What is behind Amazon’s solid growth? What makes it consistently deliver such quality service for the last 16 years? The secret lies with its founder – Jeff Bezos. Like Apple’s Steve Jobs, and Google’s founders Page and Brin, Jeff Bezos is deeply involved with the day-to-day operation at Amazon. He has been with Amazon since its beginning. The consistency of Amazon’s quality service and fast innovation is a direct reflection on Bezos’ personal drive, discipline, business savvy, and vision.
In 1994 Jeff Bezos raised money from his family members to create the first online bookstore. Due to its large book selection including many out-of-print books (a selection much larger than traditional bookstores), Amazon gained popularity among book buyers. Soon Amazon became the largest bookstore, and a success model on how E-commerce can work. After its success as online book seller, Amazon transformed itself into an online retail store. It sells anything from baby diaper to laptop computers. The third move by Amazon was cloud computing. Utilizing its large computing infrastructure, Amazon started to offer cloud computing to small companies who need flexible computing capacities. This pioneered a new era for large-scale on-demand computing. Today, Google, IBM and HP have all entered the market. The fourth prominent innovation Amazon had was its e-reader Kindle. With its wireless sync technology and easiness to purchase, Kindle quickly dominated the e-reader market. Today, Amazon as a company enjoys high growth of about 50% a year. Its online traffic growth is accelerating. Its stock is priced at $146, twice of what it was a year ago.
Bezos is visionary and bold to take risk. He looks far ahead and understands the unique opportunity presented by an initiative. When he launched prime membership on Amazon, where a member pays $80 a year in exchange for free express delivery, it generated a lot of doubt, even within Amazon. But this turned out to be a brilliant move. Prime membership generates large cash up front for Amazon, ensures loyal buyers, and enhances online shopping experience. It’s win-win for both Amazon and its customers.
When Bezos promoted cloud computing, very few people understand the significance of this offer, the technology and business implication. Today, it is at the forefront of the second-wave Internet technology. From Google to IBM, to Cisco, companies with large computing resoures all vie to be providers for this service.
Bezos instilled a corporate culture of strong customer focus. Everything is about customer experience. All engineering effort supports online shopping experience. Amazon is the first company to show “in stock” status, and the first to promise “ship within 24 hours”. The free return policy makes remote buying easy and riskless.
Most successful companies have customer-cenered policy. But it takes a strong founder to instill it into daily operation of every part of business. Bezos hold meetings with all major product groups regularly, and he asks sharp and insightful questions. In such daily involvement, he has created a coherent goal and consistent performance target. In addition, he instilled his personal drive behind every initiative.
The management of Amazon company is very disciplined and scientific. There are metrics for every stage of engineering. From design, to web testing, to customer satisfaction evalution. The performance of each employee and group is also measured by metrics. Amazon is the first to invent A/B testing for launching new online feaures.
The last secret of Amazon’s success is its people. Amazon attracts a group of highly motivated, self-starting and highly-educated people to its workforce. Like Google, Amazon hires a large amount of Ph.D. computer science graduates, and put them in engineering positions. Once these people are on board, they take initiative in their projects and drive product innovation. Amazon also hires MBA graduates from top universities around the country.
Amazon’s success is inpiring to all of us. Behind every success, there is a path. With current trend continuing, Amazon will become a much larger and even more formidable company in the next decade. We can learn from its success, and create lasting and successful business.
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