How does a company like Amazon go from startup to international powerhouse?
How would a company scale up that quick? Why would anyone even trust in the brand early on? I am curious to know how I can position my company to perhaps get as lucky as Amazon did.
This is one of my favorite questions because it has variations from Amazon to Google or Apple or Microsoft… however, it’s always the same reason and a similar story. While I was working on a startup project at Startup Oasis (https://www.startupoasis.co/) this question came up a lot, and everyone has an opinion about this, but I personally think is a combination of timing, effort and filling a gap on the market.
First of all, timing goes very well with the capacity for making something happen, so if you don’t have the proper infrastructure for your project, it’s not going to work. The effort comes down to innovation and offering something new, and all of the above would be pointless without proper marketing. You have to figure out what people want and how you can get it to them in the simplest way possible.
Several key factors.
Realized and defined a clear market opportunity. Book selling was archaic.
Timing was early to market when WWW was in its infancy and growing exponentially.
Raised lots of money.
Wide, wide adoption.
Delivers on its promises.
Amazon is very bold innovative and spends billions on R & D. They do not rest on their laurels and always seem willing to take chances. In most situations they seem to be a step or two ahead of the competition. Amazon Web Services is a great example. A few years ago you did not hear much about them today they are dominate in their space.
The Marketing strategy acquired by the amazon is highly appreciably. Brand marketing with the brand ambassadors is one of the main impact made by the amazon. people usually trust brands acquired by the stars.
It's the same formula as Google more or less. To repeat that kind of success you just need to recognize an opportunity of enormous scope and quickly figure out how to structure the company in a better way than anyone else has thought of to capitalize on it. Then assemble a top-teir board of directors, CEO, CFO etc, to complement your polished new business plan because investors invest in people - not ideas. Then throw the millions of dollars you raise into aggressive deployment of the plan. Hit fast and hard. Out-advertise your competition and sustain. Just don't make any significant mistakes and you will be laughing all the way to the bank. Eventually.
That brings us to the need for incredible stamina and patient investors. Amazon started in 1994. It made its first profit 7 years later in 2001 - $5 million on over 1 billion in sales. That equated to a whopping 1¢ per share. So seven years in, a few of the investors actually started to think that the Amazon biz plan just might not completely suck after all. Maybe they would one day get their money back.
Bezos must have done some pretty impressive presentations to have held off investors so long. He certainly beat the odds. Tech sector angels usually want to see a ROI in a year or two. The original biz plan called for 5 years to break even - just selling that was a incredibly impressive. But those two additional years must have been his best work.
ANTICIPATION and a boatload of cash backing your idea up in the initial stages.....Failing forward fast, and as suggested in other answers, find a Mission and Vision Statement that connects and then see if you can tap into the magical "IT" Amazon has "IT"
Always have a Detached Perspective at All Times
Look at one's business like a parent would that does not baby the company.
Check the Bigger flow of Time
Which direction would the industry go and why?
Never Limit Your Market
Your largest market may be on the other side of the planet.
Fast Growth, Fast Crash
Build your company like a family that would stick together like family for countless generations.
Place your heart and personal desires and allow others to catch on. New desires, new ethics, new trends, innovation brings new leaders.
Introducing Coffee to Japan
That was done a long time ago. My grandfather thought it tasted awful. By the age of 30, he didn't go a day without it. Today, Japan is the highest bidder of high quality coffee beans around the world. Be a map maker. Make your own charts.
I am open for any strategy consultation for those visionists. I will be happy to cook Japanese dinner while we discuss our exotic and innovative future.
Large finances, great marketing and media friends. And in the new world, I am not sure that migration can be done like that again. All commercial catagories have multiplied several times, so it would need to be a new space with a lot of appeal. It is getting harder to be new and different.
There is no simple answer to this question except at a very high level. But here is that attempt:
1. Offer a differentiated product or service with high value to a target niche audience (that niche mrket entry can expand over several years but must be naroow on market entry due to marketing and sales costs)
2. Use proven Management and leadership best practices to build their staff and company and develop systems for all key processes thta create value (see AirTightGrowth dot com)
3. Continue to innovate constantly for that ideal customer target market to stay ahead of copycats (i.e. Kindle, Echo, Amazon S3 services, Dot)
4. Hire the best people, especially managers and senior executives and pay competitive salaries, early on offering stock options instead of top salaries
My CEO and Entreprenurs Boot Camp available at Amazn on a 14 DVD set is an intensive two day course on this. Try this link: https://www.amazon.com/Complete-CEO-Entrepreneur-Boot-Camp/dp/1933082712/ref=sr_1_1?ie=UTF8&qid=1479232460&sr=8-1&keywords=CEO+boot+camp+c-level+enterprises
Bob Norton, CEO Coach, Advisor and Consultant
I'm a process guy. My comment would be that you put the processes in place that position it to be scaled. (Which, by the way, every business should do, whether they intend to scale or not -- since the same processes also help maximize the value of the business.)
At a VERY high level, I am talking about at least 4 elements: ensure that every key function works extremely well, make sure that each function is documented, make sure the documentation is understandable and teachable, make sure it does not depend on the owner (or any one person) for getting it done.
And by 'functions', I mean EVERYTHING, such as service, quality control, management, sales, marketing, etc., etc. Although there is a lot to scaling, the 4 elements I described are essential for making it operationally possible.
I guess "quick" is a very subjective term as Amazon was founded in 1994. As for international powerhouse, from a per statistical view, their footprint is rather limited outside of US.
Of course, there were a number of things they did right and executed well along with being in the right place at the right time with the boom of the internet/information age. However, if you go back to the early stages, what they really did well was figuring out the logistics of delivering overstock books at great discounts off the retail price. Because of that unique value proposition, they were able to gain the brand loyalty that you see today. That's why today, you still see Bezo's philosophy of delivering value at the expense of their bottom line. Because he knows once you associate great prices and reliable customer service with Amazon, then people will simply go with them instead of searching online for a slightly cheaper price. It's been documented that they have been slowly raising prices on things by a very small amount. They have developed many people's habit of looking on their site first. And for those who still do the price comparison, the small difference is not worth risking the customer service and Prime services. What might be a small amount to us individually, it's a big difference in their bottom line, which it all started by getting you hooked first and then slowly training us.
He learned everything they could from the book market and then scaled it to other categories. They didn't try to do everything all at once. Then they thought of ways to keep people on their platform by creating Kindle...which is pretty much what they are doing now with Echo and those dash buttons after their failed attempt at creating a phone in capturing our eyeballs and front-of-mind.
On top of that, they understand how companies like Google, Facebook, and Apple work when it comes to big data and how valuable that data is. So they can't afford to be left out on the sideline. Hence why they want to know everything about you and your habits through the portal of e-commerce and digital delivery versus social media (FB), search (Google), or communication (Apple).
So it's no secret why they went to the cloud service space, which is highly profitable but also gives them the backbone for user generated videos to compete against YouTube and their own advertising platform for added revenue even if you don't buy from them. After all, they don't need to be the one selling you the products directly, they simply need you to buy through Amazon so they can take a cut. In fact, the majority of the products you see today on Amazon aren't through Amazon at all.
Given all the examples of things they have been able to accomplish in the 20+ years, I don't think anyone would question why they are as big as they are today :P
Ka Pang / Creative Director / VolumeSquared.com
I just wrote a blog post on this very topic...might be helpful for you to read to get a better idea of how Bezos runs his company and leadership team. Here's the link: http://www.wom10.com/amazon-dominates-can-dominate-business/
Get lucky? Surely you jest. Brand Development is not a matter of luck. What you know matters. Who you know can be important but the single most important thing about building a brand is who trusts you. You must start with a vision of what the business can become, state your mission, get to know your potential customers intimately, find a profitable niche, position your organization so that you are an "only" and do everything in your power to earn the trust of people that will become your customers and then keep that trust so they come back again. (see video at www.BrandBrainTrust.com)
Luck may play part in finding a customer or a referral source at some point but Brand is not a process, it is a perception. Brand doesn't result from luck. Brand is the outcome of Trust.
That's a great question. Most startups 'like Amazon' who become unicorns 'successes' have been in the wings for a long while.
In my opinion, Amazon' was not an overnight success story but rather, grew to scale very rapidly because of it's "disruptive" model.
Amazon, like most, always anticipated the next in consumer changing habits, needs and demands and the main contributing factor was "timing".
In business growth and scaling, timing is everything and Amazon was able to execute at the right time.
Hope this helps and feel free to connect if I can be of further help.
Best of luck
This may be more oriented towards consumer goods brands, but the key is to really hone in and nail your company culture. Once you have a great company culture working through the company, it gets easier to scale the business without losing the core. I would check out this post if you want to learn more. www.lucidpress.com/blog/2016/03/28/smart-moves-from-the-early-days-of-great-brands/