One question from a shareholder during a recent Amazon shareholder meeting stirred quite a response from the CEO and founder Jeff Bezos. The question was:
Amazon seems to be executing well lately — is the company taking enough risks? If it's still Amazon's philosophy to make bold bets, I would expect that maybe some of them wouldn't work out, but I am just not seeing that. So, my question is where are the losers?
The question struck a chord with us as well since we just wrote about the power of failure in the invention process. Bezos started out by mentioning that 99% of all innovations at Amazon are incremental and much less critical. The Kindle he says was definitely a bet:
When you look at something like, go back in time when we started working on Kindle almost seven years ago. There you just have to place a bet. If you place enough of those bets, and if you place them early enough, none of them are ever betting the company. By the time you are betting the company, it means you haven't invented for too long. If you invent frequently and are willing to fail, then you never get to that point where you really need to bet the whole company.
Bezos mentioned that Amazon's culture is built on taking risks, they don't give up easy:
We are stubborn on vision. We are flexible on details. We don't give up on things easily. Our third-party seller business is an example of that. It took us three tries to get the third-party seller business to work. We didn't give up.
While Bezos did not mention any specific risks which resulted in failures a few occured to us:
- Amazon A9 - which had a quiet slow death.
- Amazon Wine Store - which was closed down in 2009.
- Amazon Endless - it's still unclear as to how well this is working out but one cannot help but wonder of Zappos acquisition meant it didn't capture enough market share.
- Amazon Unbox/Video On Demand- which still seems to be kicking around but does not have a big market share compared to Netflix and iTunes.
- Amazon Fresh Food Delivery - does lack of expansion mean it's not scaling out as quickly as it should be?
So Amazon obviously has a number of failures. Could it be that Amazon brand is so big and ubiquitous that it's hard to remember and notice these failures?