This is a very early draft of a book proposal/outline for a book. I’m not sure where it goes next, to an agent, publisher, etc. but here’s the basics of what I’m thinking.
This page contains the outline of the book and starts with the proposal.
This is the high-level proposal info(based on Jane Freidman’s website) that I’m going from. Any other help is much appreciated.
What is This Book About? This is a book about thinking Amazonian. It’s about how working at Amazon and how it changed the way I think. I start each section with a Leadership Principle, the core of Amazon’s culture, and then show how that leadership can be used outside of Amazon. In many ways this book is inspired by Amazon as much as it is about Amazon. Sometimes it’s not about Amazon at all, like when Jeff said, “You can work long, hard, or smart, but at Amazon.com you can’t choose two out of three.” This is a book about being smarter not working harder or longer. Sometimes I’ll veer away from the Leadership Principles when I think there are more interesting tangents. Like in Dive Deep, instead of focusing on auditing effectively, I focus more on the hidden beauty of the world.
The book is arranged into two parts:
- Amazon Basics: This section, a pun on Amazon’s private label brand, gives the overall introduction to the book. It starts with my orientation, introduces the Amazon Mindset, and introduces the basics of AWS.
- Amazon’s Leadership Principles: The core of Amazon’s culture are its 14 leadership principles. So the meat of this book covers these principles, starting with the principles themself, showing how they’re used at Amazon, and highlighting how these principles can be used in everyday life.
Who Will Read This Book? This is a book for someone who wants an in-depth understanding of Amazon’s culture from a personal perspective. As for genre, a customer would expect to find it in a bookstore aisle for a self-help business productivity book like Steven Covey’s Seven Habits of Highly Effective People or David Allen’s Getting Things Done. But it also has a basic education about Amazon history and culture, like you’d get by working at Amazon. So you might find it next to the The Everything Store or the New Book Working Backwards. As a tech company, Amazon can get pretty technical. Anything really technical I’ll call out as a technical aside, but most of the book is written for my mother-in-law, a very smart person who is highly adept at looking at digital photos of her grandkids. The goal of the book is to engage readers and have them take away something useful that will change their life. I want people to think “Hey, that’s a good idea! And if it’s good enough for Amazon, it’s good enough for me.”
Why Me? Ideally, who would you want to write this book? You’d want someone who worked at Amazon, preferably at a senior level. That person doesn’t have to be a great writer but they do have to be a good thinker. They have to bridge Amazon’s culture into actionable results. Here’s how I match up:
- My Amazon Experience: I was the head of Banking at Amazon Web Services. It was my job to travel around the world and explain to clients how Amazon Web Servies could transform their business. I would talk to the world’s largest banks and the most innovative startups about how Amazon provides a transformational platform for their technology.
- My Business Experience: I’ve had an extensive business career before and after Amazon. I’ve spent a decade at Citi leading strategy and online banking initiatives, was a consultant at Booz Allen Hamilton’s Commercial Consulting Practice (now PWC’s Strategy&) building strategies for the world’s largest companies, led digital product at AIG, and even spent some time at Microsoft.
- As a Writer and Presenter: I was a contributing editor to Abercrombie & Fitch’s Quarterly magazine from 1999-2004 and published in other national magazines. I co-wrote two book-length reports on Mobile Payments while at Citibank.
- Other Things: I built one of the first thousand Amazon Alexa skills, presented my creation to replace ads with my “To Do” list at the world’s largest tech Meetup, and re-created my favorite T-Shirt which was once classified as a weapon.
I had the privilege of working for one of the world’s biggest celebrities and now I’m writing a book about it. OK, that’s not exactly true but it’s close. I worked at Amazon as their head of cloud banking and I’m writing a book about how Amazon changed the way I think.
I used to be the Head of Banking for Amazon Web Services (AWS). I was responsible for AWS’s strategic initiatives for banks and lenders across the world. I worked with these organizations to transform their existing businesses and bring new, innovative solutions to market with AWS.
There are lots of great books and videos about Amazon, but this one is different. It’s about being Amazonian, which is what Amazon employees call themselves. This isn’t just a book about Amazon. It’s about thinking like an Amazonian and how you can apply this thinking to your own life. It’s my book so I’ll express my understanding of these ideas. Sometimes I’ll go on an entirely different tangent than Amazon because this book is about personal growth as much as it is about Amazon. For example, the concept of Dive Deep at Amazon is about auditing all of the processes to ensure operational excellence. Instead I wanted to focus on Diving Deep to understand and appreciate the beauty of the world.
Understanding Amazonian thinking is key to being successful. I’ve seen people try to be like Amazon and failing. Companies that try to be like Amazon spend millions of dollars on an innovation center and gloat about how they’ve implemented design thinking. They wear hoodies and fancy jeans to work to pretend like they work in Silicon Valley,(2)Expand this in the book. Maybe add a quote from Tom Wolfe about Robert Noyce–maybe the one that Ben Horowitz uses in his new book. but don’t understand that people wear hoodies in Silicon Valley because they think that clothes shouldn’t make the man.
Most books about Amazon treat the reader as a tourist visiting a new and mystical land. It’s kind of like watching the movie Charlie and the Chocolate Factory.(3)The UK paper The Register refers to Google as “The Chocolate Factory” because it’s as weird and wonderous as Willy Wonka’s candy factory. You get a feeling of what it’s like but you’re still looking at it from the outside. But what if you could get the mind of Agustus Gloop, the glutton who fell into Mr. Wonka’s chocolate river, and find out how the experience changed him. That’s the feeling I want to give you in this book.
So what does it mean to be Amazonian? From the outside, Amazon looks like a holding company—a collection of businesses from a bookseller to a grocery store to a television production company. There’s even my old part of the business, Amazon Web Services, the world’s largest cloud provider. But all of these pieces are held together by one thing—Amazon’s culture. It’s a culture that’s centered around 16 Leadership Principles. These Leadership Principles are the core of Amazon’s interviews, promotions, and making everyday decisions. In this book, I’m going to take you through the 16 principles and show you how to apply them.
Let’s start with the first principle: Customer Obsession. In Jeff’s first letter to shareholders he writes how important it is to “Obsess Over Our Customers.” This is before the Leadership Principles even existed. Amazon is obsessed with its customers. This means providing the best possible experience for each of them. When Amazon was just selling books, it meant providing the best book-buying experience in the world, but things have gotten much more complicated since then.
Customer Obsession applies to the whole firm, even unlikely areas like recruiting. At most places, the company is the customer and the interviewees are selling their services. The companies want to hire the best people and don’t care very much about the people they don’t hire. But Amazon knows that virtually everyone that interviews at Amazon is an Amazon customer so the company strives to give each interviewee a great experience. They don’t want to lose that retail customer and their friends because someone wasn’t treated well in an interview.
What does Customer Obsession mean for this book? Well, you as my reader are my customer and I want to give you an amazing experience reading this book. Having an exceptional experience is about looking beyond the ordinary and creating something new. Here’s an example of an exceptional experience.
I was working for Amazon at an event in Tokyo. I had an afternoon off and went to the Imperial Palace, the residence of the Emperor. I started off as a tourist–running around and seeing the giant gates and towers that protected the palace for centuries. I wandered through the Emperor’s garden–where he and his family still strolled around on Mondays and Fridays when the gardens are closed to the public. It was nice but it wasn’t earth-shattering. The garden was lovely but didn’t feel that different than strolling through Central Park a few blocks from my apartment.
Then I changed my point of view. Instead of looking at the garden as a tourist, I thought, “What would the Emperor do in these gardens?” He’d sit around and meditate next to one of the world’s most beautiful iris gardens.(4)When the East Gardens were built in 1966, irises were transplanted for the iris garden of Meiji-jijgu, a shrine dedicated to Emperor Meiji, the great-great-grandfather of the current Emperor. So that’s what I did. When I left the garden an hour later, I truly felt like an Emperor! I was able to take this experience and feeling with me when I went home.
In this book, I want to give you an experience that treats you like the special customer that you are. I’ll explain the Leadership Principles and show you how you can use them in your own life and business to be more successful.
This book is split up into 2 main parts:
- Amazon Basics: This section, a pun on Amazon’s private label brand, gives the overall introduction to the book. It starts with my orientation, introduces Amazon’s peculiar ways, and takes you through the basics of AWS.
- Amazon’s Leadership Principles: The core of Amazon’s culture are its 16 Leadership Principles. So the core of this book covers these principles, starting with the principles themself, showing how they’re used at Amazon, and highlighting how these principles can be used in everyday life.
Orientation (Draft Notes)
Let’s start with my actual orientation at Amazon. It’s about my onboarding to Amazon but also to orient the reader in the book. We start off in JFK19, one of Amazon’s newest buildings in New York. Amazon names all of its buildings with codes of nearby airports to highlight how it started as an e-commerce firm. I was based in JFK14, across from the Empire State Building, and in our basement was JFK15, the Amazon Prime Now Warehouse.
Orientation started with a whole lot of people being mashed together from all parts of the business world. Many of the new hires were joining Amazon Web Services (AWS) like me. But there were people joining Amazon’s other businesses like advertising and fashion. There was even someone joining Comixology, an Amazon Publishing subsidiary that publishes electronic comic books.
Everyone was getting used to the new company. It was easy to spot the former Microsoft employees as we filled out our orientation forms on our new computers. They kept jabbing their screens with their fingers—jab, jab, jab—as they got increasingly frustrated. Then they realized that they no longer had their Microsoft touchscreen computers. The orientation ended with a wonderfully funny but very Amazon video of “the wallet meeting” where Russ Grandinetti, now the head of Amazon’s International Consumer Business, took everyone through a painstakingly detailed email reply-all catastrophe. It was very Amazonian, packed with data, informative, and lighthearted.
While the in-person orientation lasted 3 hours, Amazon gives you 3 months to come up to speed with the firm. At AWS this was a combination of learning the basics of AWS (it’s a little scary but I’ll take you through it in LP #7: Learn and Be Curious) and getting deeper into the culture of Amazon.
As I went through orientation, I saw Amazon from its early days until today and how the vision of Amazon stayed relatively consistent. Though in the first shareholders’ letter Amazon had $147M in revenue and Bezos had hair and a giant guffaw, Bezos focuses on the same principles each year in his annual letter. Each year he even includes the original letter from 1997 to show shareholders (and himself) how the company sticks to its original principles.
At my first interview, I was asked, “Why do you want to work at our peculiar company?” At first, I didn’t understand and I’d never heard Amazon described that way before. Powerful. Yes. World-renowned. Of Course. But peculiar? Never. Over time I’ve learned that peculiarity is a good thing. On the AWS culture webpage it says “At Amazon Web Services, we don’t mind being called “peculiar.” We have our own way of doing things. We’re obsessed with customers, we see beauty in simplifying the complex, and we’re comfortable with being misunderstood.”
What makes Amazon different than other companies? The company tries to make the right long-term decision even if it’s uncomfortable at first or looks weird to others. Imagine walking into a room for your first big Amazon meeting to discuss a new product idea. You would expect the product owner to stand in front of the room with his PowerPoint projected on the screen. Instead, you see 10 people around a table. They’re all reading silently for 20 minutes. You’re wondering when the meeting is going to start when someone offers you a six-page document and a pen.
This is Amazon’s Document Review process. Amazon realizes that meetings shouldn’t be about convincing people, they should be about coming to the best possible conclusion. Powerpoint was created to sell things. The informal origin story of the document review is that Jeff was sitting in a presentation and noticed that the speaker notes. Jeff said, “I’d like to see those speaker notes. It looks like that’s where the real data is.” Though the truth is that Jeff thought that PowerPoint wasn’t a useful look at the S-Team meetings of his directs. When he read Edward Tufte’s “The Cognitive Style of PowerPoint: Pitching Out Corrupts Within,” he knew he needed to make a change. (5)Bryar, Colin. Working Backwards (pp. 85-86). St. Martin’s Publishing Group. Kindle Edition.
Peculiar also means that Amazon doesn’t take itself too seriously. At the end of the 3 month orientation period, the final assignment is to view some of the funniest reviews which shows the off the crazy, peculiar, and funny culture that is Amazon.(6)As far as I can tell, this started with a Maria Popova story highlighting many of these reviews and then Amazon took ownership of the idea. While Amazon is fanatical about taking down purposely misleading reviews, there’s something different about humorous reviews for products like BIC Cristal For Her Ball Pen and Hutzler 571 Banana Slicer where people are having a lighthearted conversation about the product. Amazon even produced an audio version of these reviews read by celebrities which comes across as a bit clunky, but you’ve got to give them credit for trying.
Perhaps the most misunderstood concept at Amazon is its view on failure. In order to be successful, companies can’t be afraid to fail. Jeff talks about this a lot. But the reason that failure is good is because that’s where the learning comes from. As Jeff says, in the 2015 shareholder letter, “One area where I think we are especially distinctive is failure. I believe we are the best place in the world to fail (we have plenty of practice!), and failure and invention are inseparable twins.” However, using failure as a proxy for innovation sets a danferious precedent. I know one IT executive who said, “We should be failing a third of the time or we’re not trying hard enough.”
Working at Amazon is hard, not because it’s grueling but because you’re always learning. Real failure is painful. In order to grow, you need to try your hardest, get knocked down, and get up again. It’s hard but it’s the only way to grow. In order to adapt to this way of thinking, you need to adopt an Amazonian mindset. This mindset, outlined in Carol Dweck’s book Mindset, shows how you how to love growth and learning and better accept failure. I’ll talk through Dr. Dweck’s work in this chapter.
AWS Basics (Draft Notes)
The words “Amazon Web Services” and “Software as a Service” are intimidating. Some of this is intentional. Technology people have a way of making things sound far more complicated than they need to. This is a form of job protection that goes back millennia. Ancient Traders would share stories of the fearsome cinnamon bird to justify their high prices. They would tell of treacherous journeys where they would risk life and limb to steal these precious sticks from the cinnamon bird’s nest. This let the traders charge significantly more for their spices and prevented others from trying to acquire the species themselves.(7)According to Herodotus, the giant cinnamon bird used cinnamon sticks to build their nests, which were fastened to sheer cliffs. The Arabian traders would leave pieces of oxen and other large game near the cinnamon bird’s nests for them to scavenge. When the meat was brought back to their nests, its weight would break the nests off the cliff, allowing the traders to gather the pieces of cinnamon.
Amazon Web Services (AWS), or “the cloud,” is simply about renting computers instead of buying them. For years, if you wanted to use a computer, you needed to buy a physical device with things like memory and CPUs. But why do you need to buy all of this stuff? You didn’t care about the computer itself, you wanted it to do something for you. You already likely use a version of this for email. In college, I had to have a computer program like Eudora or Microsoft Outlook to send and receive email. Today, I don’t need an email program. I can just access my email in the cloud through Gmail whenever I need to. Many things are offered as a service today like email, music, and even printer ink.
While many consumer services were moving to the cloud, businesses were still building their own computer infrastructures. Why can’t computing be more like electricity, where you just flip a switch and then you get your power? The genius of electricity is that you can buy a little bit of it or a lot of it whenever you need it.
AWS offers a number of key benefits to businesses. One of the most important is the ability to scale up and down quickly to meet customer needs. As I wrote in my Mother-in-Law’s Guide to Cloud Computing, without the ability to rent AWS resources, a business would need to keep the resources that it needs for peak usage live the whole year.
Customer Obsession (Draft Notes)
Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.
Customer Obsession has been the core of Amazon since the first shareholder’s letter in 1996. While many companies care about their customers, Amazon truly obsesses over its customers. As one of my Amazonian friends said, “Google fetishized its employees the way that Amazon fetishized its customers.” At Google, employees are treated like kings with free food, massages, etc. My favorite Google perk was the authentic wooden sushi bar with a Japanese chef in the New York office circa 2010. Amazon doesn’t have these perks, being far more focused on customers. Amazon wants people to work there because it believes in the mission, not staying for perks.
Customer Obsession is about being 100% committed to the customer’s success. AWS once was partnering with another company on a key piece of software. When the product failed on a late one Thursday evening, the partner told Amazon that they’d fix it in the morning. The Amazon team said, “Wait! That’s not going to work. Our team can’t go home until this is fixed!”
At a traditional company, the product group comes up with an idea that they believe a customer will love. They look at industry statistics, maybe talk to a couple of salespeople, sit in a room and create the product. They’ll run it by senior leadership and get some feedback before spending months or years building it. Then the business managers will give it to the marketing team and sales teams to sell it. This makes sense from a manufacturing perspective, but why are we trying to sell something to clients. Shouldn’t we be creating products that they already want?
That’s what Amazon does. At Amazon, the company uses a product mechanism (the fancy Amazon word for process) called “Working Backwards.” Working Backwards has a two meanings. First, Amazon works backward from the customer to build the product based on what the customer wants. It also highlights that Amazon’s process doesn’t come up with the product and then sells it to the customer; they do it backward from the ways other companies do.
The Working Backwards process starts with a Press Release. If you were successful in this project, what would this fictional press release look like? They are showing customers what it would be like when the product would launch. The press release answers questions like, “Who is the customer who’s using the product?,” “What’s the key pain point that the customer has?,” and “How will this product delight them?” The press release goes through many versions before it’s nailed down. At the end of this process, there’s a compelling experience that everyone is building towards. Only then does the Amazonian start fleshing out the product by answering the key questions that internal and external stakeholders will have. Requirements are kept to the things that really matter. If it isn’t needed for an end customer, it doesn’t need to be in the requirements. It’s obvious when you think about it. Shouldn’t you be laser focused on building an experience that your customers will love?
When reading through this book, it’s important to keep in mind the customer of this book—you! While there’s some advice and thoughts in here that worked for me, its important to understand what you want to apply and how you want to apply it. You’ll (hopefully) find some of the things in this book very useful. Other things will be completely worthless. You might ask about why I didn’t make this book shorter then, and leave out all of the things that aren’t good. It’s because the bits that are useful to you will be worthless to someone else, and vice verse. My favorite example of this is the word count feature in a word processor. If you’re looking at the 20% of the features that everyone uses, you wouldn’t include a word count. However, once you send your proto-wordprocessor to journalists to review, they’ll notice that word count is missing. The 1% of users who use word count are the reviewers!(8)I took this example of word count and the 80/20 rule from Joel Spolsky.
I’ll expand upon this concept of value that I wrote about in How Much is That Really Worth? The Mother-in-Law’s Guide to Valuation. Specifically, to really obsess over a customer you need to provide them with the things that they really need. In this example, I discuss the meaning of value as it relates to a souvenier crushed penny. That crushed penny is literally worth a penny even though I’ve spent $1 crushing it. However, the value of the penny to my kids is as a thoughtful souvenir, which is worth way more than that.
Ownership (Draft Notes)
Leaders are owners. They think long term and don’t sacrifice long-term value for short-term results. They act on behalf of the entire company, beyond just their own team. They never say “that’s not my job.
In January 2004, Amazon started its digital media business. The first thing that Jeff did was to devote an owner to the project. He promoted Steve Kessel, Amazon’s head of books, video, and music, to run the business. Steve became a “single-threaded leader,” an Amazonian term for a leader who owns a single major initiative and can relentlessly focus on it. By making Steve a single-threaded leader, he was able to drive the business unencumbered by the rest of Amazon’s business.
The idea of the single-threaded leader comes from Amazon’s technical architecture. In the early 2000s, Amazon.com ran as a single massive executable named Obidos. It was named after a village on the fastest part of the Amazon river. Obidos was built to run fast; however, having one single application meant that a junior developer could crash the entire website by deploying code (which happened more than once). Also, as Amazon got bigger, the speed of innovation on Obidos slowed down.
So how does Amazon manage to move so quickly today? The secret is separating the different pieces of the software. The original Obidos system had too many programmers touching one system. It’s like having too many cooks in the kitchen. Imagine that you’re starting a restaurant. We’re thinking about Amazon so you have one kitchen shipping orders to the whole country. When you started up, you have one chef, maybe two. But as the company gets bigger you might have a hundred chefs. They’re all trying to fiddle with the same ingredients. So when the new chef from Barcelona has a new idea for a Spanish tortilla soup, he orders a different type of tomato. We now have fantastic tortilla soup, but this new type of tomato breaks the recipe for the chili. Well, we can’t have that happen! So you implement a big process to prioritize all of these changes to ensure that no one breaks anyone else’s recipes. This process works but it’s very slow and frustrating for everyone in the kitchen.(9)At Amazon this was called the NPI process and it prevented people from making changes in Obidos or any of the other major systems without approval.
So Amazon separated out all of these pieces. So you’d have a soups department, a produce department, a bakery, etc. Each of these departments publishes its offerings as a set of offerings to the other groups (which in technical terms would be called an API). So if you want to make a tortilla soup, you need to use one of the available tomatoes from the produce department. If you want a different type of tomato, you talk to the produce department and ask them to add something new to their offering which they’ll do next time they publish their menu. No one needs to know anything about the other departments other than what they offer. This means that any group can move fast and create new things without breaking anyone else’s recipes!
Single-threading (focusing on one thing) works well for people as well. While we think we’re good at multi-tasking, scientists have found that performance is a lot better when we focus our attention. Without that, you’re always thinking about what came before and what could happen next.
The best example of focus is from my friend Marc. Marc and I have been friends since summer camp and we meet up pretty regularly. The last few times we went to lunch, Marc sat down and set a timer on his phone. He said to me, “I hope you don’t mind that I’m doing this but I want to really pay attention to you. I don’t want to have to check my watch and be worried about how much time I’m spending here. If I set a timer I can give you my full attention and then I don’t have to worry about checking my watch.” This free’s him up to focus on one thing, ME! And that makes both of us happy.
Invent and Simplify (Draft Notes)
Leaders expect and require innovation and invention from their teams and always find ways to simplify. They are externally aware, look for new ideas from everywhere, and are not limited by “not invented here.” As we do new things, we accept that we may be misunderstood for long periods of time.
When I was studying computer science at Yale in the late 1990s, we didn’t think of Amazon an innovator. Amazon was an internet bookstore that was more interested in winning in business than creating new technologies. This became clear when Amazon filed the patent on one-click purchasing. It was so simple that none of my technical friends believed it had merit. How could buying something with one-click be a patentable idea? But it was a customer focused changed in the way people shop. Previously people had the model in their heads of selecting an item, putting it in a shopping cart, and checking out. One-click changed all that, letting people buy items without a shopping cart.(10)I’ll expand more on the one-click story in the book.
Invention is a bridge between what the company has and what the customer wants. Too often, people think about invention as adding a new feature to what’s existed before. Invention is key to delivering on customer obsession. We know that even if things are good, customers are going to be dissatisfied, so the logical thing is to build . However, innovation unchecked leads to complicated Frankenstein products that are impossible to use without a manual.
Seemingly simple inventions can lead to transformational business opportunities. In an oral history of Amazon Prime, Charlie Ward said was obsessed with one-click ordering and also with free shipping; however, free shipping was only available for orders of more than $35. So Charlie would have to keep going into his cart and get to that threshold. Finally, he said, “Wouldn’t it be great if customers just gave us a chunk of change at the beginning of the year and we calculated zero for their shipping charges?'” That became the foundation of Amazon Prime.
The classic example of an overcomplicated product is a door. A door should be obvious to use–you open it and you close it. But doors only open one way and that way isn’t always obvious. So you can find yourself trying to push open a door that can only be pulled and feel pretty stupid. Maybe the architect even put a signs on the door that say “Push” and “Pull.” These unintuitive doors are for Donald Norman, one of the godfathers of modern design. In the book I’ll go deeper into Norman doors and what makes a good door. A well-designed door can be critical. A poorly designed door caused the Victoria Hall Disaster and led to the creation of Emergency Exits. (11)In the book I’ll go more into this story.
My favorite example of simplicity is from Atul Gawande’s book The Checklist Manifesto. Gawande highlights the current problem in medicine. Previous to the last 100 years, doctors had a gaps in their knowledge. It was common for sick people to be medicated with leeches or mercury, making them sicker than if they were left alone. For instance, George Washington had 40% of his blood removed before he died. But now, at the beginning of the 21st century, our doctors are awash in medical knowledge. He continues:
Nonetheless, that know-how is often unmanageable. Avoidable failures are common and persistent, not to mention demoralizing and frustrating, across many fields—from medicine to finance, business to government. And the reason is increasingly evident: the volume and complexity of what we know has exceeded our individual ability to deliver its benefits correctly, safely, or reliably. Knowledge has both saved us and burdened us.
That means we need a different strategy for overcoming failure, one that builds on experience and takes advantage of the knowledge people have but somehow also makes up for our inevitable human inadequacies. And there is such a strategy—though it will seem almost ridiculous in its simplicity, maybe even crazy to those of us who have spent years carefully developing ever more advanced skills and technologies.
It is a checklist.Atul Gawande, The Checklist Manifesto
Are Right, A Lot (Draft Notes)
Leaders are right a lot. They have strong judgment and good instincts. They seek diverse perspectives and work to disconfirm their beliefs.
Are Right, A Lot at Amazoon isn’t about having a preternatural ability to predict the future. It actually has a number of parts:
- First, look at the data and see what the data tells you to do.
- Second, if there isn’t enough data, can you fill in what isn’t there to make the right decision.
- Third, you can’t always know the right decision up front. The best thing to do is move forward, and make the best decision you can. If you fail (and you almost certainly will fail the first time), learn from those mistakes so you can try again.
The third piece is the most interesting to me. As Jeff says, “One area where I think we are especially distinctive is failure. I believe we are the best place in the world to fail (we have plenty of practice!), and failure and invention are inseparable twins.”(12)2015 Shareholders Letter Instead of hiding their past failures, Amazon publicly embraces them. In the standard talk about Amazon’s Culture of Innovation, they make a point of highlighting Amazon’s biggest failure, the Fire Phone, which failed in one year and took a write-off of $170 M. However, underlying technology set the stage for Alexa and the Amazon Echo.
It’s easy to think that Amazon has a special portal to the future. The magic at Amazon is that the company realizes that the world is constantly changing and they need to change too.(13)Note that the future changes pretty quickly. I had a friend who was working off a 7-year-old BCG pricing strategy which management trusted because it was blessed by BCG. Once you’re honest about your inability to predict the future, it becomes a game of execution to get to the future first.
So what do you focus on. The easiest thing to do is focus on output methods like stock price and revenue. But that’s not what Amazon focuses on. Amazon focuses on input metrics like selection, price, or delivery times. These are things that the company can measure controllable input metrics are things that Amazon can alter. Focusing on output metrics leaves too much to chance.
It’s easy for people to get overly focused on output metrics. If you look at Harvard Business Review, they look at companies that are doing well and then create theories for why they are doing well. That’s the point of The Halo Effect by Phil Rosenzweig. Rosenzeig looks at Cisco:
As an example, when Cisco Systems was growing rapidly, in the late 1990s, it was widely praised by journalists and researchers for its brilliant strategy, masterful management of acquisitions, and superb customer focus. When the tech bubble burst, many of the same observers were quick to make the opposite attributions. Cisco, the journalists and researchers claimed, now had a flawed strategy, haphazard acquisition management, and poor customer relations. On closer examination, Cisco really had not changed much—a decline in its performance led people to see the company differently. Indeed, Cisco staged a remarkable turnaround and today is still one of the leading tech companies.Rosenzweig, P. (2018, February 9). The halo effect, and other managerial delusions. McKinsey Quarterly.
In her book, Thinking in Bets, World Series of Poker Champion Annie Duke breaks this all down to a game of poker. Poker is a game of skill but it’s also a game of luck. In poker, it’s tempting to judge the play by who won the hand. However, it’s much more important to judge the quality of play by looking at probabilities. As an example, when someone goes “all-in” and bets all of their chips, everyone’s cards are exposed. So if someone goes all-in with a 76% of winning, they are playing well. There’s still the element of chance, but whether they win or lose the hand, doesn’t change how well they played. Over time, good input metrics will yield good results, but that takes time to bear out.
It’s also worth highlighting the missing Leadership Principle, Be Vocally Self-Critical here. Being Vocally Self-Critical means admitting your mistakes and being able to learn from them. I’ll highlight those principles I shared in my article Tell Me About a Time You Made a Mistake.
Learn and Be Curious (Sample Chapter)
Leaders are never done learning and always seek to improve themselves. They are curious about new possibilities and act to explore them.
Learn and Be Curious is about the desire to learn things, especially if they’re outside your comfort zone. It’s about having a bias towards “tell me more” vs. “that’s not my job.” During the AWS onboarding, everybody needed to learn how AWS worked whether it was the sales team, marketing, or the support staff, and they were all able to get to a basic level of competency.
My friend Rick was interviewing at Amazon. He was an investment banker, well over six feet tall with fine Italian suits. He looked nothing like a tech guy. To show off his curiosity, I showed him how easy it was to set up a site on AWS. Within a week he sent me an AWS website that read, “Rick is Awesome!”
Learn and Be Curious is about changing your perspective. Whether you see something as exciting or intimidating is a matter of perspective. Imagine two brothers going down a water slide. The first brother looks at the slide and says, “Wow! We are 5 stories high and that slide goes right down. My heart is beating so hard, it’s practically in my throat. I’m so anxious and frightened. There’s no way I’m going down that slide.” The second one says, “We are 5 stories high. My heart is beating so hard it’s in my throat. This is awesome!”
Perspective is key. If you have the wrong perspective, teaching a kid to throw a frisbee can be extremely frustrating. With the right mindset, I’ve been able tackle some impressive feats like juggling, drawing, or even re-creating my favorite t-shirt.(14)I’ll talk about each of these things more in the book.
Hire and Develop the Best (Draft Notes)
Leaders raise the performance bar with every hire and promotion. They recognize exceptional talent, and willingly move them throughout the organization. Leaders develop leaders and take seriously their role in coaching others. We work on behalf of our people to invent mechanisms for development like Career Choice.
Amazon hires great people. At first, you’d think that Amazon gets these people because of the brand and that the smartest people flock to Amazon. My friend is interviewing at a digital marketing company. She’s told me that the interview process was grueling with 5 rounds of interviews and at least 2 people interviewing her at each round. She said, “It’s not like they are Amazon. They should be nicer to their interviewees.”
But Amazon doesn’t just have a great brand, they also focus on the hiring process. In specific, they focus on three things:
- Provide the best hiring experience. The best candidates have lots of options. Act fast. The one who acts first gets the best candidates.
- Protect the long-term interests of the company. Bar Raiser.
- The science of decision making. Set standards and intedependent thinking.
Amazon strives to give each interviewee a great experience, whether or not they get the job. It knows that virtually everyone that interviews is an Amazon customer. This means setting clear expectations, getting back to people quickly, treating every interview with respect. The best candidates also have the most choices. That’s why Amazon has a “2&5” promise on interviews. You’ll hear back within 2 days after a phone screen and 5 days after an onsite. This lets the company snap up great talent quickly.
Amazon is famous for its bar raiser hiring process. The bar raiser represents the interests of Amazon the company in addition to the hiring manager. The hiring manager is incented to fill a short-term need, regardless of the fit for Amazon. The bar raiser is a person outside of the hiring group who ensures that this person is Amazon material. In order to get hired at Amazon, you need to get the approval of the hiring manager (who represents the role) and the bar raiser. The bar raiser can veto any hiring decision. By having an experienced Amazon employee representing the firm and empowering them, Amazon ensures that hires are made for the long term and not just to fill a short-term need.
Finally, Amazon uses the latest research on decision theory to make better decisions. Interviewers aren’t allowed to see other people’s reviews of the candidate until they have put in their interview feedback. This allows for each of the reviews to be independent, and together they can come together to build a better result. In statistics, this is sometimes called The Wisdom of Crowds, taking a large number of independent results and combining them to get a better answer.
Insist on the Highest Standards (Draft Notes)
Leaders have relentlessly high standards — many people may think these standards are unreasonably high. Leaders are continually raising the bar and drive their teams to deliver high quality products, services, and processes. Leaders ensure that defects do not get sent down the line and that problems are fixed so they stay fixed.
I spent my first few months at Amazon immersing myself in the Leadership Principles. I read them every day, even retyping them into an app. That’s when I saw this Leadership Principle in 2018:
Insist on the Highest Standards
Leaders have relentlessly high standards – many people may think these standards are unreasonably high. Leaders are continually raising the bar and drive their teams to deliver high quality products, services and processes. Leaders ensure that defects do not get sent down the line and that problems are fixed so they stay fixed.Amazon’s Leadership Principles
It might look like the same as the description of the Leadership Principle above, as it did to millions of people reading it over the years. However, in this version, there was a Oxford comma missing after the word “services.” At most companies, this wouldn’t be a big deal, but writing is key at Amazon. I’d heard that Andy Jassy threw someone out of a room because they weren’t using Oxford commas. In a company with hundreds of thousands of releases a year, it’s critical to make sure that every detail is checked. So Andy can use the heuristic of “Did you use the Oxford comma” as a quick metric for, “Do you pay attention to all the details and insist on the highest standards.”
David Lee Roth tells a similar story about the band Van Halen in the 1970s, when he was the band’s lead singer. Van Halen would roll into town with 9 18-wheelers of equipment and a huge number of requirements. Missing specifications could lead to some big safety concerns like girders that couldn’t support the weight and flooring that would sink in.
The contract was huge, requiring a very high attention to detail. They couldn’t check every item before every concert so they came up with a shortcut. In the middle of the contract, they wrote that that the band needed M&M’s but ABSOLUTELY NO BROWN ONES. If the band saw a brown M &M backstage, they knew they’d have to check the entire production to avoid a possibly life-threatening oversight.
On the personal level, Insisting on the Highest Standards means not taking shortcuts on things that are important. Before pre-Covid, my friend Jim had been working remotely for decades. When people were at interviews with him he always made sure that they weren’t wearing shorts to their interviews beneath their sports coats. He wasn’t trying to trip them up. He thought it was important for people to dress like they’re at work—even if they’re working from home. It shows a level of commitment to the standards of the job.”
Think Big (Draft Notes)
Thinking small is a self-fulfilling prophecy. Leaders create and communicate a bold direction that inspires results. They think differently and look around corners for ways to serve customers.
When you look at some of Amazon’s biggest successes, like AWS, Kindle and digital media, and Prime, it’s hard to wrap your mind around how a company that started as a bookstore built this business. How could these businesses even exist? Someone had to envision this huge business and work tirelessly on what might have seemed like a fools’ errand. As Bill Carr, the original head of Kindle said, “This could either mean getting one of the best seats on a rocket ship or working for years on a small business that never gets off the ground.”(15)Bryar, Colin. Working Backwards (p. 163). St. Martin’s Publishing Group. Kindle Edition.
Let’s take a trip back and time and visit Amazon in 2004, before it created its powerhouse loyalty program: Amazon Prime. Amazon had lost some of its luster. It was mainly selling books and DVDs, and while it was growing, its rate of growth was slowing down significantly. It was being attacked by its far larger brick-and-mortar rivals like Best Buy and Barnes & Noble.
While Amazon offering a superior selection and great prices, it had a big problem delivering these things fast. How could Amazon offer a shopping experience so compelling that you could buy almost everything you wanted, it would get it to you more quickly and cheaply (including shipping) than your neighborhood store.
Jeff says that the initial finance models for Prime were horrifying because shipping is expensive and that people love free shipping. He said, “It cost us a lot of money because what happens when you offer a free all-you-can-eat buffet? Who shows up to the buffet first? The heavy eaters. It’s scary. It’s like, oh my god, did I really say as many prawns as you can eat?”(16)Invent and Wander (pp. 206-207). Harvard Business Review Press. Kindle Edition.
Amazon made many tweaks to its system. They located more fulfillment centers closer to customers to reduce air shipping costs. They would only ship small items 2-day if they were add-ons to another order. For large bulky orders, you’d still get free shipping but it wouldn’t be 2-day. By this time the transformation was complete, Amazon completely changed the way people shop. Amazon is now an alternative to the immediacy of brick-and-mortar stores. It’s now possible to buy everything, both online and offline, from Amazon by default.
How Amazon Finds Black Swans
The Black Swan is one of Jeff Bezos’s favorite books. He’s even had all of his directs read it. In the book, Nicolas Nassim Taleb, describes black swan events as rare events that come as a surprise to most observers, but are “obvious” in retrospect. Betting on black swans like Prime, AWS, or digital media have huge upsides if they work but the bets fail more often than they pan out.
But how can you make this work for you? After Black Swan, Taleb expanded on this principle in his book Antifragile. Being antifragile is about more than being robust. You have fragile things that break if they’re shaken. You have robust things that don’t break when they are shaken. And you have anti-fragile things that actually get stronger when they are shaken.
Embracing antifragility can be very powerful. These are times when the uncertain upside is larger than a more common downside. Think about going to a party. The downside is fixed, a wasted night. The upside is big though unlikely. You could make a lifelong friend or a new business partner. I met my wife at a party that she didn’t want to go to. She was out for the entire day and it was raining, but her mother told her to go to every party she was invited to because you never know who you’re going to meet.
Bias for Action (Draft Notes)
Speed matters in business. Many decisions and actions are reversible and do not need extensive study. We value calculated risk taking.
As organizations get larger they tend to get more risk-averse and slower to make decisions. A trillion-dollar company like Amazon has a lot to lose so they want to protect that giant business. You’d want to make sure that you were making all the right decisions. You’ve also built this great leadership team with superb experience. Wouldn’t you want to consult them on all of the key business decisions? All of these things show down the decision making process.
Amazon is very aware of this problem and actively pushes down decision-making to the most appropriate level. It’s quite shocking when you think about it. A huge company like Amazon letting junior people make decisions? There’s no place you think that centralized command and decision-making would be more relevant than the army. However, even the US Army under Stanley McChrystal, former leader of Joint Special Forces (JSOC), realized that empowering his lower-level troops was key to fighting terrorists.
To make make decisions quickly, Amazon defines the concepts of one-way and two-way doors. At the seniormost levels of a company decisions may be one-way doors but it’s important that more junior employees don’t mirror this decision making process for all decisions.
- One-way doors: These are the really big decisions. Once you make them, you can’t go back easily. At the seniormost levels of a company decisions may be one-way doors, but it’s important that more junior employees don’t mirror this decision making process for all decisions.
- Two-way doors: These are decisions that can be made, and if they’re not the right decisions can be easily course corrected or unmade. Most decisions are two way doors. Two-way door decisions should be made with about 70% of the information you wish you had. Waiting for more information makes you slow not just in making this decision, but also in making the next decision when you inevitably need to course correct.
You’ll never be able to fix all of a customer’s problems. As Jeff says, “customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great.” which means that the goal post is constantly changing. As companies create new products, customers change their expectations. Before FedEx nobody absolutely needs it to have a shipment the next day. Before Prime, nobody thought that they should expect free two-day shipping. I call this the WTF effect. When people see the technology for the first time they say, “WTF, this is amazing! I can’t believe this exists.” But after they get used to it, they say, “WTF, I can’t believe you can’t do this for me!”
Frugality (Draft Notes)
Accomplish more with less. Constraints breed resourcefulness, self-sufficiency, and invention. There are no extra points for growing headcount, budget size, or fixed expense.
Frugality is one of the most important and misunderstood Leadership Principles. People think of Amazon’s Frugality as being cheap, which isn’t true. Frugality is about spending money in the best way possible. The iconic Frugality story is about the famous door desks. I saw these when I first interviewed in 1998. Doors were made out of doors propped up in 4x4s. Jeff was looking for desks in the early days of Amazon but found them to be expensive. Then he realized that we could buy doors from across the street at Home Depot and build his own desks more cheaply.(17)I guess IKEA wasn’t around at the time because today I can get a desk for $40 at IKEA which is way cheaper than buying a door.
But there’s a second part of that story. A number of years later, an Amazon employee in Europe was setting up a new Amazon office. He couldn’t find doors locally to make the door desks so he had them shipped from far away. This was far more expensive than just buying desks for the office. When Jeff found out about this he fired him for his lack of frugality.
Amazon is also famous for never payment for any upgrades on air travel. They will only pay for each. If Jeff wants to fly in a private jet, he uses his private jet because Amazon doesn’t have a plane for executives. You can upgrade to first class using points or your own money. However there is a small exception to this rule. After flying to India and back in Japan and back, I had flown four legs of more than 14 hours. This classifies me as an “Amazon Frequent Traveler” which meant that for the next year, for trips of more than 14 hours, Amazon would upgrade me to Economy Plus.
Furgality is being thoughtful about how you use your resources. I learned this when I needed to lose a few pounds. When I was at Citibank, they had one of these enormous cafeteria salad bars. I had the choice of two sizes to place my salad: the meal size and the side salad size. I would get the meal-size salad and halfway through I was fighting the salad, struggling to finish it. So I did an experiment and took the side salad container instead. What a difference it made! Instead of saying, “I’d like some meatballs and some melon and some pasta,” I would say, “I’d like two meatballs, and four pieces of melon, and seven blueberries, and a little bit of pasta to cover the meatballs.” That made me really appreciate the food that I was eating and it also cut quite a few pounds off of me.
Frugality is about prioritizing tasks. There’s a lot of good techniques that we can use for prioritizing tasks. I’ve included these at the end of this article. And just in case you think that prioritization means that things can never be fun, I’ll end with the story about When it Makes Sense to Prioritize Going for Ice Cream.
Earn Trust (Draft)
Leaders listen attentively, speak candidly, and treat others respectfully. They are vocally self-critical, even when doing so is awkward or embarrassing. Leaders do not believe their or their team’s body odor smells of perfume. They benchmark themselves and their teams against the best.
Trust is about building long-term relationships with customers. Jeff says, “I know of a couple who rented out their house, and the family who moved in nailed their Christmas tree to the hardwood floors instead of using a tree stand.” This type of relationship is very transactional. No one looking to build a long-term relationship would make such a short-term sacrifice to the detriment of the relationship.
Not nailing your Christmas Tree into the ground is an easy decision. But what about times that you need to buck the current thinking to become a truly trustworthy partner.
Shortly after launching Amazon.com in 1995, we empowered customers to review products. While now a routine Amazon.com practice, at the time we received complaints from a few vendors, basically wondering if we understood our business: “You make money when you sell things—why would you allow negative reviews on your website?” Speaking as a focus group of one, I know I’ve sometimes changed my mind before making purchases on Amazon.com as a result of negative or lukewarm customer reviews. Though negative reviews cost us some sales in the short term, helping customers make better purchase decisions ultimately pays off for the company.Invent and Wander (pp. 64-65). Harvard Business Review Press. Kindle Edition.
A lot of it has to do with Amazon’s brand. A brand sets expectations of what a customer will get from the company. Amazon’s brand is now so broad that it gives it the right to sell many different types of products because everyone knows that Amazon will give a great experience, low prices, and superior customer service. This is true whether it’s Amazon is a bookstore, great television shows, and the world’s top-selling smart speaker.
Brands set the customer expectation and work to fulfill this. A great tech brand, like Amazon or Airbnb work behind the scenes to meet that expectation. I wrote about how Airbnb changed the game by created an incredibly strong relationship with its customers. Before Airbnb, customers would have a very specific understanding of, say, a Mariott Courtyard. This would be the same Mariott Courtyard with the same expectations in Scottsdale or Shanghai. But AirBnB changed this whole calculus. Customers don’t need to know exactly what they’re going to get. They just need to have an agreement with customers that lets the customers have a great experience. I’ll go into the more general version of this concept, what Ben Thomson calls Aggregators. Aggregators are what lets big tech companies dominate a market.
Dive Deep (Draft Notes)
Leaders operate at all levels, stay connected to the details, audit frequently, and are skeptical when metrics and anecdote differ. No task is beneath them.
Amazon is all about diving deep to understanding the true nature of a problem and come up with a great solution. At Amazon, people don’t settle with “I have a problem” or even, “I have a problem, and here’s an answer.” At Amazon, people dig deeper into the problem all the way down to the root cause of the problem. One technique for doing this is called The 5 Whys. This is one of the continuous improvement techniques that came from Japanese manufacturing. This isn’t something most companies are willing to do.
Diving deep is also about looking beyond the basics to find the underlying nuance. For example, in banking, you’d think that consumers would view debt as a bad thing. It’s always better to save money than to spend money right? But when I was at Citi I learned that so much of this is about framing. By positioning a product in a certain way, we could get companies to focus on certain aspects of spending. For example, I met a couple who told me they were saving a lot of money on Netflix because they didn’t need to rent movies from Blockbuster even though they spent more money on Netflix than they spent renting tapes at Blockbuster.
You can also dive deep in your own neighborhood, even in your own backyard. During the 2020 pandemic, we left New York City and camped out at my parents’ house. They have a small backyard where I’d meditate every day. I’d stay there for half an hour and take in their flowers, a koi pond, the dew, and the early morning light. After sitting there for a few weeks, I started to see the backyard as its own little world where I could experience nature.
Meditating in the same place every day near sunrise, I’ve come to realize the difference a few minutes make. There are times where a thin beam of morning light highlights a small piece of slate, giving it a majestic glow. Or for a few moments, a rising sun illuminates the spray of a small backyard waterfall creating a playful dancing fountain. There’s even a point when nature stops seeing me as a threat. Sitting still for 15 minutes I’d see squirrels run by me and butterflies land on my shoulder. This is experiencing nature far more than just taking a tourist trip to glance at the Grand Canyon.
Have Backbone; Disagree and Commit (Draft Notes)
Leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting. Leaders have conviction and are tenacious. They do not compromise for the sake of social cohesion. Once a decision is determined, they commit wholly.
When Amazon created its digital book business, there was a lot of disagreement on how to move forward. The key debate was whether Amazon should create its own device or outsource it. As the team was moving towards building a physical hardware device. Bill Carr, a founding member of the Kindle team, was in violent disagreement with Steve Kessel, the SVP in charge of the project and told him so:
“We’re an e-commerce company, not a hardware company!” I would insist. I thought we should partner with third-party equipment companies that were good at designing and building hardware and stick to what we knew: e-commerce. I regularly pointed out to Steve that he knew nothing about hardware—he wasn’t a gadget guy, and his ancient Volvo didn’t even have a car stereo.Bryar, Colin. Working Backwards (p. 178). St. Martin’s Publishing Group. Kindle Edition.
Eventually, the decision was made to go forward and build the device and Bill committed to the new plan. He eventually realized that Amazon needed to either build or buy this capability. This was going to be a core capability that was going to be central to Amazon’s future. It wasn’t something Amazon could outsource.
Disagree and Commit is the scariest principle in the Amazon interview but one of the most important in real life. It’s about having “hot fights” rather than “cold wars.” In a typical company, there are meetings where people discuss what to do, bring large piles of analysis, and then go back to do more work. I remember working at one company that was notorious and after a year of lollygagging said, “Look how much money we saved. Our competitors all launched products that failed while we were discussing this project.”
While this principle seems out of the ordinary, we see it all the time in elections. When an election comes about in the US, both sides are literally fighting for the most important things in our lives. Whether it’s abortion, climate change, taxes, war, or anything else, the two candidates have horribly vicious fights. However, once the election is over, everyone agrees that this is the result and they agree to move forward with what’s happened. This is the heart of Disagree and Commit.
But Disagree and Commit requires that you subscribe to the system. If you have a problem he will bring it up in the meeting and have a discussion about this. This may be a very heated discussion but it’s about the idea is not about the person. Then, what’s the decision is made everyone agrees to that idea. This allows the company to move forward because there’s no second-guessing after the fact.
Building trust in the system is key. We need to rely on the underlying systems of Amazon’s decision-making. Similarly, we need to be able to rely on our computer systems. Computers need to be able to trust the different components of the system. There are some wonderful examples of computers and trust. Ken Thompson, one of the pioneers of computing, discussed this in his 1984 lecture Reflections on Trusting Trust.(18)Ken Thompson gave Reflections on Trusting Trust as his Turing Award lecture in 1984. The Turing Award is can be thought of as the Nobel Prize of Computer Science. Thompson said if you don’t trust your underlying platforms, people can place bugs there that you can never find. A more recent example is the Solar Winds hack where the hackers placed malicious code in the software, preventing Solar Winds from removing the hack even after it was discovered.
Deliver Results (Draft Notes)
Leaders focus on the key inputs for their business and deliver them with the right quality and in a timely fashion. Despite setbacks, they rise to the occasion and never settle.
When I was at Amazon, Deliver Results was the last of the 14 Leadership Principles. The LP’s started with Customer Obssession and ended with Deliver Results. Everything in between was how you got from one to the other. That’s still true about Amazon as a whole. The additional two leadership principles are less about Amazon and more about how Amazon deals with the world. They’re really an addendum to the initial leadership principles.
The key here is that you need to define the results for yourself. What is the life that you want and how are you going to get there. Now that I’m in my 40s many of my friends are talking about planning for retirement and how they cannot make enough money to get there. However, retirement is more than that. It’s about what kind of life do you want to lead if you don’t have to worry about money.
You’ve got to set the right mindset and metrics for your results and the metrics you want to deliver on. Amazon is famous for delivering long-term value. Most companies look to optimize the stock price at the expense of long-term gains. Jeff has never done that, even deciding not to attend investor earnings and leaving that for the CFO. This has led to a bit of a contentious relationship with investors, some of whom have called Amazon a charity for the benefit of consumers funded by investors.(19)There’s a bunch more articles here.
So how can you be more like Amazon and chart your own path? I think it’s a lot about determining the results that you want at the end of your life. If you could lead the perfect life for you, what would it be? I’ve written about my ideal retirement plan and some of these components of that plan. It’s about determining what you want in life, not what you’re supposed to want. There’s no perfect plan in life, no perfect spouse, and no perfect job.
Strive to be Earth’s Best Employer (Draft Notes)
Leaders work every day to create a safer, more productive, higher performing, more diverse, and more just work environment. They lead with empathy, have fun at work, and make it easy for others to have fun. Leaders ask themselves: Are my fellow employees growing? Are they empowered? Are they ready for what’s next? Leaders have a vision for and commitment to their employees’ personal success, whether that be at Amazon or elsewhere.
When Andy Jassy took over the reins at Amazon as its second CEO, we got two new Leadership Principles changed. These new principles have a fundamentally different character than from the previous ones. The rest of the Leadership Principles have stayed the same since Jeff’s first shareholder letter, before they were even called Leadership Principles. Even when the leadership principles were updated slightly to add to “Learn and Be Curious” it was a minor update. Also, Jeff required that another principle be removed because 14 principles was all a company should have.
The Leadership Principles were always focused on helping Amazon maintain a culture of “Day 1.” “Day 1” was always key to the thinking at Amazon. It’s the ability to act like Amazon did on its first day, to make smart, fast decisions, stay nimble, innovate and invent, and focus on delighting customers. No matter how big the company gets, Jeff wants to make sure the company is always thinking like a startup. Jeff’s office is in a building called “Day 1.” When he moved buildings, they changed the name of his new building to “Day 1.” Amazon teases new recruits that say, “It’s my third day at Amazon,” by replying “It’s always Day 1 at Amazon. In his 2016 Letter to Shareholders, Jeff devotes the whole letter to “Day 1.”
“Jeff, what does Day 2 look like?”
That’s a question I just got at our most recent all-hands meeting. I’ve been reminding people that it’s Day 1 for a couple of decades. I work in an Amazon building named Day 1, and when I moved buildings, I took the name with me. I spend time thinking about this topic.
“Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”
To be sure, this kind of decline would happen in extreme slow motion. An established company might harvest Day 2 for decades, but the final result would still come.Amazon Letter to Shareholders 2016
The Leadership Principles were about Amazon being a young up-and-comer fighting against the big guys. This is what Jeff writes about in his love memo. Even if the company gets bigger how do you maintain that focus on a small company that drives everything forward?
But now Amazon is now one of the largest companies in the world. The next two leadership principles focus on the challenges that being such a large company have. You can look at each Leadership Principle as having a specific undertone. This one is clearly about avoiding unionization and the next one is about avoiding anti-trust.
I’m not sure what to put at the end of this section. Maybe I’ll write about while clearly is about avoiding the unionization push it’s also about being a friendlier place to work. My friend Peter Temes believes that Amazon needs to change it’s policies to attract the best talent, though I’m not sure about that. Though they may need to change their policies as the stock can’t go up forever.
Amazon definitely could be nicer. That’s the thing that I always thought was missing from the Leadership Principles. The other 14 principles are about effectiveness, and about Amazon and it’s customers. This one is about being nice and friendly, thing missing from the other principles. Ideally, Amazon should give you the feeling of being a great friend, like I wrote about here.
Success and Scale Bring Broad Responsibility
We started in a garage, but we’re not there anymore. We are big, we impact the world, and we are far from perfect. We must be humble and thoughtful about even the secondary effects of our actions. Our local communities, planet, and future generations need us to be better every day. We must begin each day with a determination to make better, do better, and be better for our customers, our employees, our partners, and the world at large. And we must end every day knowing we can do even more tomorrow. Leaders create more than they consume and always leave things better than how they found them.
There’s a lot of ways it’s not “Day 1” at Amazon anymore. Amazon is huge! Its revenue is larger than the GDP of Pakistan.
All of the big tech companies are immense. Facebook has recently created a multi-country supreme court to deal with questions like “Should Donald Trump get his Facebook account back?” To have a fight between a tech company and a sitting president of the United States where the tech companies winning is kind of crazy.
This brings up the whole question about anti-trust. In the US antitrust is based on a fundamental preference towards smaller businesses. For the rest of the section, I’d like to write about the history of anti-trust in the US and how things are different today. I’ll pull mainly from Ben Thomson’s Stratechery blog. Ben’s premise is that the current massive tech companies are fundamentally different from the kind of monopolies from 100 years ago. The old version of a monopoly would be Standard Oil buying up all of the competitors so they could raise prices. The big tech companies buy up competitors but the end goal is not to raise prices. In fact, companies like AWS are more likely to lower prices than to raise them. Big Tech buys competitors to continually make better and better products for consumers.
So what needs to happen now? What should the future of Anti-trust look like? Stratechery has some great ideas that I’ll expand upon. But the key fight for Amazon will be, “Can Amazon make the case that a bigger and bigger Amazon will be better and better for the US overall?” It will be a big change for the way the US views competitiveness but it may not be a bad one.
Conclusion (Draft Notes)
Amazon is the king of giving people more of what they want. Amazon is always focused on lowering prices, increasing selection, and faster shipping. Amazon is always looking to make these things better because, as Jeff says, “customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great.” Customers will always want these things to be better. They will never say that Amazon should charge more, deliver things more slowly, or have fewer options. These are all good things. All of these things are frustrations, and getting rid of them makes people happy.
Today you can buy your clothes, watch your movies, and get your groceries all on Amazon. You could live your entire life on Amazon. I bet I can expand this and find a person who did live their entire life on Amazon.
Human beings want more of everything. We are on a hedonic treadmill that says, “What I have now is OK, but I really want more—more stuff, more money, and more friends. That would make me happy.” From a societal perspective, the hedonic treadmill has some benefits. It keeps us on our toes and moves society forward. It also gives lots of people jobs. If people didn’t want more Oreos, no one would have jobs selling Oreos at the grocery store, or stocking the Oreos on the shelf, or making new kinds of Oreos.
But having more isn’t always better.(20)More stuff doesn’t make you happy. Just ask Professor Laurie Santos who has talks about how more money and stuff don’t make you happier. We conveniently overlook that there’s a trade-off to having more of something. When you have more of one thing, you have less of something else.(21)Oddly enough, there’s a trade-off that when you have more money, you want even more money. Let’s look at supertasters— people whose taste buds are far more sensitive than the average person. They can pick up nuances in food that most of us can’t imagine. They make great food critics. But though they can taste the highest of highs they can also taste the lowest of lows, which is one trade-off. The other one is that they can’t stand spicy foods because it overwhelms their taste buds.
We don’t like thinking about trade-offs. We can go to tremendous efforts to avoid uncomfortable things even when they’re obvious. When I was at Amazon, Jeff hosted a town hall and told the company that “One day, Amazon will fail’ but our job is to delay it as long as possible”. It’s interesting that the press picked up this story because it’s the most “non-story” that you can have. It’s like Jeff saying “I’m going to die one day.” No one wants to think about that happening, but it’s going to happen. I realized that we all pretend that these things don’t happen, but people only live so long.(22)Wouldn’t it be great to live forever? Sounds great, doesn’t it? First, we should start with giving you immortal cells. The problem with cells is that they have these counters called telomeres. The telomeres tell the cell to only divide 50 times and then it dies. But there are some cells that never die and don’t have this telomere problem so we’ll just give you those. As it turn out, these cells do exist, but you probably don’t want them. The only cells that don’t die are cancer cells. There’s only so much that you can do. That’s why you need to think about the trade-offs that you have to make. Otherwise, they’ll be made for you.
So at the end of the day realize that Amazon is a tremendous tool for making you happier helping save time making your life better. However, if you’re not careful you become a tool of Amazon and just a giant cog in the machine that is Amazon and consumer culture in general. Amazon is such a powerful tool that it’s almost like a drug. Think of it like caffeine—something that should be enjoyed in moderation.
None of this is to say that Amazon is a bad thing. All of these principles are tools that you can use or discard. In his book, Luxury Fever, Robert Frank says that those who think money can’t buy happiness just don’t know where to shop. By focusing on time and energy on things that actually make us happy vs trying to get more stuff, we can lead much happier and more fulfilling lives.
- Amazon’s Leadership Principles
- Letters to shareholders (Wander Book)
- Dave Anderson Letter
- Season 1 of Land of Giants (Amazon) — listen to this
- Amazon Books Handout PDF
- Ahead in the Cloud
- The Everything Store and the other book
- Working Backwards
- The collected jeff Bezos..
- The Amazon Way
- Werner’s Blog
- Culture of Innovation Presentation — Google This… or maybe link to one…
- AWS Re:Invent Keynotes — how they break down by day…
- Summaries of Amazon’s lessons — was it in HBR?
- There’s one that maps LPs to shareholder letters.
- Carol Dweck’s Mindset Book
|↑1||Here’s the link for the book proposal for my writer friends. Also, here are some Notes for me….|
|↑2||Expand this in the book. Maybe add a quote from Tom Wolfe about Robert Noyce–maybe the one that Ben Horowitz uses in his new book.|
|↑3||The UK paper The Register refers to Google as “The Chocolate Factory” because it’s as weird and wonderous as Willy Wonka’s candy factory.|
|↑4||When the East Gardens were built in 1966, irises were transplanted for the iris garden of Meiji-jijgu, a shrine dedicated to Emperor Meiji, the great-great-grandfather of the current Emperor.|
|↑5||Bryar, Colin. Working Backwards (pp. 85-86). St. Martin’s Publishing Group. Kindle Edition.|
|↑6||As far as I can tell, this started with a Maria Popova story highlighting many of these reviews and then Amazon took ownership of the idea.|
|↑7||According to Herodotus, the giant cinnamon bird used cinnamon sticks to build their nests, which were fastened to sheer cliffs. The Arabian traders would leave pieces of oxen and other large game near the cinnamon bird’s nests for them to scavenge. When the meat was brought back to their nests, its weight would break the nests off the cliff, allowing the traders to gather the pieces of cinnamon.|
|↑8||I took this example of word count and the 80/20 rule from Joel Spolsky.|
|↑9||At Amazon this was called the NPI process and it prevented people from making changes in Obidos or any of the other major systems without approval.|
|↑10||I’ll expand more on the one-click story in the book.|
|↑11||In the book I’ll go more into this story.|
|↑12||2015 Shareholders Letter|
|↑13||Note that the future changes pretty quickly. I had a friend who was working off a 7-year-old BCG pricing strategy which management trusted because it was blessed by BCG.|
|↑14||I’ll talk about each of these things more in the book.|
|↑15||Bryar, Colin. Working Backwards (p. 163). St. Martin’s Publishing Group. Kindle Edition.|
|↑16||Invent and Wander (pp. 206-207). Harvard Business Review Press. Kindle Edition.|
|↑17||I guess IKEA wasn’t around at the time because today I can get a desk for $40 at IKEA which is way cheaper than buying a door.|
|↑18||Ken Thompson gave Reflections on Trusting Trust as his Turing Award lecture in 1984. The Turing Award is can be thought of as the Nobel Prize of Computer Science.|
|↑19||There’s a bunch more articles here.|
|↑20||More stuff doesn’t make you happy. Just ask Professor Laurie Santos who has talks about how more money and stuff don’t make you happier.|
|↑21||Oddly enough, there’s a trade-off that when you have more money, you want even more money.|
|↑22||Wouldn’t it be great to live forever? Sounds great, doesn’t it? First, we should start with giving you immortal cells. The problem with cells is that they have these counters called telomeres. The telomeres tell the cell to only divide 50 times and then it dies. But there are some cells that never die and don’t have this telomere problem so we’ll just give you those. As it turn out, these cells do exist, but you probably don’t want them. The only cells that don’t die are cancer cells.|