Yesterday the WSJournal had an amazing story about the elements of the successful launch of a new product or service based on the performance of Amazon. Because this is not a political blog and much of the material is a contrast with the launch of healthcare.gov I have edited out those portions that are political commentary.
The author, Bret Stephens begins by noting that Amazon.com handled 26.5 million purchases on Nov. 26, 2013, a company record and a rate of 306 items per second. What follows is a summary of the four Amazon principles that produce such results.
I was particularly intrigued by the fourth principle It reminded on the military axiom: “No plan survives contact with the enemy.”
• Embracing the truth: Mr. Bezos “embraces the truth,” Rick Dalzell, a retired top manager at Amazon, told biographer Brad Stone for his book, “The Everything Store.” “A lot of people talk about the truth, but they don’t engage their decision-making around the best truth at this time.”
• Sweating the details: “Bezos paid a lot of attention to the flow of the checkout process and the warehouse order processing software,” writes biographer Richard Brandt in his book “One Click.” “And everything had to be stable enough, able to handle enough traffic that it would not crash and leave customers stranded, a common problem, especially in the early days of commercializing the Internet. ‘He was scared to death that we would get all these customers, and then they would go away because the system didn’t work well, wasn’t easy,’ says [programmer Peri] Hartman.”
Real-time accountability: Mr. Stone describes a meeting during the 2000 holiday season when Mr. Bezos tested a claim by Bill Price, his vice president for customer services, who said hold times on Amazon’s phone lines were less than a minute.
“‘Really?’ Bezos said. ‘Let’s see.’ On the speakerphone in the middle of the conference table, he called Amazon’s 800 number. . . . Bezos took his watch off and made a deliberate show of tracking the time. A brutal minute passed, then two. . . . Around four and a half minutes passed, but according to multiple people at the meeting who related the story, the wait seemed interminable.” Less than a year later, Mr. Price was gone from Amazon.
Searching, not planning: The development expert William Easterly makes a useful distinction between “planners” and “searchers”: The former come to a task with preset ideas about what should work, and then they go about implementing the plan. Searchers, by contrast, spend their time figuring out through trial-and-error what does work.
Amazon succeeds because it searches. How to reassure customers that their credit card information is safe? Should Amazon invest in warehouses or not? (Mr. Bezos at first opposed the idea, then changed his mind.) Should the site feature negative product reviews? Mr. Bezos gambled that customers would appreciate the honesty. And so on.