Amazon and Alabama: Modern Day Goliaths
Twelve years ago, Nick Saban arrived in Tuscaloosa. In the eleven seasons since, he has gone on to win an unprecedented 145 games, six SEC championships, and five national championships. For the fifth consecutive year, Alabama is in the NCAA playoffs (which has only been around for five years). In each of the previous three years, Alabama has competed in the national title game.
Across the country, in Seattle, Jeff Bezos has been aggressively growing another powerhouse program. Since January 2007, when Nick Saban was hired, AMZN stock is up 43.6x, beating the S&P 500 by 2330%.
Although it was only 12 years ago, a lot has changed at the everything store. The one-time book store has launched Kindle (2007), Amazon Music (2007), acquired Zappos (2009), developed Echo (2014) amongst many other notable advancements. They have overtaken the Seattle skyline and ushered in a new era of technology through AWS cloud computing.
This dominance in respective fields draws two questions: 1. How did they do it? and 2. How can they be beat?
How They Did It:
Hire (Recruit) and Develop The Best: Amazon and Alabama both have out-recruited their competition. Alabama, for seven straight years 2010–2017, won the “recruiting national championship”. Amazon meanwhile has “hire and develop the best” as one of their 14 leadership principles. It has led to them hiring over 1,000 top MBAs in 2017 (according to WSJ), even if it takes beating market compensation to have the most talent on-board.
Develop a championship culture: Both Amazon and Alabama expect to win. They put a special emphasis on their culture, which isn’t “warm and fuzzy”, but instead is particular to their respective organizations. Both cultures instill discipline, Amazon has even been dinged for having a “purposeful Darwinism” approach to management. However, employees at Amazon and players at Alabama know what they are getting into when they join the program. Failure to integrate in the culture leads to a short tenure at each.
Invite competition and conflict: Although my time at Amazon wasn’t much like the infamous NY Times article, Amazon embraces debate. Every meeting is formulated to be a clash of ideas and smart people are intentionally put on opposing sides so iron can sharpen iron to ensure the best possible results. Meanwhile, the most talented team Alabama faces every week is their own practice squad. The battle for playing time is so intense, the SEC Offensive Player of the year of 2016 was just a backup by the 2018 season.
Adapt to the changing market: When college football became more offensive focused and acrobatic in recent years, instead of hiding from the shift, Saban made moves to embrace it. He hired Lane Kiffin to run the offense, and unleashed Tua Tagovailoa, instead of sticking with his proven and capable, game-managing quarterback (Jalen Hurts). This willingness to evolve has been demonstrated at Amazon too, as the company has gone from a lower margin marketplace to a high-margin provider of cloud computing and advertising (now the 3rd largest advertisement marketplace in the world) in recent years.
How They Can Be Beat:
Have a Running, All-Star at Quarterback: Cam Newton, Johnny Manziel, DeShaun Watson. All legendary athletes, and all have wins over Alabama. The reason, in my opinion, is that they forced Alabama out of their routine and made Alabama make spontaneous decisions through their improvisation abilities. If anyone in the country can beat Alabama this year it is OU with Kyler Murray at QB.
Amazon, likewise can possibly be beat by the agility and improvisation abilities of an all-star CEO. Although they focus their culture around a “start-up” atmosphere, the larger the company, the harder it is to quickly improvise. So, beating Amazon will require a company to make fast, decisive decisions that turn out to be right, keeping Amazon on their heels and using their size to their advantage.
Don’t Play Their Game: Going head to head with Amazon on something is a nightmare waiting to happen. They can out-spend at every turn and they have the manpower to crush any direct competition. So, if a start-up is going to win a battle, they have to find a game Amazon isn’t playing (at least yet), then quickly become the best at it. Similarly, when Alabama lines up against Wisconsin, or other defensive minded programs, they blow them to smithereens. Their most heated games are against teams willing to change the tempo and make Alabama play a type of football they aren’t comfortable with playing.
Although all empirical reigns do come to an end, David beat Goliath, Leicester City won the EPL, and Kansas beat Texas in Football, I wouldn’t want to be the one with money against either one of these two anytime soon.