Wednesday, January 8, 2014

Tim O'Reilly on Everything Store

Tim O'Reilly reviews Brad Stone's history of Amazon, The Everything Store: Jeff Bezos and the Age of Amazon:

One of the things the book gets across is what a great learner Jeff is. It makes clear just how freshly he responded to the challenges of growing his business, relying on some uncompromising principles but also adapting them so that, as long-time Amazon employee Rick Dalzell described, he always engaged his decision-making around "the best truth at the time." (Chapter 9, page 267) His intense curiosity is one of the most striking things about him.

The book also underplays Jeff's humanity, humor, and kindness. There are a lot of stories of how forceful, even abrasive, he sometimes is with subordinates - and I imagine that can be unpleasant.  But I also know just how hard it is to get thousands of people moving in the same direction without ruffling any feathers. And some of the changes that Jeff had to make to the company direction required enormous determination and force. I wish that some other leaders I know (e.g. in government) had equal clarity and determination.

The book also really helped me see how deep Jeff's focus on the customer is. While I have always believed that focus to be sincere, I have also always worried that it would fade as the company became dominant, as is so often the case.  But the book makes clear again and again how it really is a touchstone for Jeff.

I have also worried that focus on the customer isn't enough - that companies that become as powerful as Amazon also need to understand the complete ecosystem in which they operate.  The book's account of Amazon's sometimes brutal interactions with companies that it wanted to acquire, like Quidsi, the company behind diapers.com (page 298), and suppliers like German knife-maker Wusthof (page 300 and ff) makes clear that Amazon hasn't fully learned that lesson, and seems to believe that as long as customers benefit, it's ok to hurt suppliers. Sometimes that is true, when suppliers are inefficient or exploitive of their customers, but in other cases, squeezing all the profit out of suppliers' businesses is enormously short sighted.  The ideal ecosystem is one where everyone flourishes, not where one company flourishes at the expense of all the others.

But I got a lot of hope from reading about Jeff's "Amazon.love memo" (Chapter 10, page 317-318), in which he analyzed why some big and powerful companies are hated, while others continue to engender love from not only their customers but their entire ecosystem.  In particular, I liked that one of the principles that Jeff distilled was this one:

"Capturing all the value only for the company is not cool."


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