How customer obsession, Jim Collins's flywheel concept, and a Day One mindset keeps Amazon growing...and growing.....
Amazon is changing our lives, and every businessperson in the world wants to know either how it does it, how they can do it, or how they can survive it.
Amazon and its founder Jeff Bezos, the richest person on earth and becoming richer every minute, is the subject of Bezonomics by Brian Dumaine.
Here's a one-page summary of Brian's extensively researched book.
Amazon's Day One mantra
At Amazon, every day is considered “Day 1” – so complacency doesn’t set in.
Founded in 1995, Amazon’s mission is to make its customers lives better.
Customer obsession is the fuel for Amazon's flywheel model (a concept from Jim Collins’s book Good to Great, and taught to the executive team by Jim himself in 2001).
• Lowering costs for customers which….
• Increases the number of customers which……
• Attracts more third party sellers which……
• Leads to more revenue for Amazon which……
• Helps lowers costs for customers which…….
Sophisticated artificial intelligence spins the flywheel even faster. Today, 35% of online revenue comes from product recommendations from the AI-produced algorithm. Amazon wants to be the smartest company in the world.
This is “Bezonomics” – the building up of AI technological skills to know what customers want and do.
3 characteristics of Jeff Bezos:
1. He believes that resourcefulness is the greatest virtue
2. He faces the truth no matter where it leads him
3. He is a visionary who thinks in terms of not years but decades and centuries
• Employees pitching an idea for a product must present a 6-page document on the long-term impact of the project and why it’s meaningful to customers.
• Underlings at Amazon can challenge higher ups in search of the truth.
• Research & Development is pervasive through the company, and Bezos is not afraid of failures per se, saying innovating for major breakthroughs requires it.
Amazon-proofing your business:
• Create an amazing in-store experience that digitally merges with an amazing online one;
• Offer a highly curated selection of exclusive products;
• Invest heavily in technology, including mastering social media, and
• Double down on a social mission, in a way that makes customers feel good buying from you.
Amazon’s foray into other industries:
• Amazon is after industries where costly human labour and thinking can be replaced by smart machines.
• Amazon organically builds businesses in new sectors, using acquisitions to acquire talent or technology.
• Amazon also looks at internal core competencies and monetises them (eg. AWS cloud computing, and advertising - where it’s gaining on Google, Facebook and Alibaba).
• In its sights - health care (including telemedicine), insurance, pharmacy, banking, computer chips, electric vehicles, satellites and more.
Members of The Growth Faculty can watch our interview with the author of Bezonomics, Brian Dumaine, by logging into the member platform.
Members also receive substantial ticket discounts, plus receive a host of other benefits including access to exclusive interviews with bestselling business authors. To become a member, click here.