Jeff Bezos on Wandering, Experimenting, and Scale

Jeff Bezos’s 2018 letter to shareholders is required reading, as usual. Here are some gems:

On wandering vs efficiency:

Sometimes (often actually) in business, you do know where you’re going, and when you do, you can be efficient. Put in place a plan and execute. In contrast, wandering in business is not efficient … but it’s also not random. It’s guided – by hunch, gut, intuition, curiosity, and powered by a deep conviction that the prize for customers is big enough that it’s worth being a little messy and tangential to find our way there. Wandering is an essential counter-balance to efficiency. You need to employ both. The outsized discoveries – the “non-linear” ones – are highly likely to require wandering.

On product development and listening to the customer vs inventing on their behalf:

Much of what we build at AWS is based on listening to customers. It’s critical to ask customers what they want, listen carefully to their answers, and figure out a plan to provide it thoughtfully and quickly (speed matters in business!). No business could thrive without that kind of customer obsession. But it’s also not enough. The biggest needle movers will be things that customers don’t know to ask for. We must invent on their behalf. We have to tap into our own inner imagination about what’s possible.

AWS itself – as a whole – is an example. No one asked for AWS. No one. Turns out the world was in fact ready and hungry for an offering like AWS but didn’t know it. We had a hunch, followed our curiosity, took the necessary financial risks, and began building – reworking, experimenting, and iterating countless times as we proceeded.

Ross Mayfield’s tweet on this is also worth noting:

On scaling and failed experiments:

As a company grows, everything needs to scale, including the size of your failed experiments. If the size of your failures isn’t growing, you’re not going to be inventing at a size that can actually move the needle. Amazon will be experimenting at the right scale for a company of our size if we occasionally have multibillion-dollar failures. Of course, we won’t undertake such experiments cavalierly. We will work hard to make them good bets, but not all good bets will ultimately pay out. This kind of large-scale risk taking is part of the service we as a large company can provide to our customers and to society. The good news for shareowners is that a single big winning bet can more than cover the cost of many losers.

Baselines and Narratives

I haven’t read Jonathan Allen and Amie Parnes’s Shattered about Hillary Clinton’s failed presidential campaign, but I have found the reviews and their virality fascinating. Here’s what the New York Times, National Review, and Rolling Stone had to say. The Amazon.com reviews are mediocre at best.

There is something lurid and compelling about reading a retrospective about a failed campaign. It’s like looking at a train wreck — it’s hard to tear your eyes away, even if you want to. Unlike a train wreck, however, it’s hard to assess how “bad” Clinton’s campaign actually was, and what I’m reading about the book doesn’t seem to help.

In my experience working with organizations and their leaders, including some very good ones, there is a baseline of dysfunction that would surprise most people. Internal effectiveness and good strategy matter (which is what keeps me employed), but they’re not the only factors that contribute to success. You have to be very careful about attribution bias, especially when dealing with complex, systemic challenges.

So far, most of the retrospectives and commentary I’ve read have reeked of attribution bias.

The one thing that stuck out for me in reading the reviews were the points about Clinton’s lack of a clear narrative. The National Review, for example, wrote:

In Shattered, we learn that ten speechwriters, consultants, and aides had a hand in writing Clinton’s announcement speech, which unsurprisingly turned out to be a long, muddled mess. Obama speechwriter Jon Favreau, briefly brought in to help, concluded that the speech (and by extension, the whole campaign) “lacked a central rationale for why Hillary was running for president, and sounded enough like standard Democratic pablum that, with the exception of the biographical details, could have been delivered by anyone within the party.”

Again, I see this all the time working with leaders. It’s hard to identify a clear and compelling narrative and to stay on message, but it’s important. In their book, Made to Stick, Chip and Dan Heath attribute this challenge to the Curse of Knowledge. Effective leaders have lots of knowledge, but that knowledge can get in the way of telling a clear story.

Borders and the New Age of Books

Borders declared bankruptcy this past week, and it’s closing a number of stores in the Bay Area. I was running errands yesterday and was near the San Mateo store, so I decided to drop by and prowl about for deals.

It was an absolute madhouse. Parking was just about impossible, and the purchasing line snaked around the entire store. It was nice in a way to see that so many people still valued books.

Which is a good thing, because even at 20-40 percent discounts throughout the store, I couldn’t find a single good deal. I found a bunch of books that I wanted to read, scanned their barcodes on my phone, and saw that Amazon.com was selling all of them for cheaper, even with the Borders discount.

Frankly, that’s old news. The real game changer is Amazon.com’s distribution model and the Kindle.

I love traditional books — the feel, the smell, the timelessness. I remember visiting the Lincoln Museum years ago and staring in wonderment at his Bible, the actual, physical book that he had lovingly thumbed through as a child. I have a huge collection of my own books, and the thought of getting rid of any of them pains me.

That said, my parents got me a Kindle for Christmas last year, and I am absolutely in love with it. As much as my sentiment lies with traditional books, the reality is that the Kindle has got me reading books again. The screen is a marvel, it’s lighter and more comfortable to read than most of my real books, and I can carry a whole slew of books on it. The companion case is worth the extra price for the built-in book light alone.

Here’s how dramatically Amazon.com has changed the book industry. While scanning for books on my phone, I could easily have purchased one immediately with one click and had it sent to my Kindle automatically. Much easier than waiting in that monstrous line, and much more portable.

If I had wanted to, I could even have read the book on my phone. This sounds painful to me, but I’ve heard from others that they often read books this way, and that — as with my experience with the Kindle — they’re reading more as a result.

Barnes and Nobles might be late to the game, but it’s adapted, and it has a chance. Borders is done. It has not proven an ability to adapt with the times.

The real question continues to be, what’s the future of the local, independent book store?

I don’t think the death knell is a sure thing. I viewed the Borders discounts with scorn, but the reality is, I often pay more for books at Green Apple Books, even though I know I can get them cheaper at Amazon.com. It may be irrational, but I’m not alone. I like going there, even if books are more expensive. The opportunity is for local bookstores to leverage what’s magical and important about them — namely, the customer experience — and adapt it to the times.