Amazon’s Day 1 thinking: eCommerce giant to retain a startup mindset?

In some of our earlier blog posts (link), we have been highlighting how startups need to start thinking and acting like a business (or small business). In a corollary to that thinking, larger tech firms are also trying to retain the essence of a ‘startup’ thinking.

Amazon, by all accounts, is a multi-billion 400-pound-gorilla in the eCommerce Space. I reviewed Amazon’s growth and reach in an earlier article of mine “What’s the big deal about $1 out of every $2 spent online in the US going to Amazon?” (link) In the article, I examined the topic building on the report in ILSR, “behind the packages on the doorstep and the inviting interface, Amazon has quietly positioned itself at the center of a growing share of our daily activities and transactions, extending its tentacles across our economy, and with it, our lives” –

  • Half of all U.S. households are subscribed to the membership program (Amazon Prime)
  • Half of all online shopping searches start directly on Amazon
  • Amazon captures nearly one in every two dollars that Americans spend online.

On the heels of that article comes Amazon CEO Jeff Bezos’ annual letter to shareholders in which he implores shareholders on the need to retain the “Day 1” thinking at Amazon. (link to shareholder report).

So, what exactly does Mr. Bezos mean by retaining the “Day 1″ thinking? He is essentially emphasizing the need to retain the startup mindset by asking “How do you keep the vitality of Day 1, even inside a large organization?.” He explains how this can be done :

  • True Customer Obsession – There are many ways to center a business. You can be competitor focused, you can be product focused, you can be technology focused, you can be business model focused, and there are more. But in my view, obsessive customer focus is by far the most protective of Day 1 vitality.
  • Staying in Day 1 requires you to experiment patiently, accept failures, plant seeds, protect saplings, and double down when you see customer delight. A customer-obsessed culture best creates the conditions where all of that can happen.
  • Resist Proxies – As companies get larger and more complex, there’s a tendency to manage to proxies. This comes in many shapes and sizes, and it’s dangerous, subtle, and very Day 2.
  • To keep the energy and dynamism of Day 1, you have to somehow make high-quality, high-velocity  Easy for start-ups and very challenging for large organizations.

Mr. Bezoz concludes his letter to shareholders by stating “As always, I attach a copy of our original 1997 letter. It remains Day 1.”

A WSJ article builds on this by stating:

“As he does every year, Mr. Bezos stressed the importance of putting customers first and keeping a startup mentality, attaching a copy of his original letter to shareholders from 1997. In his letter this year, Mr. Bezos cited the importance of focusing on customers, avoiding proxies, adopting outside trends and making fast decisions—themes he has hit on in the past.”

We will continue to watch how Amazon tries to retain a ‘startup’ mindset, and it will also be interesting to see if other larger eCommerce or tech-giants can retain and nurture the startup-DNA as they continue to grow.

Guest post by Mohan K. The author is an Enterprise Architect, technology transformation executive and digital strategist. He regularly contributes to

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