Fixing failures of strategy

Amazon's failures story

It was March of 1999.

Jeff Bezos, the founder of Amazon, had just announced that his company would launch a new service called Amazon Auctions to help people sell “virtually anything online.” The idea was to create something that could compete with eBay. Bezos knew there were millions of people with goods to sell and he wanted Amazon to be the place where those transactions happened.

Greg Linden, a software engineer for Amazon at the time, recalled the project by saying, “Behind the scenes, this was a herculean effort. People from around the company were pulled off their projects. The entire Auctions site, with all the features of eBay and more, was built from scratch. It was designed, architected, developed, tested, and launched in under three months.”

Amazon Auctions was a spectacular failure.

Just six months after launch, management realized the project was going nowhere. In September 1999, they scrambled to release a new offering called Amazon zShops. This version of the idea allowed anyone from big companies to individuals to set up an online shop and sell goods through Amazon.

Again, Amazon swung and missed.

Neither Amazon Auctions nor Amazon zShops are running today. In December 2014, Bezos referred to the failed projects by saying, “I’ve made billions of dollars of failures at Amazon.com. Literally billions.”

Undaunted, Amazon tried yet again to create a platform for third-party sellers.

In November 2000, they launched Amazon Marketplace, which allowed individuals to sell used products alongside Amazon’s new items. For example, a small bookstore could list their used textbooks directly alongside new ones from Amazon.

It worked.

Marketplace was a runaway success.

In 2015, Amazon Marketplace accounted for nearly 50% of the $107 billion in sales on Amazon.com.

A Failure of Strategy is a WHAT problem.

By 1999, Amazon had a clear vision to “be earth’s most customer centric company.” They were also masters of getting things done, which is why they were able to roll Amazon Auctions out in just three months. The WHY and HOW were handled, but the WHAT was unknown.

There are three primary ways to fix Failures of Strategy

1- Launch it quickly

2- Do it cheaply

3- Revise it rapidly

Launch it quickly

Some ideas work much better than others, but nobody really knows which ideas work until you try them. Nobody knows ahead of time—not venture capitalists, not the intelligent folks at Amazon, not your friends or family members. All of the planning and research is just pretext. Actually, you haven’t really started working on your idea till you’ve launched.

Because of this, it is critical to launch strategies quickly. The faster you test a strategy in the real world, the faster you get feedback on whether or not it works. Note the timeline Amazon operated on: Amazon Auctions was released in March 1999. Amazon zShops was released in September 1999. Amazon Marketplace was released in November 2000. Three huge attempts within 20 months.

Do it cheaply

Assuming you have achieved some minimum level of quality, it is best to test new strategies cheaply. Failing cheaply increases your surface area for success because it means that you can test more ideas.

Additionally, doing things cheaply serves another crucial purpose. It reduces your attachment to a particular idea. If you invest a lot of time and money into a particular strategy, it will be hard to give it up on that strategy. The more energy you put into something, the more ownership you feel toward it. Bad business ideas, toxic relationships, and destructive habits of all kinds can be hard to let go once they become part of your identity.

Testing new strategies cheaply avoids these pitfalls and increases the likelihood that you will follow the strategy that works best rather than the one you have invested in the most.

Revise it rapidly

Strategies are meant to be revised and adjusted.

You’d be hard pressed to find a successful entrepreneur, artist, or creator who is doing exactly the same thing today as when they started. Starbucks sold coffee supplies and espresso machines for over a decade before opening their own stores. 37 Signals started as a web design firm before pivoting into a software company that is worth over $100M today. Nintendo made playing cards and vacuum cleaners before it stole the hearts of video game lovers everywhere.

Too many entrepreneurs think if their first business idea is a failure, they aren’t cut out for it. Too many artists assume that if their early work doesn’t get praised, they don’t have the skill required. Too many people believe if their first two or three relationships are bad, they will never find love.

Imagine if the forces of nature worked that way.

What if Mother Nature only gave herself one shot at creating life? We’d all just be single-celled organisms. Thankfully, that’s not how evolution works. For millions of years, life has been adapting, evolving, revising, and iterating until it has reached the diverse and varied species that inhabit our planet today. It is not the natural course of things to figure it all out on the first try.

So if your original idea is a failure and you feel like you’re constantly revising and adjusting, cut yourself a break.

Changing YOUR strategy is normal. It is literally the way the world works.

Article from James Clear - see https://jamesclear.com/