Sunday, July 2, 2017

The Everything Store: from Books to the Cloud

For a while, I was curious to as to how a company known and reputed for selling books become the innovator and a leader of cloud technology/services. The two domains seem unrelated, and the fact that the same founder is behind both ventures seemed coincidental. 

"The Everything Store" by Brad Stone is definitely one of the better biographical nonfiction works I’ve read, I still have a few more chapters more to go but it has already answered the question I wanted it to answer when I decided to purchase it. 

When you get started on the book it becomes clear that Bezos always intended Amazon to become a technology company, he wasn’t really sure how to get there but that was the end goal. 

Time and time again Bezos decides to capitalize on opportunities that common sense/wisdom would say have a small chance of paying off so as such they should be passed on for other opportunities that have a greater chance of paying off big. He approaches some of these opportunities at times like a scientist. 

His decision to sell books on Amazon was fueled by his realization that books were an item that was the same regardless of where you decide to buy it from, this quality makes consumers more likely to brave the untested waters of online shopping, given the price is right! He realizes that books in America were controlled by a handful of publishers and that they are relatively easy to ship in good condition. For someone who has not taken the time into looking to the Amazon story, it might look like from the point Amazon becomes a hit with the consumers it’s all smooth sailing and ventures that pay off big, but that’s not the image “the everything store” paints. 

Before venturing further on how Amazon transitioned from selling books to selling server resources, we need to talk about luck! In business and in personal life the importance of the role luck plays in deciding the outcomes of our actions is often understated. Unlike system design in engineering, in the real world the scope the systems we are part of cannot be defined with absolute certainty, there are just too many known and unknown variables at play. For the sake of argument and the continuation of this review, let’s define luck as all the factors that are beyond the control of the individual that has a moderating or causal relationship with the outcome the individual desires. 

Luck, it so happened was favorable for Amazon and Bezos when they first started out but this was not always the case. What I found out when I went about reading the book were the countless endeavors that Bezos and his team make that have little to no success. The book tells the story of a company that strives to better its core business, book retail while striving to attain the Bezos vision of transforming into a technology company. Work done by Jeff Wilkes on the Amazon’s fulfillment centers shows Amazon’s and Bezos commitment to their core business. 

Parallel to the efforts of “making what works better” Bezos and Amazon shows a relentless desire to venture out into the technological domain, book preview, A9 search and internal system modernization are examples of this desire. Though some of these endeavors had little success it becomes apparent that Bezos has not given up on the vision and when O’reilly proposes to expose Amazon sales data as API for the benefit of the community, it appears Bezos becomes aware of an another stakeholder of technology companies such as Amazon, the developers. This seems to spark the interest in Bezos to provide services to outside developers with the infrastructure Amazon has worked tirelessly to be one of the best in the industry. This decision would have also been influenced by their previous successful experiences of providing warehousing services to external sellers with the superior FC’s Wilkes had built. 

By the early 2000’s the foundation was finally in place for Amazon’s foray into the cloud. Bezos puts a resourceful executive Anday Jassy in charge of his latest pet project Amazon Web Services(AWS). Just like with his decision to start Amazon, luck was favorable. The competition, Google and Microsoft had their attention on the shining new opportunity Steve Jobs and Apple had uncovered with the iPhone. For the competition, on one hand was the proven success and sizeable profits of smart phones and on the other a barely break even, untested opportunity developer services offered. By mid 2000’s Amazon rolls out EC2 and S3 giving it close to half a decade's head start over the competition.

In my opinion the Amazon story tell you that, not all good decisions pay off but if you keep repeatedly making good rational decisions, you milk what works for all it’s worth and you have some luck on your side you are bound to do well. What makes Bezos a great leader to me is his ability to keep identifying good opportunities, be it in business ventures or hiring great people. Time will tell if he will be remembered as one of the greatest.

No comments:

Post a Comment