My Top 3 Learnings from Brad Stone's The Everything Store
In business, the more ruthless you are, the more profitable you are…right?
Not always.
According to HBR, people tend to think companies can’t do good and make money. But, in reality, the two aren’t mutually exclusive.
Researchers found a close correlation between companies who scored highly on corporate social responsibility measure and profitability. To quote the article:
“Better behaved firms tended to be better rewarded.”
I often think about this research when I think about Amazon. As Brad Stone notes, the words that come up the most frequently in his book are: “ruthless” and “relentless.”
As a company, Amazon is relentless when it comes to beating their competition, undercutting their third-party sellers (allegedly), and treating their warehouse workers as commodities.
On the other hand, the company’s obsession with their customers has allowed them to embed themselves into almost every corner of our lives.
Personally, there are a lot of things I admire about Amazon, and even more that I dislike. But, either way, I know I’d be naive not to learn everything I can about them if I’m starting a company selling physical products online today.
So, this past weekend I re-read The Everything Store: Jeff Bezos and The Age of Amazon by Brad Stone. Here are my top 3 learnings:
On being a big fish.
“Jeff was super clear from the beginning,” says Neil Roseman. “If somebody else can sell it cheaper than us, we should let them and figure out how they are able to do it.”
I had an old boss who liked to say that the Amazon product detail page is like the modern day billboard, and he was right — if nearly half of all product searches start on Amazon, listing your product on Amazon is a highly effective way to get a lot of eyeballs on your brand.
On the other hand, as a brand selling on Amazon, you’re putting yourself in a position to let Amazon learn everything they can about your brand and use that knowledge to put you out of business.
It’s like the guy who went to live with bears in the wilderness. Everything was all well and good until the bears got hungry.The Un-Store
Brad Stone named his book after Jeff Bezos’s early vision for his company, “the everything store”: an internet company that sells nearly every type of product, all over the world.
After re-reading the book, I was reminded of a similar, but slightly more nuanced Amazon concept known as the un-store.“Being an un-store meant, in Bezos’s view, that Amazon was not bound by the traditional rules of retail. It had limitless shelf space and personalized itself for every customer. It allowed negative reviews in addition to positive ones, and it placed used products directly next to new ones so that customers could make informed choices.”
Additionally, being an un-store allows Amazon to create separate business units that have nothing to do with retail. AWS, Amazon’s streaming services and Amazon Prime are just a few of the things that make it so difficult for retailers to compete against Amazon.
They’re not just a retailer; they’re a technology company.Amazon.love
Given Amazon’s ruthless reputation, I was surprised to learn that Jeff Bezos has spent considerable time thinking about Amazon’s image as a brand. He wrote down some of these thoughts in an internal memo entitled Amazon.love.
“Some big companies develop ardent fan bases, are widely loved by their customers, and are even perceived as cool,” he wrote. “For different reasons, in different ways and to different degrees, companies like Apple, Nike, Disney, Google, Whole Foods, Costco and even UPS strike me as examples of large companies that are well-liked by their customers.” On the other end of spectrum, he added, companies like Walmart, Microsoft, Goldman Sachs, and ExxonMobil tended to be feared.
Despite Bezos’s intentions to be a “cool” brand, I’d argue that the last decade has not been kind to Amazon’s public perception.
Maybe this reveals one of Amazon’s fundamental weaknesses. Maybe there are ways to compete with Amazon on fronts other than convenience, fast shipping, and endless selection.
To be the brand that calls upon people’s higher desires, not their most base ones.
It’s almost a cliche that to succeed in business you need to solve your customer’s problem better than their alternatives. Brand and do-gooder aspirations are typically viewed as “nice-to-haves”, not necessities.
My hypothesis is that building a brand people feel good about buying from actually does solve a real problem. A need. That’s my opportunity.