How influential is Amazon’s business model in our society today?
Brian Dumaine, the author of Bezonomics asked an acquaintance working at Bain & Company…would you like to co-author a book on how to compete with Amazon?
The acquaintance replied…we are making so much money consulting our clients on that very subject…why give away the secrets?
Reference: Bezonomics: How Amazon is Changing Our Lives and What the World’s Best Companies Are Learning From It …by Brian Dumaine
Bezos Day 1 Credo
- Find your passion to invent
- Always think long term
- Be very, very customer-centric
What is Amazon’s Flywheel?
The Amazon Flywheel is a strategy that creates a virtuous cycle by leveraging a an exceptional customer experience to drive traffic to the platform and and its third-party sellers.
This improves the selections of goods, and Amazon further improves its cost structure so it can decrease prices which attracts more traffic which spins the flywheel faster as it continues to grow larger over time.
Artificial Intelligence (AI) and Machine Learning models are still in developmental stages at best for most companies…
Amazon is the real deal and pioneered the new business model for the 21st century,
Amazon consumes unprecedented levels of customer data and applies Artificial Intelligence and Machine Learning algorithms to become a self-learning business model.
As Amazon learns more about the customer’s needs, wants, and desires…it begins to make more accurate product recommendations.
Customer satisfaction increases…as do the sales…and the flywheel spins faster.
Amazon Integration – a personal Inventory
While writing this post, I paused to think about how much Amazon is involved in my everyday life…
-Amazon Kindle Fire tablets (around the house and under car seats?), some screens cracked, some not, some in use, some not…I can’t even remember when I bought them or if they were Christmas gifts.
–AWS: Switched from studying for Cisco certification to AWS Certified Cloud Practitioner midstream.
–Prime Video: Originally built to be an incentive to get you to sign up for Amazon Prime (worked on us), now my wife and I are working our way through The Man in the High Castle.
–Prime Music: Driving home from Pittsburgh (2.5 hour drive), was having fun with free version (2 million songs) of Prime Music. Using Alexa voice commands to request tunes….9 out of 10 songs I wanted were available…I got pissed off when Neil Diamond’s – Sweet Caroline was not on the free verson…
What else could I do?
Alexa recommended I verbally request a 30 day trial of the full version of Prime Music…
So I did…
I listened to the songs I wanted…my credit card was charged 30 days later and it’s still a digital service I enjoy today…
Customer-centric…yes. Amazon makes it too easy to not buy.
Whole Foods and The Last Mile -2 Day Delivery…1 Day Delivery…how about fresh food within hours?
Logistically “the last mile” is the most difficult. How does Amazon plan to tackle this endeavor?
By vertically integrating Fleet Operations and creating business opportunities leveraging it’s backbone technology of course.
Naturally, this is a pilot for electric powered and eventually autonomous self-driving fleet delivery vehicles.
Staying true to his Day 1 Credo, Bezos is thinking long term with his Blue Origin project. For the purpose of …Colonizing the Moon…not even going there.
I guess when you’re the worlds richest person, life gets boring here on Earth?
My book summaries are biased from the start because I wouldn’t publish them if I didn’t like the book. Having said that, Bezonomics was a great read/listen.
It’s not all apple plums and cherry blossoms, Bezos does come under fire for accusations about stressful labor conditions which the book covers in great detail. Also, with a company growing as such speed and scale, Anti-Trust and Government opposition becomes inevitable…also covered well in the book.
Despite these things, I’ve come to two conclusions after listening to this book:
- It’s great being a customer of Amazon.
- All business’s need to get started on their own Flywheel and start spinning.