Having conquered online retail, Amazon expanded expeditiously into cloud computing, media, and advertising. How? Bezonomics--the title of my book and the term I gave to CEO Jeff Bezos's formula for success. It involves an obsession with customers, a mania for innovation, and a long-term point of view. But more than that, Bezos was one of the first to deeply integrate data, machine learning, the internet of things, and A.I. into his company's decision-making process, ensuring that Amazon would be driven by facts and radical transparency--and incredibly useful while working from home under lockdown. Here are some other surprising finds I wrote about:
I was amazed at how deeply A.I. is embedded in the company's activities.
Amazon was an early adopter of artificial intelligence, and has injected it into almost every aspect of its business. For example, the company used to conduct weekly retail reviews with up to 60 managers. They'd negotiate what to buy, how much, and which warehouses needed what amounts. Now, algorithms do all that.
My biggest surprise? Finding out that Jeff Bezos was cloning himself throughout the organization.
When I spent time inside Amazon, I learned that Bezos and his top lieutenants religiously use a shadowing program that has promising young managers follow their boss every day for two years. By the end, the "shadow" knows how Bezos and his best executives think and has internalized the Amazon formula to spread those ideas throughout the company. The clone has also earned Bezos's trust and can now take on huge responsibilities.
I was impressed by how quickly Amazon is moving into new industries.
Not many people realize that Amazon is becoming a finance company. Last year, it lent $1 billion to the entrepreneurs who sell their goods on the company's site. But those loans can be a wild ride for a small business. In 2016, one entrepreneur whose company sells travel pouches borrowed $300,000 from Amazon, only to wake up one morning during the busy holiday selling season and find that the algorithm had decided he was no longer creditworthy and canceled his line of credit. He never found out why his loan was pulled. (Luckily, he was able to obtain a loan from another Amazon seller and eventually dig himself out of his predicament.)
My key takeaway
Amazon has become a life-shaping force that every entrepreneur should know more about. Anyone seeking to run a thriving business in today's economy--especially one that competes with Amazon--needs to understand this juggernaut's relentless growth, the obsessive innovation that fuels it, and the founder at the heart of it all. In the new world of Bezonomics, all the rules are changing. And you can't win the game if you don't know the rules.