7. Continuously push boundaries to keep the operational cost less and push the vendors and suppliers to give more discounts so that customers get the benefit
8. Customer obsessed: Focus on customers and Not Competitors. The one-click ordering process, the free shipping, the personalization — all these Amazon initiatives came about because Bezos drives the company to consider the customer first. He says that whilst they don’t ignore what the competition does, they are not led by it either. They are led by the customer.
9. Leaders are expected to start with the customer and work backwards
10. In every key meetings, Bezos had an empty chair denoting the customer so that every decision and work done by his company should first think about customer
11. “No best of both” in the Darwinian contest. Once he told the head appointed to run an e-book business that he should think of killing Amazon physical book business. He drew this advocacy from book Innovators Dilemma by Clayton Christensen
12. The Narrative Fallacy : favor experimentation and clinical knowledge over storytelling and memory. Every new business idea or a feature should be presented in the form of ‘six page’ narrative. The narrative should start with what will be communicated to customers and press releases and will get into the details. He hated Powerpoint presentations and XL. Not even TVs in the conference room.
13. Hired the best talent, MBAs and Ph.D.’s from Harvard, Stanford and MIT to achieve his goals. Persuaded many top talents to work for him. “Every time we hire someone, he or she should raise the bar for the next hire, so that the overall talent pool is always improving.” Jeff Bezos
14. Continuously pushed the boundaries with his leadership team and workers to excel in what they do. He is result oriented and metrics driven.
15. Give the lowest price to the customer and give them the best product, so that other technology companies whose business model is to get good margins don’t get in your way of business..
16. Only those employees who imbibed Jeff Bezos fervor on behalf of Amazon and its customers survived in the company. Others would leave. If an employee is not good Jeff would not need them. If they are very good he would ride on them to fulfill his dreams
17. Believed in 2 pizza teams and advocates to follow a model where there are synchronized and effective communications. He was advocating for teams to work more closely and organically where communication needs to be lesser. He is quoted as having said that bigger teams just add unnecessary cost and time to a project. Customer retention springs from a combination of technological superiority and customer service at Amazon, and so the faster they can get technical projects out, the better. Teams are therefore allowed to be no bigger than 2 pizzas will feed on a late-night project. This been seen as the blueprint for the lean processes Google and others in Silicon Valley ultimately followed.
18. He liked to move incredibly fast, which often created chaos, especially in Amazon’s distribution centers.
19. Dissatisfied customers can email Jeff Bezos directly and he ‘ll forward the message along to the right person — with one dreaded addition:”?”
20. Bezon does not advocate work-life balance. Bezos expected every employee to put in 60 hours of work every week. When all technology companies were providing many benefits and perks to their talented employees Jeff Bezos used to very frugal. Even his fulfillment centers did not have any air conditioners for a very long time and in summer temperature used to reach 100 degrees and above.

Except for the brutality of ignoring work-life balance for employees all other principles, strategies and behaviors are very critical for today’s businesses to run successfully. Many of the Agile, DevOps, Lean start-up concepts were practiced by Amazon to build this great company. If time permits I will be happy to write a detailed blog about Amazon and this book.