Test through Externalizing

Amazon opens up their own internal tools and services, not to make money, but to use of the market to test whether their internal tools are as good as they can be.

If no one outside would pay for it, it could mean it is solving a problem that doesn’t exist.

That fascinating fact is what Zach Kanter’s piece, Why Amazon is eating the world points out.

… the “extra revenue” here is great — but the real value is in honing Amazon’s internal tools.

If Amazon Connect is a complete commercial failure, Amazon’s management will have a quantifiable indicator (revenue, or lack thereof) that suggests their internal tools are significantly lagging behind the competition. Amazon has replaced useless, time-intensive bureaucracy like internal surveys and audits with a feedback loop that generates cash when it works — and quickly identifies problems when it doesn’t.