What We Can All Learn From Amazon about Seeing Business Opportunities Others Don't See05/28/2015 12:00AM
By Glenn Llopis
Many of the early dot-coms spotted the great opportunities the Internet offered and sought to sow those seeds of momentous opportunity. But one company stands out, even today, above them all: Amazon.com.
This company anticipated crisis and managed change to see beyond the obvious channels of business to what the World Wide Web might mean for global commerce. Its vision was so astute it went on to become the world’s number one Internet retailer—a title it still holds today.
The original online book retailer now dominates category after category of Internet sales. The story of how this company began, and how it made the transition from specialty store to online super-site, is one of repeated application of one characteristic in particular that embodies the Immigrant Perspective of Business Leadership: circular vision.
Amazon.com is inextricably linked to its founder, Jeff Bezos. A Princeton graduate with degrees in computer science and electrical engineering, Bezos immediately put his studies to work amid the mixed fortunes of Wall Street, first at the start-up Fitel, which was building computer networks to facilitate international trade, and then at D. E. Shaw, a finance firm dedicated to applying computer science to the stock market. His experiences at these two companies would sharpen his eyes to see opportunities reaching all around him.
By the time he was thirty years old, Bezos had begun to focus on the Internet. There he spotted an immense opportunity during a time—1994—when the Internet was predominantly used by academics and government agencies. Seeing beyond the obvious to potential commercial applications, Bezos saw a giant opportunity in the general public’s growing usage of the Internet, which was exploding at a rate of 2,300 percent per year.
He focused in further on this seed of opportunity through research. He looked first at the top 20 mail-order businesses in the United States with the intent of determining which ones might be made more efficient through the use of the Internet.
Books, Bezos soon discovered, were ideal. The cataloging requirements and expense made their sale unprofitable for mail order. On the Internet, the expense was primarily opportunity cost. A hastily arranged trip to the American Booksellers Convention in Los Angeles further convinced Bezos of the viability of selling books through the Internet. There he discovered that the industry’s major players already possessed electronic lists of their products. All he needed to do was compile those lists in a central location where they could be searched and ordered by the public.
So sure was Bezos that he gave up his lucrative New York job and its promising future. If company lore is to be believed, it was merely days later when, during the July Fourth weekend of 1994, Bezos and his wife, Mackenzie, flew to Texas, picked up a used Chevy Blazer given to them by his stepfather, Mike Bezos, and began their journey to Seattle, with Mackenzie driving while Jeff typed a business plan on his laptop.
It has been said that Jeff Bezos made his decision based upon what he calls the “regret minimization framework.” That is, a view of looking back on life from its end to imagine the results. Though he perhaps didn’t describe it as such, he was actively applying circular vision. He was anticipating the future, looking around and beyond the obvious pathways of his time.
Today he and his company reap the perpetual harvest of that original broadened observation. It is perhaps no coincidence that the company’s name, Amazon, is tied to circular vision. Named after the long and winding river with seemingly countless tributaries, Amazon.com embodies the ever-flowing, ever-changing nature of opportunity. Bezos envisioned, even then, a company that would manifest its namesake in scope and reach – that would carve out an ever-broadening landscape.
And the company has since its birth held to this dynamic. Its early operation typified what would later become the standard image of the Internet start-up. Bezos setup shop in a two-bedroom house in Bellevue, Washington. Using limited capital raised from family and friends, he designed, built, and tested the beta-version website. On July 16, 1995, after a successful month of testing, and almost exactly a year after Jeff and Mackenzie arrived in Washington, Amazon.com was finally launched to the public.
The only marketing was word of mouth, and that was all it took. In 30 days, Amazon.com had sold books into all fifty states and forty-five countries beyond. By November 1995, Amazon.com realized its first 100-order day and was doing more than $20,000 in sales each month.
But it was not merely this early success, fueled by early insight into e-commerce, that gave Bezos his good fortune. He foresaw the coming wave like almost no one else. He saw that the Internet would grow quickly, that its 1994 growth of 2,300 percent was just the beginning. Perhaps most presciently, he saw the potential to transform the Internet into something that would change the way that people did business forever. He thus focused his company’s energy on riding the swell as fast and as far as it would carry them.
Sensing from the beginning that books were only an entry into the online market, Bezos began to shepherd Amazon.com into other sales arenas. He did not aspire to be “Earth’s biggest bookstore” but rather “Earth’s biggest anything store.” Again, he applied circular vision. In 1997, he added CDs and movies, and by Christmas 1998, Amazon.com boasted five more categories in its product line: software, electronics, video games, toys, and home improvement.
Not everything that Bezos has tried has worked, but his good fortune has continued nonetheless. This is the effect of sowing one great seed of opportunity. It can elevate one’s good fortune forever.
Today, Amazon.com is still the world’s largest Internet retailer, handling not only its own inventory and sales but also serving as a gateway and fulfillment arm for numerous other major brands, including brick-and-mortar competitors such as Borders and Target.
Amazon.com is the story of one man who set his sights on one great seed of opportunity that would create a current of good fortune so swift it would carry on, wide and vast, for years to come. This vision consigned whole industries to obsolescence, and created one of the most recognizable brands in the world.
Like Costco, Amazon is yet another forward-thinking company whose relevancy to consumers and businesses will remain strong due to Jeff Bezos’ vision and the workplace culture that embodies the 6 characteristics of the Immigrant Perspective on Business Leadership:
- Keep Your Immigrant Perspective: Amazon delivers its cultural perspective by seeking to find new ways to continuously reinvent itself. Today, Amazon is known just as much for its Kindle e-reader devices as it is known for its online store. Bezos sought to reinvent the way books are purchased –and his immigrant perspective allowed him to do this, twice.
- Employ Your Circular Vision: As noted, Bezos anticipated crisis and managed changed in the book industry. He saw the potential for online commerce before almost anyone. He created the online book retailing industry and he continues to see opportunities others don’t.
- Unleash Your Passion: Bezos’ leap of faith from Wall Street to his garage in Bellevue, Washington allowed him to create possibilities that he aimed to share with others. His passionate pursuits to create new standards of excellence may not have always led to good fortune (ie. Amazon Auctions, their failed attempt to take eBay on head-on), but he used the lessons of those rare failures to re-craft Amazon’s strategy to their eventual greater success.
- Live With An Entrepreneurial Spirit: Since his early days at Fitel, Bezos’ entrepreneurial spirit has always remained alive. As such, Amazon’s innovations remain endless.
- Work with a Generous Purpose: Amazon’s story is one that is embedded in sharing the harvest of one’s success with others. Not only did Amazon share their powerful ecommerce platform with others retailers, they allowed independent authors who did not have the means to promote, market and sell their books – instant access to a channel of distribution with world-wide reach.
- Embrace Your Cultural Promise: The Amazon culture strongly embraces the idea that making mistakes are an essential part of pursuing new ideas. At Amazon, everyone is encouraged to have a fearless attitude toward experimentation and the future. This attitude is crucial to Amazon’s ongoing success; without it, innovation would wither and die.
Amazon stands out among Internet companies in many ways, but the most important is that it has thrived by fully living the entrepreneurial attitude with which it started. As long as Amazon and Bezos keep that entrepreneurial spirit alive, I can confidently predict that they will stay at the forefront of retail – and Internet – innovation.
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