Amazon Unbound by Brad Stone – Here are my Five Lessons and Takeaways

Amazon Unbound• “First tell me what would be a magical product, then tell me how to get there.” 
• I would once again pose the critical question of whether Amazon and Jeff Bezos were good for business competition, for modern society, and even for our planet.  
• It’s the story of a hard-driving CEO who created such a fertile corporate culture that even at massive size it repeatedly shucked its own bureaucracy to invent exhilarating new products. It’s also the story of how a leading technology company became so omnipotent over the course of a single decade that many started to worry that it might definitively tilt the proverbial playing field against smaller companies. It’s a tale that describes a period in business history when the old laws no longer seemed to apply to the world’s most dominant companies.
And it explores what happened when one man and his vast empire were about to become totally unbound. 
• “You can regulate yourself quite easily or think about what you’re going to do with your existing resources…. Sometimes, you don’t know what the boundaries are. Jeff just wanted us to be unbounded.”
From Amazon Unbound by Brad Stone


I have now presented synopses of both of the books by Brad Stone about Amazon.  I presented The Everything Store: Jeff Bezos and the Age of Amazon back in December, 2013; the year it was published.  And now, this last Friday, I presented my synopsis of Amazon Unbound: Jeff Bezos and the Invention of a Global Empire.

(Karl Krayer, my former colleague, also presented Brad Stone’s book The Upstarts: How Uber, Airbnb, and the Killer Companies of the New Silicon Valley Are Changing the World back in 2017).

So, Brad Stone has invested a chunk of his life over the last decade putting his research and journalistic skills to work to understand, and explain, Amazon, and other companies that rely on technology to deliver their products or services.

Let me state that I am an Amazon fan.  I am a Prime member, and have been for years.  And, in addition to buying everything from shirts to trash bags, and so much more, I also buy all of my books from Amazon these days, to read on my Kindle app on my iPad.

Yes, I know the criticisms of the company; and I know about the tactics they follow that allow them to pay very little in federal taxes. And, I think it is noteworthy that just recently they have added two new principles – the first new ones in years – to their Leadership Principles.  They are:
15) Strive to be Earth’s Best Employer
16) Success and Scale Bring Broad Responsibility.

My assumption is that these were added partly in response to the accusations made about how they treat their workers; especially their workers in their fulfillment centers.  So, this is a big step, to add these two principles.

(One might wonder if Jeff Bezos agreed to this only because he is no longer hands-on in his involvement in the Amazon operations).

But, the company is wildly successful, and their now former CEO is the wealthiest person on the planet; maybe the wealthiest person who has ever lived.

And, just to give a recent example of why I like Amazon personally:  my wife and I bought quite a few items for a recent trip we took, and just this morning, I clicked the buttons to return two items we ended up not wanting to use.  No hassle; easy as could be.  They have made customer service easy, convenient, and always a satisfying interaction.

Now, to the book itself.  One way to describe this book is to say that it is simply a chronicle of their hits and misses over the last decade.  There are plenty of details about their not-so-successful efforts in China, and India, and their process to open a second headquarters that did not turn out as was first “predicted.”  So, if you want to know the history of what happened, and what did not fully materialzie as hoped, within Amazon over the last few years, this book will provide information aplenty.

But in addition to such formation…

In this synopsis, I began with some numbers, listed in the book (plus the most recent, which I added):

  • Numbers:
  • Dec. 31, 2010 – Amazon net sales, $34.2 billion; Employees, 33,700; Market Capitalization, $80.46 billion; Jeff Bezos net worth, $15.8 billion
  • Dec. 31, 2016 – Amazon net sales, $135.987 billion; Employees, 341,400; Market Capitalization, $355.44 billion; Jeff Bezos net worth, $65.4 billion
  • Dec. 31, 2018 – Amazon net sales, $232.89 billion; Employees, 647,500; Market Capitalization, $743.41 billion; Jeff Bezos net worth, $124.93 billion
  • {• July 7, 2021 – Employees, 1,298,000; Market Capitalization, $1.871 trillion; Jeff Bezos net worth, $212.5 billion (Forbes, 7/7/2021)}.

I always include What is the point of the book.  Here is how I described the point this book?
• Jeff Bezos was (is) always pointed to the next thing; the next big thing; and he would never rest on yesterday’s successes. Better; more; tomorrow. That was what he was after.

And I ask Why is this book worth our time?  Here are my three reasons for this book:

#1 – This book is a chronicle of the challenges and successes of Amazon.
#2 – This book provides real insight into what drives Jeff Bezos.
#3 – This book is something of a chronicle of the technological advances of the last 15 years.

I always include a few pages of Quotes and Excerpts from the book – the “best of” Randy’s highlighted Passages.  Here are some of the best of the best that I included in my synopsis: 

• “Predictions made by climate scientists just five years ago are turning out to be wrong,” he began. “The Antarctic ice sheets are melting 70 percent faster than predicted five years ago. Oceans are warming 40 percent faster.” 
• “I really do believe when ingenuity gets involved, when invention gets involved, when people get determined, when passion comes out, when they make strong goals—you can invent your way out of any box. That’s what we humans need to do right now. I believe we’re going to do it. I’m sure we’re going to do it.” 
• “Why are you wasting my life?” he’d ask, scoffing at disappointing underlings. …Or he leveled them with “I’m sorry, did I take my stupid pills today?” While the brutal leadership style and distinct culture was enervating to many employees, it was also proving unmistakably effective. 
• In 2010, Amazon was a successful online retailer, a nascent cloud provider, and a pioneer in digital reading. But Bezos envisioned it as much more.  …He was also attempting to position Amazon’s next generation of products directly on its farthest frontier.
• Bezos’s intuition had been right: there was something vaguely magical in summoning a computer in your home without touching the glass of a smartphone, something valuable in having a responsive speaker that could play music, respond to practical requests (“how many cups are there in a quart?”), and even banter with playful ones (“Alexa, are you married?”).   
• We all know that if you swing for the fences, you’re going to strike out a lot, but you’re also going to hit some home runs. The difference between baseball and business, however, is that baseball has a truncated outcome distribution. When you swing, no matter how well you connect with the ball, the most runs you can get is four. In business, every once in a while, when you step up to the plate, you can score 1,000 runs. This long-tailed distribution of returns is why it’s important to be bold.   
• Like many other technology revolutions, cloud computing was first the provenance of geeks, and then spread outward.   
• Bezos also advocated for the practice of stack ranking. Bezos had absorbed that practice from Topgrading, by Bradford Smart. 
• “You can write down your corporate culture, but when you do so, you’re discovering it, uncovering it—not creating it.” 
• He also exposed them to a steady stream of Jeffisms: about one-way and two-way doors; how double the experimentation equals twice the innovation; how “data overrules hierarchy” and there are “multiple paths to yes”—an Amazonian notion that an employee with a new idea who gets a negative reaction from one manager should be free to shop it to another, lest a promising concept get smothered in infancy. 
• Bezos contended that the media business enhanced the appeal and “stickiness” of Amazon Prime, which in turn motivated people to spend more on Amazon. “When we win a Golden Globe, it helps us sell more shoes,” he said. 
• Jeff Bezos placed prospective business opportunities into one of two buckets. There were land rushes, when the moment was ripe, rivals were circling, and Amazon had to move quickly or else it would lose out. Then there was everything else, when the company could bide its time and patiently experiment. …Amazon’s attempts at a third-party marketplace and with the Kindle and Alexa were land rushes.
• S-team members remember Bezos handing out a list of products that he felt should never be promoted on the site, such as guns, alcohol, online dating sites, dietary supplements, and financial services that pushed people into high-interest loans.
• Years ago, Jeff Bezos had given his marketplace team a few simple instructions: remove all friction to selling on Amazon; eliminate the barriers to cross-border trade; address any problems with innovative technology and automated systems, not costly manpower.
One result was an explosion of low-priced selection that fueled the historic growth of Amazon’s e-commerce business. But another was the disintermediating forces of globalization that crushed Western sellers and created a dynamic that made it exceedingly difficult to protect intellectual property, prevent fraud, and fairly adjudicate disputes.
“Third party sellers are kicking our first party butt. Badly.”

In my synopses, I then include many key points and observations that I pull from the books.  Here are many from this book:

  • Words, and names matter — These were typically Amazonian names: geeky, obscure, and endlessly debated inside AWS, since according to an early AWS exec, Bezos had once mused, “You know, the name is about 3 percent of what matters. But sometimes, 3 percent is the difference between winning and losing.”
  • Amazon.com — He called the company Cadabra Inc., then wavered and considered the names Bookmall.com, Aard.com, and Relentless.com, before finally deducing that the Earth’s largest river could represent its biggest selection of books—Amazon.com.
  • ALEXA — Bezos also suggested “Alexa,” an homage to the ancient library of Alexandria, regarded as the capital of knowledge.
  • The fifty-cent word “plenipotentiary” was used inside the team to describe what he wanted: an assistant invested with full powers to take action on behalf of users, like call for a cab or place a grocery order.
  • Jeff Bezos’ Amazon…
  • This is Day 1 “This is Day 1 for the Internet and, if we execute well, for Amazon.com,” he wrote, coining the sacred phrase “Day 1” that inside Amazon would come to represent the need for constant invention, fast decision-making, and the eager embrace of broader technology trends.
  • The first company-wide motto was “Get Big Fast.”
  • The flywheel — Then he had an epiphany, recognizing the flywheel, or virtuous cycle, that was powering his business. By adding outside vendors and additional selection to Amazon.com, the company drew in new shoppers and earned commissions on those sales, which it could use to lower prices or subsidize faster delivery. That in turn drew in more shoppers and attracted more sellers—and the process repeated itself. Invest in any part of the loop, Bezos reasoned, and this cycle would accelerate.
  • Amazon executives explained this as a triumph of their flywheel, the virtuous cycle that guided their business. …Once again, it worked like this: Amazon’s low prices and the loyalty of its Prime members led to more customer visits, which in turn motivated more third-party sellers to list their wares on its marketplace. More products attracted more customers. And the commissions that marketplace sellers paid to Amazon allowed the company to further lower prices and invest in speedier delivery for a greater percentage of items, making Prime even more attractive. Thus the fabled flywheel fed on itself and spun ever faster.
  • Silence; silently reading, and pondering, the six-page narratives — PowerPoint presentations, with their litany of bullet points and incomplete thoughts, were banned inside the company despite being popular in the rest of corporate America. Instead, all meetings started with almost meditative readings of data-rich, six-page documents, called “narratives.”
  • The debate manifested itself in endless drafts of the “PR FAQ”—the six-page narrative Amazonians craft in the form of a press release at the start of a new initiative to envision the product’s market impact. The paper, a hallowed part of Amazon’s rituals around innovation, forces them to begin any conversation about a new product in terms of the benefit it creates for customers.
  • The “two-pizza” teams
  • Constant invention — Bezos wrote: “Invention is in our DNA and technology is the fundamental tool we wield to evolve and improve every aspect of the experience we provide our customers.”
  • Creative Wandering — And while he was inordinately focused on customer feedback in other parts of Amazon’s business, Bezos did not believe that listening to them could result in dramatic product inventions, evangelizing instead for creative “wandering,” which he believed was the path to dramatic breakthroughs. …“The biggest needle movers will be things that customers don’t know to ask for,” he would write years later in a letter to shareholders. “We must invent on their behalf. We have to tap into our own inner imagination about what’s possible.”
  • Two-way doors — But then Wilke convinced him that it was a “two-way door”—Bezos’s phrase for a decision that can always be reversed later, as opposed to “one-way doors,” in which the choice is permanent. He agreed to try it out. Garcia had to “disagree and commit,” Amazon’s lingo for committing to a course of action you oppose.
  • Learn to present – very well.
  • Getting selected could be a career-defining moment at AWS. Managers could boost their prospects with a comprehensive and confident presentation. But if they employed ambiguous language, erred with their data, or conveyed even the whiff of bullshit, then Charlie Bell swooped in, sometimes with awesomely patronizing flair. — For managers, a failure to deeply understand and communicate the operational posture of their service could amount to career death.

I really don’t quite know how to process how I think about his reputation for how he treats workers.  I am a fan treating of treating people well, and I present synopses of many books on social justice issues.  But, his view of what happens to people as they stay put is…well.. it makes you think…
• Bezos thinks people get lazy; uninventive; giving in to routine… this partly explains his obsession against unions, and stock options, and…
• “People thought it was a mean-spirited process and to a certain extent it was,” Niekerk said. “But in the big picture, it kept Amazon fresh and innovative.” …Bezos appeared to believe that an overly comfortable or exceedingly wealthy workforce might also doom Amazon. …Bezos eschewed any financial hooks, like steadily increasing stock grants, that might keep people at the company even if they were no longer engaged in their work.  — “He once told me, ‘If we ever appear in the “100 best places to work in America,” you’ve screwed this place up.’”

And, I always conclude with this; here are my Five Lessons and Takeaways:

#1 – Amazon became dominant because of the vision and focus of one man – Jeff Bezos.
#2 – Jeff Bezos does not believe that people will keep at it long enough, with enough energy, on their own.  He pushes and pushes…
#3 – Jeff Bezos believes that technological breakthroughs are needed, and will come, for the next leap forward.
#4 – Jeff Bezos basically invented how to hold genuinely productive leadership team meetings in a new way. In silence, reading a six-page narrative together, and then aiming to tackle the challenge presented in the narrative.
#5 – Jeff Bezos simply kept aiming higher. (Literally higher – into space).

I write this the day after Richard Branson went to the edge of space, and just days before Jeff Bezos is scheduled to make the same journey (a little higher that Branson).  Aiming higher.  Innovating;  Non-stop inventiveness and creativity. That is pretty much the Amazon story.  This book will help you understand that.


• Here are Amazon’s Fourteen, now Sixteen, (Leadership) Principles.

1) Customer Obsession
2) Ownership
3) Invent and Simplify
4) Are Right. A Lot
5) Learn and Be Curious
6) Hire and Develop the Best
7) Insist on the Highest Standards
8)Think Big
9) Bias for Action
10) Frugality
11) Earn Trust
12) Dive Deep
13) Have Backbone; Disagree and Commit
14) Deliver Results

And, JUST ADDED:
15) Strive to be Earth’s Best Employer
16) Success and Scale Bring Broad Responsibility

  • You should check out…
  • his first letter to shareholders
  • Amazon’s fourteen (now sixteen) principles, in more detail

——————

I have presented synopses of business books monthly for over 23 years.  Our synopses are available for purchase.  Each synopsis comes with my multi-page, comprehensive synopsis handout, plus the audio recording of the synopsis presentation (recorded at our First Friday Book Synopsis events).

You can order them from our web site.  Click on the “Buy Synopses” tab above to search by book title.  And click here for our newest additionsMy synopsis of The Everything Store by Brad Stone is available now, and my synopsis of this book, Amazon Unbound, will be available soon.

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