5 “How To” Examples We Can Learn from Amazon’s Success

This year, Amazon made the number one spot on the Harris Poll for reputation quotient ratings. This is not surprising considering that you can’t seem to have a conversation regarding retail prices anymore without hearing, “I’ll just order it on Amazon”. Amazon’s soaring reputation and success make it a company worth looking to for “how to” examples for business success.   That said, here are 5 leading examples to be learned from Amazon:

#1: You have to be willing to fail, but able to see real opportunity… 

When Amazon began in 1994, everyone involved took a pretty big risk. I say this because in 1994 online retail was quite new and it was still unclear whether or not it was actually going to catch on in popularity, but founder Jeff Bezos saw an opportunity and he took it. He was willing to fail because he knew that innovation takes risk and that you have to be willing to experiment and accept your failures in order to become successful.  As Bezos says, “If you decide that you’re going to do only the things you know are going to work, you’re going to leave a lot of opportunity on the table.” and his dedication to experimentation has held strong ever since the start of the company despite the occasional failure. It’s all about risk management. You need to be willing to try things that could succeed, but also to reduce as much risk -added as possible.

#2: You have to start specific, but be ready to expand…

When Amazon first began (if anyone still remembers those days), the company’s focus was on selling books (the specific). This reduced the company’s risk by sticking to only one thing being controlled out of Bezos garage. But today, Amazon seems to sell almost everything; they even sell groceries now! This was exactly what Bezos was hoping for when he first began the company. From Amazon’s strategy, we learn to start with a very specific need and be ready to gradually branch out as success allows for it.

#3: You have to keep groups small…

Amazon is known for small work groups based on Bezos “two pizza rule”, which is based on the idea that groups should be small enough to feed only two pizzas (roughly no larger than 5-7 people). The idea is that with fewer people you will optimize productivity. When focusing on specific tasks it’s important to keep groups small in order for the groups to stay focused on the specific task.

#4: You have to be customer oriented…

Amazon is one of the most popular sites for customer satisfaction. Bezos put the customer above short-term payoff and it made him more successful. Amazon has taken on the strategy of using less marketing and focusing more on customer satisfaction, and it’s working great.  Amazon’s superior shipping options were initially seen as risky behavior, but in the long run, this ended up paying off in customer loyalty and more orders (aka more money), which in turn made the company even more successful. Amazon Prime was actually a marketing tool that ended up gaining more customers and making more money in the long run. Amazon knows that when the customer is happy, you’re more likely to be successful.

#5: You have to always be looking towards the future…
 
Bezos acknowledges that it is impossible to know what the future holds, so he recommends focusing on things that absolutely won’t change about business. For example, customers will always want fast shipping, reliable service, and the cheapest price for the best quality.  Knowing this, it is important to make things that are consistent (or are unlikely to change) a priority. This is why Amazon experimented with video in the way of the Amazon Fire TV (when considering trends, this was likely to succeed). This is also why Amazon has such great deals, a successful shipping plan, and high membership because these are value-added benefits that customers enjoy.