The Biology of Amazon
More Organism Than Machine: A Musing on Amazon, Tech, Innovation & Who Gets to Build the Future
The “machine that builds the machine” may reflect Elon Musk’s vision for the Tesla car factory.
When it comes to how Amazon grows and innovates however, a more suited image might be the “organism that grows the organism”.
Much has been said about Amazon, how it operates, its business model, and its growth story.
Yet I think larger context themes about the company’s exceptionality have been under-emphasized. This includes the remarkable way it engineers growth and innovation at ever increasing scales.
At the same time, I am struck by the parallels I see between Amazon and biology.
From logistics to cloud computing, Amazon has built an increasingly varied, value add, and complex set of capabilities. Yet despite its size and the scope of its activities, it stays very much organism like: Amazon remains a strikingly integrated, synergistic, and adaptive whole.
This story is my attempt to explore these insights, and to do so by using ideas from biology itself. Along the way, I hope to offer fresh perspectives on the Seattle company’s astonishing ability to continually grow and innovate.
Before concluding, I will set aside the biology lens and introduce the idea of value surface. It will help me illustrate how good Amazon also is at maximizing the value of its innovations.
In closing, I will share the attributes that I think most uniquely define Amazon and some of the companies that will shape our future. Here, I will touch on the concepts of: builder supremacy, multi-modal value creation, and pre-adaptation.
But first, let me set the stage with a biology grounded metaphor. It will allow me to paint, admittedly in very rough strokes, some of the incredible technology developments that took place over the past 2 decades. This will then help me place Amazon’s most impactful invention to date into context and offer a jumping off point for the rest of this story.
Big Tech’s Evolutionary Relevance
In his book “The Symbotic Man” first published in France in 1995, Joel de Rosnay formulated the idea that technology developments, notably computers and networks, were facilitating the emergence of a macro organism, a cybiont, formed from the interconnection of humans and machines at a planetary scale.
De Rosnay argued that the advent of this macro organism followed the natural progression of life on earth, from lower to higher levels of organization, from cells into organisms, organisms into populations, and populations into ecosystems.
Over the past 2 and half decades since De Rosnay put these ideas forward, a few now iconic tech companies, catalyzed by the internet, have thrusted us into a stunning acceleration of that human and machine co-evolution he vividly depicted.
These companies have done so through only a few, yet momentous, planetary scale contributions.
Let me try and illustrate with a few crude metaphors, that build on De Rosnay’s planetary organism construct, the scale and impact of some of these achievements:
- Apple contributed synapses: if humans were neurons of the planetary organism, smartphones would be its synapses. Apple invented the product category in 2007 which has since been broadly emulated. In 2020 alone, nearly 1.6 billion smartphones were sold. Smartphones have become no less than the first near humanity scale physical point of interconnection between humans, machines and network. With us practically anywhere and anytime, these devices extend our biology.
- Google created the planetary scale memory retrieval system: human knowledge is said to now double so quickly that it does so on a scale measured in only hours. Google continuously organizes this incredibly massive amount of information and, through its search engine, allows each and everyone of us to instantly tap into our collective knowledge and memory. Google handles no less than 3.5 billion searches daily. And to cite another stunning data point, a billion hours of YouTube videos are watched daily.
- Facebook contributed a planetary scale human network platform: with 2.7 billion users, Facebook developed the largest machine intermediated human to human interconnector besides the internet itself. Or, if we refer back to our humans as neurons metaphor, Facebook has enabled the formation of the most massive planetary neural network.
- Amazon, for its part, is contributing the body and more: unlike other tech company, Amazon is not just contributing to the digital brain or nervous system. Through its ecommerce business and operations it also uniquely contributes to the planetary organism’s muscular and skeletal system (mass storage and movement of goods) and circulatory system: delivery of goods (nutrients) all the way to the end consumers (cells) of this organism. It now employs no less than 1.3 million employees. And to focus only on its ecommerce activities: it has 2.4 million 3rd party sellers, 185 fulfillment centers globally, 50,000 vehicles, an airplane fleet, and ships over 5 billions packages yearly.
The significance of Amazon’s ecommerce activities, in this evolutionary discussion, is the scale and level of integration at which it fulfills the backend plumbing of some of the foundational civilization functions: establishing a market place and distributing goods, and achieving this to new standards of selection and speed.
And where it does not have geographic reach (yet), it has pioneered the ecommerce template that others have followed or evolved.
For all of Amazon’s impact through ecommerce, its role in accelerating the coming of age of software is perhaps of even greater evolutionary significance.
Amazon Web Services’ Evolutionary Relevance
In 2011, venture capitalist Marc Andreessen famously said that “software is eating the world”.
Although I would more optimistically say that software is (re)making the world, Andreessen’s arresting image brings home software’s seminal importance.
Software delivers no less than the ultimate digital functions used by humans and civilization. And it had come of age. In Andreessen’s words: “Six decades into the computer revolution, four decades since the invention of the microprocessor, and two decades into the rise of the modern Internet, all of the technology required to transform industries through software finally works and can be widely delivered at global scale”.
This brings us to what I would qualify as Amazon’s truly evolutionary scale invention: Amazon Web Services (AWS).
By inventing modern cloud computing, AWS drastically reduced friction in developing and scaling up software. And this may have been the single most significant modern development that unleashed software in the way Andreessen described.
Besides accelerating the delivery of “software as a service” and re-inventing enterprise computing, AWS created the substrate, if not the necessary conditions, for the advent and massive scaling of thousands of start-ups. AWS supported new crops of innovators, including the likes of Netflix, Twitter, Uber, or Airbnb, and many others that have changed our life styles in one respect or another.
And things might just have gotten started: AWS and other cloud providers are now standardizing access to Artificial Intelligence and Machine Learning, as well as Blockchain and Quantum Computing among other classes of potentially massively disruptive technologies.
With AWS, Amazon accelerated how innovation itself gets delivered. And it is keeping the pedal to the metal.
For all that thrust however, the advent of AWS itself, and more broadly Amazon’s growth and innovation path, has actually been more gradual than meets the eye.
Amazon’s Growth Logic: Iterative & Cumulative
Darwin references the latin aphorism natura non facit saltum — nature makes no leap — several times in his seminal book, On The Origin of Species. It supported his view that species develop from earlier species through gradual changes rather than through the sudden emergence of new forms.
As we will see, these principles also apply to the story of Amazon’s key developments: it has also been strikingly iterative and cumulative, with each development building on each other.
The cumulative aspect is key both for life and for Amazon: that is what allows organisms and Amazon alike to get more complex and continually develop higher level functions (or value add activities in the case of Amazon) while staying incredibly integrated and synergistic.
But to start this discussion, let’s note that Darwin’s view that species develop gradually does not mean the absence of unexpected breakthroughs: take the example of feathers and bird flight.
Exaptation: Of Feathers and Clouds
Feathers are broadly associated with bird flight. However they did not originally evolve for flight purposes.
In fact, scientists believe that feathers first evolved from scales for the purpose of heat regulation in what was then the birds’ predecessors. Only later in evolution did they got co-opted for flight. Biologists call this phenomenon of re-purposing of a trait during evolution an exaptation.
And this brings us back to AWS and how it came about.
In the early 2000s Amazon had already built a massive ecommerce platform. So much so that the scale and complexity of its technology infrastructure began to noticeably slow down new software development projects.
The need to simplify and accelerate the procurement of lower layer services or resources that software depends on (network, databases, and servers), had bubbled up as a key issue to the Amazon’s leadership team.
From there emerged the idea that became AWS: abstract the complexity of the lower level infrastructure layers and set software development (mostly) free. Do so by creating infrastructure agnostic interfaces to the lower layers (chiefly through application programming interfaces or APIs).
AWS was born from the quasi immediate recognition that these ideas would not just be of tremendous value to Amazon but to others as well.
AWS was a radically new business for Amazon, and a re-invention of enterprise computing at large. Yet its seemingly sudden inception was actually the cumulating point of gradual, cumulative and iterative, changes at Amazon. It was the next logical step in maturing the tech infrastructure capabilities it had built to develop its ecommerce platform.
With the success of AWS, Amazon famously turned a cost center into a hugely profitable new business. It achieved the tech business equivalent of the greatest exaptation, or momentous “pivot” in start-up parlance. The service that delivered the service, became the service.
Ecological Fitting, Adaptation, and Speciation
Besides AWS, there are other remarkable examples of Amazon’s iterative and cumulative approach to growth. And, there too, evolutionary biology concepts apply.
Let’s take how Amazon first expanded its ecommerce business.
Jeff Bezos cleverly picked books, a highly standardized product, to start Amazon back in 1994. From there, he built Amazon into a vertically integrated online book store.
To meet Jeff’s exacting customer satisfaction standards, process excellence in the warehousing and general logistics services had to be achieved.
This in turn made Amazon fit to tackle selling other highly standardized products, such as DVDs or software, without leap changes in capabilities or how it operated.
Using pre-existing attributes that turn out to be fit for a new environment is what biologist call ecological fitting. Amazon’s vertical integration as an on-line bookstore developed its fitness for its incremental horizontal expansion into new product categories.
Yet developing horizontally was slow and resource intensive. In response, Amazon launched Fulfilled By Amazon (FBA) in 2006.
What motivated Amazon to offer third party merchants, then competitors, the ability to sell through its online store was its desire to more rapidly reinforce its famed business flywheel.
A truncated version of the flywheel goes like this: adding 3rd merchants to its platform, Amazon could increase product selection much faster than it could on its own; widely increased selection in turn would make Amazon’s on-line store value proposition to end customers that much more attractive; and to close the virtuous loop: more customers attracted more merchants.
FBA was a new, non-consumer facing, business for Amazon. Yet it was also only an incremental step that built on its gradually developed logistics capabilities and the increasing standardization of its platform.
Looking at the strategic area of customer connectivity, Amazon also developed it through thoughtful, iterative and cumulative innovations.
One notable innovation was the Kindle introduced in 2007. While Amazon did not create the e-book category, it certainly perfected it and drove adoption to an unprecedented scale.
In evolutionary terms the Kindle could be seen as an adaptation, or the gradual refinement of existing traits of an organism towards greater fitness relative to its environment. And the Kindle certainly increased Amazon’s fitness as an on-line bookseller.
A more recent and groundbreaking development was the introduction of the Echo smart speaker device, and Alexa technology, in 2014. With the Echo, Amazon did no less than invent the whole new AI powered smart speaker consumer device category.
In that respect, the advent of the Echo paralleled a speciation event in biology. The smart speaker was akin to a new specie in the ecology of consumer electronic devices.
Acquisitions: Also Incremental
Mergers & acquisitions is a key way companies grow. They happen in biology too. The transition from mono-cellular to multi-cellular organisms life being one of the most notable example.
Amazon’s acquisition history for its part aligns with the iterative and cumulative growth logic we described. Whether considering online shoe seller Zappos, fulfillment robotics company Kiva Systems, or even Whole Foods, Amazon’s acquisitions have generally reflected logical step extensions of its business or capabilities. Amazon is neither an old fashion conglomerate (General Electric of old), nor a loosely integrated ecosystem (Tencent, a modern tech conglomerate).
How Amazon Engineers Biology-Like Outcomes
If Amazon has followed an evolutionary growth logic, it is largely because it subjects itself to patterns that produces biology like outcomes. Although Amazon doesn’t appear to do so deliberately, the parallels are nonetheless tangible. And they offer a fresh perspective on what underpins Amazon’s extraordinary ability to continuously grow and innovate at scale.
Riding Time, The Compounding Force
Gradatim Ferociter, latin for “step by step ferociously”, reflects a key aspect of how Jeff Bezos thinks about time. It is the motto he chose for his Blue Origin space venture.
While the urgency conveyed in the reference to ferocity is unsurprising, it is the motto’s emphasis on gradualism, “step by step”, that is strikingly unusual for a technology enterprise.
It is a rare celebration of “slowness” as a value compounding force integral to achieving major innovations.
Yet this outlook also directly aligns with Darwin’s gradualism and the cumulative and iterative logic we discussed earlier.
Amazon’s long term focus has otherwise been much talked about in other contexts. As a business, it had a relentless early days focus in reinvesting into its own growth and forwent turning a profit for years.
In Touch With (Useful) Constraints of The Environment: Customers & Tech Trends
For Amazon to display biology like evolution, it had to have been subject to its own form of evolutionary constraints.
At the same time, in business, leaders can select and promote specific environmental constraints as the forces that will best orient and shape their organization for success.
Jeff Bezos famously centered Amazon around customer satisfaction. And he did so to a degree that few, if any, companies have reached.
Jeff laid operational targets that were at once the most simple and measurable and highest impact to the customer experience: delivery time and product selection.
Coupled with a remarkable focus on operational excellence, this is how he harnessed the customers’ “divine discontent”, to shape Amazon in the company we know today.
In his 2016 shareholder letter about always being “Day 1”, Jeff emphasizes another selected environmental force: technology trends. This also fundamentally shapes Amazon as we have and will continue to discuss in this story.
The Scalability Constraint: Less Obvious, No Less Potent
While not directly environmental, but rather a derivative of its platform strategy, Amazon’s pursuit of scale has nonetheless acted as a uniquely potent 2nd order constraint as well.
Aside from its obvious outcomes of growth and efficiency, the pursuit of scale shapes Amazon’s organizational fitness in deep ways. It creates imperatives of standardization, modularization, automation, and process excellence. Importantly, the pursuit of scale enforces the reduction of complexity.
As we saw, both FBA and AWS came about as Amazon’s remarkable breakthrough to solve scale’s complexity, and speed of execution, barriers.
Jeff’s take on team size also brilliantly reinforces Amazon’s scalability imperatives. His famous “2 pizzas team” rule calls for keeping teams small, with no more members than 2 pizzas would feed. It fosters greater productivity and accountability as well as more distributed decision making, and it expands the space of exploration of innovative ideas. Moreover, it makes it hard for sprawling bureaucratic processes to take hold. Instead, it reinforces the constraint that internal capabilities must be packaged into efficient and standardized, in other words scalable, services.
General Plasticity: Rooted In First Principles Thinking
Another fundamental requirement for life is plasticity: almost by definition, life has to be malleable to adapt to its environment and for the evolutionary process to operate. And as it turns out, Amazon is extraordinarily plastic.
Started as an on-line book seller, it has built a logistics operation now genuinely rivaling FedEx.
Without a foot into enterprise computing, it leapfrogged the likes of Microsoft and IBM, not to mention Google, in inventing modern cloud computing.
Unknown then for its AI chops or consumer electronics flair, it leaped frogged both Google and Apple in inventing the smart speaker category.
So Amazon can, at times stunningly, re-shape its capabilities. But, aside from the scalability induced fitness we discussed earlier, what makes Amazon so plastic?
Amazon operates based on first principles. The idea of first principles thinking is to breakdown problems into basic elements, and then reassemble them from the ground up. It is actually uncommon because we often make assumptions and forgo this more systematic approach. It is however one of the best ways to generate original solutions for complex problems.
Harnessing first principle thinking to create original solutions to well thought out problems, and doing that more consistently than most, is what allows Amazon to innovate, reshape itself and be plastic in the ways we discussed.
This approach is in fact directly supported by Amazon’s leadership principle: “Start with the customer and work backwards”, as well as in its famed 6 pages press release approach to launching new products. The latter calls for first envisioning the end outcome, the product launch, with great specificity, and then also work backwards from there.
As Amazon tackles problems, it sets out to be unconstrained by pre-conceptions. Instead, it gives itself the best chance at conceiving of breakthroughs by formulating the most desirable outcomes it can imagine first and then works out solutions based on first principles (what it means when it says: “working backwards”).
General Plasticity: Actualized By Builder Mindset & Skillset
Operating under first principles is not afforded to any company however as it not only entails conceiving of new things (using first principle thinking) but also building new things. And this, in turn, can mean having to go much outside of core competencies, if that is what it takes. This is the type of leaps that few companies are comfortable with or capable of.
This brings us to the fact that, underpinning its plasticity, Amazon is actually the ultimate builder company.
Jeff Bezos and his team are indeed part pioneers, part grown men and women playing with the largest Lego set. Jeff also spent summers at his grandfather’s ranch during his youth. The resourcefulness and self-sufficiency he was exposed to no doubt infused him, and in turn Amazon, with that remarkable builder spirit.
As a builder company, and one with such breadth and depth of activities, Amazon is not just incredibly multi-competency. It has also shown a remarkable ability to acquire new knowledge. And then execute on it like no others.
How Amazon leaped frogged Google and Apple to invent the smart speaker category with Alexa and the Echo devices, and how in the process it acquired new competencies and solved a range of hard technological problems, is perhaps one of the most stunning illustration of that.
Of Value Surface & How Amazon Maximizes It
Before we conclude, let’s briefly set aside our biology lens to discuss one of Amazon’s extraordinary value creation pattern. I will call it value surface maximization and use AWS to illustrate it.
As we saw, by inventing modern cloud computing, Amazon broke through the software deployment complexity barrier it bumped into as it was expanding its ecommerce business. Yet, by simultaneously packaging its solution under AWS, it also exposed the value of its invention to start-ups and enterprises. As illustrated below, in doing so Amazon created two value surfaces, or distinct set of users and use cases, for its single invention.
As we discussed, this value surface expansion famously turned out to be exceptionally value generating for Amazon and its customers (and ultimately for the many more that the modern cloud computing era is benefiting).
Alongside and at times overlapping with its famed flywheel strategy, expanding the value surface of its innovations is yet another highly ingenious way Amazon augments the value it creates.
It has done so by serendipity to a degree (witness the origin of AWS) as well as by very deliberate design, as with Alexa, in either cases to remarkable results.
And with at least 4 value surfaces, as illustrated below, Alexa also showcases how strategic Amazon can be at expanding, or unfolding, value surfaces for its inventions.
Bringing it Together: Who Gets To Invent The Future?
Computer scientist Alan Kay said: “It’s easier to invent the future than to predict it.” But who gets to invent the future?
Let me bring things together by summing up some of the key attributes that underpin Amazon’s enduring growth and innovation success.
Here, I emphasize characteristics that build on this musing’s more novel perspectives rather than what has already been extensively said about the Seattle company.
- Builder Supremacy: Amazon, but also the likes of Tesla and Space X, have each reinvented key industries. What these firms share in common is that they are fundamentally mission driven, builder companies. By operating according to first principles and broadly embracing technology trends, they can conceive of radically new solutions. They are also pioneers ready and able to boldly go outside of their core competencies to bring these novel solutions to life (we touched on some of Amazon’s feats, for Tesla: think car maker designing cutting edge AI computer chips to bring about self-driving cars). In contrast with the many confining themselves to their core competencies or industry, these builder companies are therefore virtually unfettered. And their ability to do this at scale is what allows them to, literally, change the world.
- Multi-Modal Value Creation: unless they have a rent (think Google owning search and therefore a large share of on-line advertising revenues), companies aspiring to build the future must continuously find ways to maximize the value of their innovations. That is simply because it costs a lot to build something new and keep on innovating at scale. In this regard, Amazon is unique in the degree to which it architects and exploits highly ingenious modes of value creation: from outright inventions, to network effects (its flywheel), to value surface maximization (the new concept we introduced earlier), not to mention subscriptions (Prime) as well as cost efficiencies and other more traditional means of generating value.
- Pre-Adaptation: as we saw, Amazon’s general fitness is continuously shaped, tested and honed by its uncompromising focus on the customer as well as its pursuit of scale. That, along with its “always Day 1” imperatives and the level of integration of its business, operational and technical strategies, is what makes Amazon, as large as it is, uniquely pre-adapted to change. It allows it to harness time and serendipity, as evolution does albeit at different time scales, to seize both small and big opportunities as they arise. In the early 2000s, Amazon did not set out to enter enterprise computing. But it did, as we saw, conceiving of AWS at first out of a desire to increase its own fitness as an ecommerce company. And with AWS ushering the now $250 billion cloud industry, this may be the very best example of what happens when a pre-adapted company meets an exceptional opportunity.
With all of that said, Amazon has its share of imperfections. It has had notable failures (remember the Fire Phone?). Also, its ability to continue to grow and innovate cannot be taken for granted. As for nature’s own balancing mechanisms, self-limiting factors apply to Amazon’s astonishing growth, from competitive fairness to societal concerns and the reactions they have engendered. Moreover, other firms are bound to continue to be formidable innovators of their own, or take increasingly converging paths.
Yet, as I hope this story conveys, it does not take away that Amazon is extraordinary in key respects. Looking through our biology lens once more, its approach to “self-design” results in outcomes that parallel the best outcomes of life’s own processes more so than any other company. This is reflected in how it predisposes itself for innovation, as well as how it becomes fitter and more value generating, rather than more brittle or value diluting, as it becomes larger and more complex.
Amazon is the organism that grows the organism, and it is accelerating our future.
