📖 The Everything Store

2013. Brad Stone

I just finished reading Brad Stone’s book about Jeff Bezos and the story of Amazon. It’s a fascinating read packed with many many lessons but I wanted to just take note of two quick ones from it.

SWAT teams

Bezo’s preference for “two pizza teams” is well known. But until reading the book, I hadn’t really grasped how central these SWAT teams were to the perpetual innovation inside Amazon.

Take AWS for example. Although the legend of it’s inception is told a few different ways, it was essentially the idea of one engineer Benjamin Black, who co-authored a proposal with his manager Chris Pinkham. This was green-lit, a SWAT team assigned to it, and that business alone generated over $5 billion in revenue in the fourth quarter of 2017, representing annual revenue of more than $17 billion.

Another example is Amazon Prime. Again, an engineer named Charlie Ward used an employee-suggestion program called the Idea Tool. He proposed a speedy shipping club with a monthly charge for consumers whose needs were time sensitive and who weren’t as price conscious.

The proposal was upvoted to Bezos, who saw the potential, and assigned a SWAT team to it. The book tells the story of how he immediately assembled two leads to meet him at his house that weekend. He told them to put together a dozen of their best people, and to have something ready for release in just a few weeks. And again, Prime of course was a huge success and the driving force behind their recent $1 trillion market cap. Not only does the subscription fee generate almost $7.5 billion in annual revenue, but Prime members also then go on to spend almost twice the amount of money than other Amazon customers do.

These are two of their bigger success stories, but there were seemingly hundreds of these bets for which teams were quickly spun-up to test, and disbanded when they failed. But Amazon’s process for capturing the best ideas, testing their viability in a controlled way, and then quickly reallocating resources when positive results emerge, is very impressive.

The Institutional No

Another quick takeaway was Bezos’ wariness of what he called the institutional no. Amazon was constantly breaking new ground, particularly in the early 2000s when they were relentlessly taking risks outside of their core business of retail. Through this time Bezos would openly talk about battling any and all signs of internal resistance to unorthodox moves.

Even strong companies, he said, tended to push back against moves in unusual directions. At quarterly board meetings, he asked each director to share an example of the institutional no from his or her own past.

The intuitional no is mentioned throughout the book as even their most ambitious leaders fall prey at various stages.

These were just 2 pages of 350. It’s worth a read.