Definition
Leaders expect and require innovation and invention from their teams and always find ways to simplify. They are externally aware, look for new ideas from everywhere, and are not limited by “not invented here.” As we do new things, we accept that we may be misunderstood for long periods of time.
Explained by Amazon CEO Andy Jassy
So for a lot of companies who actually make it as a company, they get through the startup stage and make it as a company, they make it on the strength of a great innovative idea.
However, for a lot of those companies, it actually becomes really difficult to invent something else new and they spend lots of time just iterating in small ways on that original invention idea that made them as a business. And it’s actually difficult to sustain being successful in a dynamic world and how fast technology changes if you’re not constantly inventing and reinventing.
I think over the 29 years that we’ve started, Amazon thus far, we have been very vigilant and very strong at continuing to invent and simplify across our business. And in some cases, it’s been whole cloth invention.
You know, pioneering AWS and cloud computing is a good example of that or pioneering a digital book reader or a device that does natural language understanding and automatic speech recognition, like what we did with devices for Alexa, is another example.
And in many other cases, what we’ve done instead of whole cloth invention, is just completely reinvented our existing business and the customer experience associated with it. And a really good example of that is our marketplace business. So in the late nineties or so, what we noticed, being externally aware, was that customers were really responding well to companies like Ebay and half.com that had a lot of third-party sellers who are offering really broad selection and a variety of price points to customers. And we debated very animatedly inside the company, whether we should have a marketplace offering. And the reasons that people were resistant to doing so at the time were in part because we had all these relationships that we had set up with distributors and publishers and we didn’t know whether they would be so keen on us allowing third-party sellers in the marketplace or on our website. And then we also just couldn’t really believe that anybody else, particularly third-party sellers, would take care of customers as well as we did. And so we really fought this and eventually we decided that we were going to build a marketplace offering. Because at the end of the day, having much broader selection for customers and lower prices was better for customers. And we’re always going to shade on what we think customers want most.
Then we really struggled with the right implementation. And what we started with was trying to build an auctions website like Ebay. And that was a complete me too offering that failed miserably. And then we said, OK, we’ll take all our third-party seller selection and we’ll put it in a separate area of our website that we called Z shops. And that’s where all the third-party selection will be. But of course, that turned out to be a cul-de-sac in a place where nobody wanted to go to. And it wasn’t until we came up with a simplifying assumption that we will have all our third-party selection on the same detail pages as our first party retail selection where all the traffic was. Which, by the way, in retrospect, seems blindingly obvious, but the time was a real a-ha for us until we made that simplifying assumption, we did not have a marketplace business. And once we did, we actually found the marketplace offering really took off. And that turned out to be a really good decision for customers because they got much broader selection and even lower prices. And for our business, because about 65% of the units we sell today are marketplace items.
So we have to constantly be pushing ourselves to invent and reinvent what’s possible for customers.