Jeff Bezos and Andy Jassy
I have mixed feelings about Jeff Bezos stepping down as the CEO of Amazon, the company he built from the ground up. It was first an online bookstore which later blossomed into this multi-million dollars company. He will leave his post after almost 30 years, to become the executive chairman. It does come as a shock. Let’s analyze what will happen when he finally steps down.
Andy Jassy will replace Bezos. He runs the cloud computing or AWS wing of Amazon.
There are lots of things which we can learn from this amazing brainiac entrepreneur. He does not run a car brand like Tesla, is not like of Steve Jobs, get the publicity of Zuckerberg (who has an entire movie devoted to him and also the conspiracy theories that he’s an alien [chuckles]), or blessed with the wealth of Bill Gates but, in my view, he deserves to be included with all of these above entrepreneurs, maybe even at the top of the list.
According to Bezos, entrepreneurs who are good must be stubborn and flexible and I couldn’t agree more. When referring to Amazon, Bezos says, “We are stubborn on vision. We are flexible on details.”
The first part is that they choose to adhere to the vision while being flexible about the tactics. Bezos adds, “If you’re not stubborn, you’ll give up on experiments too soon. And if you’re not flexible, you’ll pound your head against the wall and you won’t see a different solution to a problem you’re trying to solve.”
There’s always a challenge in being stubborn and flexible. Bezos warns: “The thing about inventing is you have to be both stubborn and flexible, more or less simultaneously. The hard part is figuring out when to be which!” These are truly wise words.
Jeff Bezos has always been a pioneer for all sorts of experimentation and this is what keeps me intrigued with him. I love this quote from Bezos:
“If you double the number of experiments you do per year you’re going to double your inventiveness.”
Amazon has always had a culture of willingness to invent and experimentation. It is not something secondary or done because of a fad. It is simply because of the free spirit of Jeff Bezos. If I ever have a company, I would follow the footsteps of Jeff Bezos.
When Amazon was in its early days, the executives were skeptical about placing advertisements on television. So, they looked up two markets with a good blend of the customer demographics they target, and they found Portland and Minneapolis to be the best. The test ran for 16 months, much longer than most of the companies in the world would pursue an experiment, all because of Bezos, as he said that Amazon was “unbelievably fixated on it” and that it was a “long, expensive test, but we were really determined to understand this for our company once and for all.”
Guess who was the first to bring free shipping to the online shopping market? Yes! Amazon. A lot of people were hesitant about ordering online because of the shipping charges (I am to this day, leading me to add items to my cart till it ships free). They were also jubilant with Amazon prime which ensures they get their product within 1-2 days.
The company presently offers free shipping on orders over Rs. 499 or $25. The program is called Super Saver Shipping. You can add all this up and see that a company that operates on low margins like Amazon can’t do it profitably all the time. They would need to increase the $25 threshold.
The profit and loss math tells you not to do it, but customers tell you to do it. What side do you think Bezos took? The side of the customer and that’s what all companies need to do to make profits in the long run. Surprising for an engineering graduate like Bezos, but not surprising for the customer obsessed CEO that he is.
As I have already said, experimentation is a part of Amazon’s culture but they also measure the experiments. When someone comes up with an idea for an experiment, Bezos commonly says, “We can measure that.” This is revealing because it shows that one of his first thoughts is whether they can measure an experiment. This is the type of CEO everyone must aspire to me. I can only imagine the healthy work culture that they have at Amazon.
Jassy is an integral part of Amazon. He has been there since 1997 and came up with the idea of AWS. It is actually doing well with 34% market share. He does have some good ideas up his sleeve. We need to see if he can step into Bezos’ shoes.
Jassy might have a more heavy personality when compared to the breezy Bezos. He is bent on getting results from people. One of the people at Amazon, Jeff Barr explained that they review thousands of metrics during weekly business reviews. The general managers are answerable to Jassy if they don’t meet weekly goals which are pretty demanding. They have to explain what they are doing to get back on track and that does sound like a handful.
It is clear that Jassy is the correct person to succeed Jeff Bezos. He has the mind to achieve things while experimenting and coming up with new ideas himself. It will be intriguing to see what he does for Amazon. The company has touched great heights under Bezos. Let’s see where it goes when Jassy is leading them.