#8: Amazon—The Crazy Business Strategies that Rewired Our Brains and Changed Shopping Forever

Summary

Why That Worked – Episode #8: Amazon—The Crazy Business Strategies that Rewired Our Brains and Changed Shopping Forever

Release Date: February 24, 2025
Host: StoryBrand.ai (Donald Miller)
Co-Host: Kyle Reed

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Introduction

In this episode of Why That Worked presented by StoryBrand.ai, hosts Donald Miller and Kyle Reed delve into the extraordinary business strategies that propelled Amazon into one of the world's most successful companies. They dissect the key elements behind Amazon's dominance, offering actionable insights for businesses aiming to emulate its success.

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Amazon's Customer Obsession

A central theme of the discussion is Amazon's relentless focus on customer satisfaction. Kyle Reed emphasizes, "Customer obsession gets you there in a healthier way" (31:40), highlighting how Amazon prioritizes understanding and meeting customer needs above all else.

• Quote:
  Jeff Bezos: "At the very top of the list is customer obsession... It's the right one. I think it's better than product obsession even." (34:39)

This obsession drives Amazon to continuously innovate and streamline the shopping experience, ensuring customers find what they need effortlessly.

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Ease of Buying and Operational Excellence

Amazon's success is largely attributed to making the purchasing process as seamless as possible. The hosts discuss how Amazon's principles of ease of ordering, wide selection, competitive pricing, and efficient shipping have transformed consumer behavior.

• Ease of Ordering:
  Kyle Reed explains, "They've made it so ridiculously easy. With Prime, I don't even have to think about shipping" (12:36).

• Operational Excellence:
  The hosts touch upon Amazon's focus on efficiency and execution. "Operational excellence is massive. He focuses on efficiency and execution, believing that streamlined operations lead to better customer service and profitability" (36:22).

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Innovation and Experimentation

Amazon's culture of continuous experimentation allows it to stay ahead of market trends and adapt swiftly to changing consumer demands. The discussion highlights initiatives like Amazon Web Services (AWS) and past ventures such as the now-defunct Rdio streaming service.

• Quote:
  Unnamed Speaker: "Amazon encourages a culture of experimentation where teams can test ideas rapidly and learn from failures" (14:33).

This approach fosters an environment where innovation thrives, and failures are viewed as learning opportunities rather than setbacks.

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Long-Term Thinking and Strategic Investments

Amazon's strategy involves making long-term investments that may not yield immediate returns but pave the way for sustained growth. The hosts discuss how initiatives like Amazon Prime were initially met with skepticism but have become cornerstone services contributing significantly to Amazon's revenue.

• Quote:
  Kyle Reed reflects, "They knew overarching that something we affect today is going to bear fruit three years from now" (22:34).

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Talent Development and Two-Pizza Teams

Amazon's emphasis on building and nurturing a talented workforce is another pillar of its success. The concept of "two-pizza teams"—small, agile groups that can innovate and execute quickly—minimizes bureaucracy and enhances accountability.

• Quote:
  Unnamed Speaker: "He introduced the concept of two-pizza teams. Small agile groups that can innovate and execute quickly, minimizing bureaucracy and fostering accountability" (29:24).

This strategy ensures that even with a vast number of employees, Amazon can maintain speed and efficiency in its operations.

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Personalized Recommendations and Customer Experience

Amazon excels in providing personalized shopping experiences through sophisticated recommendation algorithms. Features like "Customers who bought this also bought" enhance user engagement and drive additional sales.

• Quote:
  Kyle Reed notes, "It's mind Boggling to think all the dominoes that fall into place and the leadership and his team, how they think through that" (20:38).

The ease of use, combined with extensive product selection and customer reviews, builds trust and encourages repeat purchases.

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Subscription Services and Recurring Revenue

Amazon Prime exemplifies the power of subscription models in generating steady revenue streams while enhancing customer loyalty. The hosts discuss how subscription services simplify the buying process and ensure customers receive timely products without repeated manual orders.

• Quote:
  Unnamed Speaker: "I won't run out right now, I'm out of my coffee right now and I wouldn't run out about a subscription" (21:35).

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Data-Driven Decision Making

Amazon's reliance on data to drive business decisions ensures that every strategic move aligns with customer preferences and market demands. This data-centric approach minimizes risks and maximizes the effectiveness of business strategies.

• Quote:
  Unnamed Speaker: "We're making decisions based on data. This is what the people want" (27:00).

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Conclusion and Key Takeaways

The episode concludes with a summary of the five critical elements behind Amazon's success:

1. Customer Obsession: Prioritizing customer satisfaction in every decision.
2. Long-Term Thinking: Investing in strategies that ensure sustained growth.
3. Innovation and Experimentation: Encouraging a culture where experimentation is welcomed and failures are learning opportunities.
4. Operational Excellence: Streamlining operations to enhance efficiency and profitability.
5. Talent Development: Building and nurturing a skilled, agile workforce through strategies like two-pizza teams.

Final Quote:
Unnamed Speaker: "If you don't communicate clearly, all your emails, your website, social media posts, everything you're communicating will be ignored" (19:15).

These principles not only highlight Amazon's path to success but also offer valuable lessons for businesses aiming to thrive in a competitive landscape.

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Actionable Insights for Businesses

• Simplify the Customer Experience: Reduce friction in the buying process to encourage purchases.
• Invest in Innovation: Continuously test new ideas and be willing to pivot based on data-driven insights.
• Focus on Long-Term Goals: Make strategic investments that may not pay off immediately but contribute to long-term success.
• Foster Operational Efficiency: Streamline your operations to improve customer service and profitability.
• Develop and Retain Talent: Build agile, skilled teams that can execute quickly and effectively.

By adopting these strategies, businesses can enhance their growth trajectory and build a loyal customer base akin to Amazon's.

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Notable Quotes with Timestamps

• Jeff Bezos: "Customer obsession instead of competitor obsession... better than product obsession even." (34:39)
• Kyle Reed: "They've made it so ridiculously easy. With Prime, I don't even have to think about shipping." (12:36)
• Unnamed Speaker: "Amazon encourages a culture of experimentation where teams can test ideas rapidly and learn from failures." (14:33)
• Jeff Bezos: "Customer obsession gets you there in a healthier way." (31:40)

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Final Thoughts

This episode offers a comprehensive analysis of Amazon's business strategies, emphasizing the importance of customer-centric approaches, innovation, and operational excellence. By understanding and implementing these principles, businesses can navigate the complexities of the modern marketplace and achieve lasting success.

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For more insights and strategies to grow your business, visit StoryBrand.ai.

Transcript

[Kyle Reed]

Hey, it's Kyle Reed, co host of the why that Worked podcast presented by StoryBrand AI. I'm jumping in before today's episode with a big thank you. Thank you for spending your time with us each week, tuning in and sharing your feedback on how the show is resonating. In fact, I'd love to share some of your comments. Here's what you've been saying on Apple Podcast. Episode one is mind opening. Love the simplicity shared of how to create a framework. Such a great episode. Fantastic. Really interesting and useful for my work. Thank you. Love the new format. The last two episodes have been life changing. Keep up the great work. Here's some comments we read on YouTube. Awesome show. You all love it. Love the new series. Great episode. It's both interesting and applicable. Can't wait for next week's episode. This is why we do what we do here at StoryBrand, empowering you to clarify your message, connect with your audience and grow your business. And your feedback and comments help us make the show even better so we can keep bringing you episodes that deliver more insights you can use in your business and your life. So keep them coming. Leave us a review on Apple Podcasts or Spotify and share your thoughts in the comments on YouTube. Your feedback helps us know what's exactly resonating with you so that we can select topics and deliver new fun, value packed episodes. And if you don't ever want to miss a new episode of the show, follow why that Worked. Wherever you listen to podcasts and like and subscribe on YouTube, thank you so much for being a part of this journey. We can't wait to hear what you have to say.

[Donald Miller]

You're listening to the why that Work podcast presented by StoryBrand AI. If you've ever wondered why certain brands, trends or cultural phenomena find success while others don't, you're in the right place. Every week we unpack why something worked, then give you actionable insights that you can use in your own life. Now let's dive in with your hosts, Donald Miller and Kyle Reed.

[Unnamed Speaker]

Kyle, Brutal honesty. How many orders do you think you make on Amazon a year?

[Kyle Reed]

I mean. 500?

[Donald Miller]

Really?

[Kyle Reed]

It's absurd.

[Unnamed Speaker]

I wasn't expecting that.

[Kyle Reed]

Maybe that's too many. 500 it's bad.

[Unnamed Speaker]

I bet you now I laugh at that. I bet you I do. 500. Here's the knowing.

[Kyle Reed]

Here's the other thing that's like just annoying is it drives me crazy. I start to get frustrated of like how many boxes I have to break down.

[Unnamed Speaker]

I bought and probably have let Go of the domain name box boy.

[Kyle Reed]

Yeah.

[Unnamed Speaker]

B O X B O I. Because I had a business idea of going around and picking up people's Amazon boxes and recycling, I would pay 50 bucks a month for somebody to pick up our boxes.

[Kyle Reed]

Yeah, honestly, we probably should just stop recording now and go make that business. Because that would work.

[Unnamed Speaker]

Because that would absolutely work. In fact, I'm an investor in my brother in law's glass recycling business here in Nashville. He'll bring you a bin, by the way, and for 20 or 30 bucks a month, I can't even remember. It's. I think it's like 15 bucks a month. He'll come and pick up your glass once a month and he gives you the bin. And I can't remember the website, otherwise I would promote him. Right now I'm a terrible investor, but I told him if you get one of those trucks with a trailer that you chop, you know, you shred trees. You know what I'm talking about?

[Kyle Reed]

In your neighborhood.

[Unnamed Speaker]

I said just buy one of those and then shred boxes. Shred boxes. You wouldn't even have to take it to the recycling center except like every fifth run because the thing would hold so many boxes. If that's a possibility. I mean, that's. There's. And I would pay you $50 a month to get the boxes out of our mudroom.

[Kyle Reed]

Yes.

[Unnamed Speaker]

Because when they pile up, we throw them down the stairs and then the next person goes have to pick them up and take them around the corner.

[Kyle Reed]

So I'm an investor in a company too.

[Unnamed Speaker]

Are you really?

[Kyle Reed]

It's a 12 year old boy in our neighborhood who shows up and he takes my trash cans from the top of the hill to down my driveway. How much do you pay him? $2 a trip. That's a good. That's great. I love.

[Unnamed Speaker]

You know we got a snowstorm coming tomorrow. Yeah, four bucks.

[Kyle Reed]

Yeah, yeah, exactly.

[Unnamed Speaker]

Double your money.

[Kyle Reed]

So, you know, if someone come pick up my boxes, I am all in. So. Yeah, you. I say 500 because it feels like I've broken down 500 boxes this year.

[Unnamed Speaker]

Oh, gosh. Well, why? That's the question. Right? Because the. Why did that work? Amazon.com There are. First of all, let's be honest, there are a thousand reasons and this is arguably top five most successful companies in the history of the world. Right?

[Kyle Reed]

Yeah. Oh, yeah.

[Unnamed Speaker]

They've changed everything. They shut down brick and mortar bookstores.

[Kyle Reed]

That's how they started.

[Unnamed Speaker]

Yeah, yeah.

[Kyle Reed]

I mean, just the. Where. I don't think Bezos was this like. I'M gonna take over the book publishing industry.

[Unnamed Speaker]

Oh, I think he was.

[Kyle Reed]

You think so?

[Unnamed Speaker]

Oh, yeah.

[Kyle Reed]

Really?

[Unnamed Speaker]

I do.

[Kyle Reed]

See, I thought I was perceived it as he was just looking as an entry into this warehouse. Kind of like, I can hold more than you can. Well, use the Internet.

[Unnamed Speaker]

Buddy of mine was in a hotel and went to work out in the, in the, you know, the hotel gym, like Holiday Inn Express kind of a thing. And Doug Kahn, did you meet Doug Khan? Doug used to be with us. And Doug is running on a treadmill and there's this guy, nerdy guy, running on the treadmill next to him. And they struck up a conversation what he'd do. And he said, I have a company called Amazon.com he goes, oh, you're kidding me. I actually bought a book from you guys and sorry, I didn't, you know, congrats on all your success. And Jeff said, well, you bought a book from us, but soon you're gonna buy everything from us. And he went on and like, you're know you're gonna buy everything. You're gonna buy your dish soap, you're gonna buy your car, you're gonna buy a rug, you're gonna buy everything from Amazon.com and Doug was like, that dude is crazy. He walked out of the gym. He is not. He's delusional and he's nuts. Because that's not how it works. You go to different stores to buy different things. And he did it. He pulled it off. I think Jeff Bezos is, first of all, I like him.

[Kyle Reed]

You do?

[Unnamed Speaker]

Yeah, I do. I like him because he's such an incredibly strategic thinker. I think he's somebody who could be evil, but he's not. He's just ridiculously ambitious. And there's no question he's, you know, disrupted a lot of businesses. There are a lot of people, a lot of small businesses have been really disrupted by Amazon.com and a lot of other small businesses have been created because of the existence of Amazon.com you know, in the book market. Here's some interesting stuff about the book market. I think it's 5% of their sales are books now. So 95% are non books.

[Kyle Reed]

That's more than I would actually have thought.

[Unnamed Speaker]

But it's more than 80% of the market of books. So 5% of Amazon is 80% of all books being sold. And the problem is, at some point, as an author, they can actually box me out. Just like Napster and Spotify. Napster is obviously antiquated, but Spotify has done the music that they actually won't have to pay us anymore. They're already doing it in the sense that if you download an ebook but don't read the whole thing, they don't pay you the whole commission, they don't pay the whole royalty. And they're going to be able to do that with audible too, where normally I would get a commission and they're not going to actually pay you for. And nobody can do anything about that because that's the only way we can actually distribute our books. So I personally am under threat of Jeff Bezos and you don't get to be the richest person in the world or vying for the richest person, depending on what week it is. He and Elon Musk without being cutthroat. And he's. I think he's actually. So when you say no, I don't think he ever intended. I think it was. I think it's actually exactly what he intended to do.

[Kyle Reed]

Yeah, it's great. I'm going back to your, you know, just that conversation about you're going to buy everything from Amazon.com and just listen.

[Unnamed Speaker]

The people who have the biggest problems with it are buying things on Amazon every day.

[Kyle Reed]

Yeah, well, of course, because.

[Unnamed Speaker]

And that's, that's when you know you've created some sort of business that you have such an advantage and you've made it so easy and the prices are so great that people who hate you are buying from you.

[Kyle Reed]

Yeah. It reminds me of the people who will protest Chick Fil A and then go get lunch there the next day. I caught onto that too. Because back to your original question. How many boxes or how many purchases have I made? That's primarily where I shop. The idea of going to pick up, you know, shampoo at Walmart or Target, like, it's so foreign to me today. And what, six years ago, five years ago, I would, that would be if I told the opposite of like, you're going to order everything online and it's just going to come to your house the next day. Like there's no, you know.

[Unnamed Speaker]

And it's working and it's working. In 2003, 5.26 billion dollar company now, that would be one of the largest companies in America, I would think today. Yeah. 5.26 billion. I have a friend who sold his company for 6 billion and I think of that as massive. Guess what? 2022. I'm not going to let you see this number. Guess what? 2022 in yearly revenue, top line revenue. Amazon.com?

[Kyle Reed]

I'M going to embarrass $14 million or billionaire. Fourteen billion.

[Unnamed Speaker]

Close.

[Kyle Reed]

Okay, 514 billion.

[Unnamed Speaker]

Was a 14 in there somewhere?

[Kyle Reed]

Five hundred, yeah.

[Unnamed Speaker]

Five hundred and fourteen. Now to put that in perspective. Gosh, I don't even know how to put it in perspective.

[Kyle Reed]

That's more, I mean, you know, GDP of like every. I mean, there's that. Yeah, outrageous.

[Unnamed Speaker]

I think Amazon is a. I mean, not Amazon, Apple, I think is a trillion dollar. But I don't know if that's their valuation or their annual revenue. I don't know. Not as profitable, by the way. 514 billion. They're not making anything like that in terms of profit because the margins are so paper thin. But let's actually talk about why. We're talking about why. I think the number one reason, and today I don't have a list, but I would say the number one reason is actually they've made buying easy. Now they had to come up. There had to be an experiential learning curve from the end user. And the big knock on Amazon, for me personally, early on I lived in Portland, Oregon, and Amazon was up the road in Seattle. And when they were just a bookstore, the big knock was I can't have it now. And that was now. Nobody even thinks about that. But I can't have it right now. I can't get that book right now. And that began to change when I would go down to Powell's, the largest used bookstore. The second biggest bookstore in the world was Powell's. Probably still is. Well, no, they're the biggest independent bookstore. But Powell's, which was heaven for me, I've spent several thousand hours in pals books. Reading books and drinking coffee was when I would go down there and it wasn't there. The book that I wanted wasn't there. And then I had to order it on Amazon. And that's how they got me used to ordering it. Because now, well, Powell's probably has it, but Amazon definitely has it. And then the second thing that Jeff Bezos would say, one is ease of use. They've just made it incredibly easy to buy something. The second thing is the price was lower so I could buy it and the price would actually be lower. And those two things set them up to succeed. And I get into this a lot when I'm doing strategic consulting with businesses of why do I have to click this and then this to buy this? Because you're gonna get beat by somebody who doesn't make people click twice. And they're like, really? Do you really think yes. Like somebody would actually go to somebody else because they have to move their finger twice. Yes. Because psychologically they have made it easier. And you have now. Jeff Bezos has made it so that you have to make it so ridiculously easy. Now with Prime, I don't even have to think about shipping, and it actually comes to my door. What's interesting is Amazon.com has not only replaced the local grocery store and bookstore and hardware store, they've replaced something even more powerful to replace your to do list. In other words, instead of, like, writing down I need light bulbs, I just buy them. And it's easier to buy the light bulbs on Amazon than it is to write it on a piece of paper. So I'm guilty of, like Betsy, my beautiful, wonderful wife, batches her orders so that they come once a week so they all come in less boxes. I need to do that, but I haven't. I know. What a wonderful.

[Kyle Reed]

What a dream. You break down as many boxes. Wow.

[Unnamed Speaker]

And I have not done that yet because I think you have to press three buttons to do it. So I haven't saved the world yet because of the three buttons. And, you know, my finger's a little bit sore.

[Kyle Reed]

Things to do.

[Unnamed Speaker]

Yeah, things to do. But I literally will buy light bulbs and then later realize we need cat food and we'll buy cat food separately. And I don't even think about it. So I think those are the two big reasons the price was better, and he just made it easier to get it.

[Kyle Reed]

Yeah. And in that, it reminds me of what I was looking at in some of the research for this episode was it really started asking questions of, like, okay, how do you have such 4 site to see down the road what people will want? And one of the things I admire about Amazon and Bezos is they were constantly experimenting with things too. Do you remember?

[Unnamed Speaker]

That's right. It's part of their. It's part of their business.

[Kyle Reed]

Do you remember back in the day, there used to be a thing where you could get for free a button that you could put on your washing machine to order your favorite? I remember that.

[Unnamed Speaker]

Do you remember that?

[Kyle Reed]

And you could push it and it would order for you.

[Unnamed Speaker]

I remember.

[Kyle Reed]

That lasted like, what, a year? Let's call it. Yeah, whatever. It didn't go very well, but he.

[Unnamed Speaker]

Was even experimenting with making it easy. And you know what? That would have worked if it weren't for the smartphone.

[Kyle Reed]

Yeah, well, but I see.

[Unnamed Speaker]

I think now you're carrying the button.

[Kyle Reed]

What I think they were doing was they were just testing to your point. With a one click. So now to the point. Now, I don't know if you have this where it's like reoccurring subscriptions or like, hey, it seems like you're out of dish soap. Would you like for us to order you more like to your point about the to do list. They're getting it to such a place where they're thinking forward. And so I think that's one of the things that I'm very fascinated about Amazon is they're so ahead of what you even think you need. And he actually, he says that, he says their core principles, consumer customer focused. And that a lot of customers don't even know the problems they have. And it's our job to figure that out for them.

[Unnamed Speaker]

I use the brain. I use storybrand AI to prepare for this episode. One of the things that it gave me was continuous experimentation. It said Amazon encourages a culture of experimentation where teams can test ideas rapidly and learn from failures. Promoting innovation and agility. That is a business principle that we can all. Everybody listening to this who runs a business. They're constantly experimenting, constantly experimenting and promoting things that work and killing things that don't.

[Kyle Reed]

Yeah, kill. And that's fascinating too. Cause I remember, you know, when streaming first started, Spotify wasn't even the US Yet. And Amazon had one of the first big streaming platforms called rdo. You ever heard of rdio? Rdio? I loved it. I loved it. It was incredible. And they shut it down. They shut it down. And I think it's because he saw Spotify's coming in. It's not. We're not doing this as well. This is a. You know, this isn't making the money. We're losing money doing this. We're gonna shut this down. And I was like, oh, I gotta move over to Spotify.

[Unnamed Speaker]

You know, he is. I have heard him say that the two things that have worked. He's only had two grand slams and Amazon prime and Amazon Web Services. Amazon Web Services is 80 billion of the 514 controls so much of the Internet.

[Kyle Reed]

It's unreal or.

[Unnamed Speaker]

Yeah, I don't know if it controls it. It houses it.

[Kyle Reed]

Well, how. But I mean, if they're down or they want to shut you down, you know, that was the big controversy a couple years ago was they shut down certain websites that were being protest because they were on aws.

[Unnamed Speaker]

Oh, is that right?

[Kyle Reed]

Oh, yeah. Some of these.

[Unnamed Speaker]

They didn't want that pushback.

[Kyle Reed]

They did not want. There was a. Somewhere couple of social media platforms were housed by Aws. And so when those, when they were kind of in the news, they shut them down, they took them out of the web store.

[Unnamed Speaker]

Okay, here's several reasons that they have made it easier. One is selection. And I would, I mean, look, I can run down to Ace Hardware and I can get this specific kind of screw that I need. The chances of them having it, at least psychologically in my mind, are about 40% the chance. I'm looking at it on Amazon, right? It's gonna be here tomorrow or I'm gonna go get it if I need it right now. And just the selection is there. I mean, if you said, man, there's this bread maker that is so amazing that blah, blah, blah, I don't even know where to go find that bread maker. Right? I don't know if it's at Target. I don't know if I gotta go over to, you know, some specialty kitchen store over in Belmead. If I go over there, chances are they're gonna have to order order it. But I'm looking at a picture. Is this it? There is a organic freeze dried coffee that a guy in my mastermind said he loves the taste of it and it doesn't give him headaches and it doesn't make him jittery. There's no anxiety with this caffeine. And he sent me an Amazon link. I bought it.

[Kyle Reed]

Push one button.

[Unnamed Speaker]

Yes. So for seven bucks, I buy a latte, an oat milk latte from Stay golden. Or I pour three of these things with some oat milk and some ice into this thing and it tastes just as good. And I now use it. And I have since sent that link to at least five other people. And you can't get that. You can't get that anywhere. You can't get that organic coffee at Whole Foods that I know of, by the way. I don't know the name of it. Everybody's like, what is it, Miller? I'm like, I actually don't know.

[Kyle Reed]

He'll text you later.

[Unnamed Speaker]

He'll text you later. Follow me on Instagram, Donald Miller and go back through. And I'm gonna put a picture of it on Instagram and you can see it. It's actually really, really terrific and it tastes so good. You can take it backpacking, which I don't do any backpacking, but I like saying that.

[Kyle Reed]

Well, yeah, you kind of out of yourself there. I would have went with that.

[Unnamed Speaker]

If I'm on an oil rig, I can drink it there.

[Kyle Reed]

Yeah, those solo hikes you do.

[Unnamed Speaker]

Okay, so the spread Ability. Now let's get back to. They've killed small business. That business no longer has to have any representation, any brick and mortar. They don't have to have a contract with Walmart, who by the way, is going to crush them on their margins. They can just sell it on Amazon. And so they've also helped a lot of small businesses too. One click ordering. Can we just talk about this for a second? The, the fact that you don't want to click three times.

[Kyle Reed]

I agree.

[Unnamed Speaker]

Buy.

[Kyle Reed]

Now, what I'm thinking about in my head is I'm thinking back to that Jeff Bezos. I think a lot of people have seen that interview of him where he's in that office and that dingy office with a crappy computer and a piece of paper and it says Amazon. And I'm thinking about that Jeff Bezos. And I'm thinking, does he realize that the most important asset to almost everyone is time? And does he have to.

[Unnamed Speaker]

Does he know that then? You're kind of wondering, does he know that then?

[Kyle Reed]

Because man, it feels like everything that they've rolled out is about saving humans time. And we don't have time.

[Unnamed Speaker]

Which is fascinating because they added 24 hours to the amount of time that you could get your product.

[Kyle Reed]

What do you mean?

[Unnamed Speaker]

I mean, I can go down to the grocery store and get dish liquid or I can click on this.

[Kyle Reed]

But it's funny because it's the convenience though.

[Unnamed Speaker]

It's done. It's gonna come to my door.

[Kyle Reed]

It's not a key word. It's done.

[Unnamed Speaker]

Same day delivery, by the way, was a big catapult of their growth. Was they actually shortened. This was miraculous to me. I don't know how they do this. I can order wall hanging nails and have them here by the end of the day. Where are those freaking nails? Where's that box of nails at that they're putting in this package and sending it to me?

[Kyle Reed]

It's brilliant because I think what I admire about Amazon and Bezos leadership is he goes, okay, here's our true North Stars.

[Unnamed Speaker]

Let's say it's safe, make it easy.

[Kyle Reed]

Okay, so then based off that, what do we do to do that? Well, we need to think about distribution. So where can we set up distribution centers around the country and how do we make it efficient? And oh, by the way.

[Unnamed Speaker]

And then how do we get labor to actually deliver these? Yeah.

[Kyle Reed]

And one of the things that most people order, well, we probably need to have it stocked there so we can get it within the day. It's kind of mind Boggling to think all the dominoes that fall into place and the leadership and his team, how they think through that.

[Donald Miller]

If you don't communicate clearly, all your emails, your website, social media posts, everything you're communicating will be ignored. Storybrand AI is like the world's best communication expert writing it for you. Imagine having the world's best communicator writing your tagline. Just type in the name of your company, answer a few prompts and voila. Hey, that's a good one. Use it to write your social media posts, website, wireframe emails, lead generating PDF, product or service descriptions, anything you need for your business. What would happen to your revenue if every word that left your business was crystal clear and worth paying attention to? StoryBrand AI is your competitive advantage. So you'll know, you'll say it clearly. Try it right now and let us write your customers tagline for free at StoryBrand AI. And now back to the show.

[Unnamed Speaker]

All right, selection one click ordering, same day delivery and then subscription services. Do you subscribe to anything?

[Kyle Reed]

Like, what do you mean?

[Unnamed Speaker]

Like I went to buy eight more boxes of that coffee that I just told you about and it was an option to subscribe and I thought it was cheaper. This one actually wasn't cheaper, but at least I wouldn't have to like I'm out right now, I'm out of my coffee right now and I wouldn't run out about a subscription. I don't do subscriptions only because my wife told me to use this almond oil on my face and I do. I use almond oil on my face. I'm 54. I look 53, easily 53. But I stopped using it because I forgot and now I've got like six bottles of almond oil. So now I'm afraid of the subscription button. But apparently it is a massive reason that they have succeeded. So another business principle you guys own businesses can, can use.

[Kyle Reed]

I think another one I'd add to the conversation is they're long term oriented.

[Unnamed Speaker]

Yeah, that's part of their leadership philosophy.

[Kyle Reed]

Yeah. So it's interesting to me that the very thing they're trying to do is save time. They are totally willing to play the long game. Yeah, they're totally like, you know, when Amazon prime first came out, I think it was like $79 for the year and you're just like, how are they making money? But they go, we know once we change. What is it now? Like 129, 130, 140, I don't even know.

[Unnamed Speaker]

Do you get free shipping and you watch all these movies for free.

[Kyle Reed]

But early on it was this price.

[Unnamed Speaker]

I don't know how they're making money on that.

[Kyle Reed]

They knew overarching that like, you know, something we affect today is going to bear fruit three years from now.

[Unnamed Speaker]

Yeah.

[Kyle Reed]

And the vision to kind of. That's why they work well.

[Unnamed Speaker]

I was going to go through their management ideas and that's part of that. Let me go back to how they made shopping easier because these are all things that we can learn from as leaders and owners of businesses. Selection one click ordering, same day delivery, subscription service, personalized recommendations.

[Kyle Reed]

Huge.

[Unnamed Speaker]

I always buy the thing that says Amazon recommends our overall pick. I think is what it says. Right. Remember that black and orange little places.

[Kyle Reed]

Overall pick or even like hey, customers often buy this with that. Right. So if you're buying a tool for your case, they often buy this.

[Unnamed Speaker]

I didn't realize I'm going to need this bit that this thing fits into. Masterful upsell easy returns. I wouldn't know. I don't return anything on Amazon.

[Kyle Reed]

But it is easy.

[Unnamed Speaker]

Is it?

[Kyle Reed]

Super. Oh, they've got it down. Such a point now go down to.

[Unnamed Speaker]

Whole Foods and drop it off.

[Kyle Reed]

You can or you can walk into UPS and just hand them the item. They don't, you don't have to be serious most of the time. You don't have to have a box. You just hand them the item with the slip, they scan it and they go, okay, you're good to go. That's how easy it is. The returns is insane.

[Unnamed Speaker]

All right. Customer reviews and ratings.

[Kyle Reed]

Massive, massive, massive.

[Unnamed Speaker]

When you're sitting there in the old days, you go to the hardware store and you're holding this thing, you're like, is this gonna work for whatever that do? You just. I usually go and I try to find some five star reviews and I go, okay, this person sounds legit and I only need to read one or two and then I pick it up. Mobile app convenience.

[Kyle Reed]

Yeah, I use the predominantly my phone.

[Unnamed Speaker]

Over desktop wish list and by the way, I'm reading the 10 or 11 things that they say are the customer oriented ideas that they came up with.

[Kyle Reed]

That's what story brand, brand that you got from them. Okay.

[Unnamed Speaker]

Yeah, wish list and save for later features. I don't use any of that. Do you use any of that?

[Kyle Reed]

Yeah, a little bit.

[Unnamed Speaker]

I just don't want to forget product search functionality. I would say number one.

[Kyle Reed]

Yeah.

[Unnamed Speaker]

I mean I'm amazed at like my buddy has his belt buckle and you know, and it's got like Some funny thing on it. I'm just making stuff up.

[Kyle Reed]

Three words.

[Unnamed Speaker]

But I'm like typing you spongebob belt buckle. By the way, my weirdest searches are all around Halloween. I'm like, I need your antler.

[Kyle Reed]

Amazon's perfect because it's probably the day before or that morning. Can I have it today?

[Unnamed Speaker]

That's right. Product search, functionality. Those are all things that we can learn from. I say a lot of time to my consulting customers just like, why are you making it hard for people to give you money?

[Kyle Reed]

Yeah, that's such.

[Unnamed Speaker]

Now you went a direction of leadership principles.

[Kyle Reed]

Yes.

[Unnamed Speaker]

And storybrand AI gave me some info on this. Data driven decision making. This is critical.

[Kyle Reed]

They're probably ruthless about it too.

[Unnamed Speaker]

They're probably ruthless about it. In fact, I'm about to invest in Angel Studios. Angel Studios has nothing to do with Amazon, but Angel Studios, they make the Chosen. They've made some really good movies. And what I love about their movies is they're making sort of Christian movies that don't feel like church propaganda. Most Christian movies are not Christian movies. They're church movies. And there's some similarities between church and Christianity, but not many. Let's just be honest. They're movies designed to build the church and to get butts and seats. That's not what Angel Studios is doing. They're actually, they're Mormon brothers out of Utah who are. And so I went and spent a day with them, Harmon Brothers. And I get in there and I'm thinking like, these people are making some really creative, really great media. Fantastic. They actually have a line of comedians that they're supporting and comedy specials.

[Kyle Reed]

Really?

[Unnamed Speaker]

Yeah.

[Kyle Reed]

Interesting.

[Unnamed Speaker]

And I've been to, you know, that new movie, there's a bunch of movies. I watched one of their documentaries in the theater about near death experiences. One of the best documentaries I've ever seen and one of the most faith uplifting documentaries I've ever seen that if it was a church Christian thing, they wouldn't have put half of this stuff in there because you know, people are going to hell and coming back and some people, people who aren't Christians or meeting Jesus in the afterlife, you know, there's no possible way a church document is going to do this. But Angel's like. And I'm like, well, how are they making decisions? So I go and spend a day with them and I'm expecting to see a bunch of creative, meet a bunch of creative people. It's not that they're not creative, they are creative, but they are ruthless about data they are making decisions based on data. This is what the people want. The people have told us what they want. It meets our requirements in terms of it doesn't have profanity or whatever, it's family friendly. And so we're going to do it. I personally like this one more and it doesn't matter. I personally think this one would be better for culture, but the people don't want it. The data says do this. And one of the reasons that Betsy and I are investing in Angel Studios is that is the reason you aren't going with your gut. You aren't using intuition. You don't have an agenda here. You've got some core values. And if the media meets their core values and the people want it, we are going to produce it. And that to me is a surefire way of succeeding. You're listening to your customers. And so if the data says it works, it works. And do not confuse this with your opinions.

[Kyle Reed]

And that is apparent even to the story I said about cutting products that they've made. They are ruthless about the things that do and don't work.

[Unnamed Speaker]

Yeah.

[Kyle Reed]

And they're totally willing to say, yep, that was. That didn't work. Move on to the next.

[Unnamed Speaker]

Think about how fast they have become what they have become. To me, that's the real 20 years, baffling miracle. In 20 years, you're driving down the freeway. If you go from here to Atlanta, which is a four and a half hour drive, you're gonna pass. The five biggest buildings that you'll pass will be Amazon.com, warehouses or something like that. They're putting 5,000 people here in Nashville. There's, you know, however many people they took over downtown Seattle, just the building of the buildings should have taken more than 20 years, much less build the business that built the buildings. And one of the reasons they do that or one of the ways they do that is what Jeff Bezos calls two pizza teams. Did you hear about this?

[Kyle Reed]

No. Oh, yeah, I think I have, but yeah, let me see.

[Unnamed Speaker]

So he introduced the concept of two pizza teams. Small agile groups that can innovate and execute quickly, minimizing bureaucracy and fostering accountability. Minimizing bureaucracy.

[Kyle Reed]

And the reason he calls it that is because they can write, they can share. It's a small enough team that two pizzas.

[Unnamed Speaker]

Two pizzas will feed them at a meeting. That reminds me of how W.L. gore and associates, remember in the Tipping Point, they Talk about how WL Gordon Associates only has 150 parking spaces per building. And then if somebody Parks on the grass, they build a new building. That was kind of how the anecdote worked. There's something about small agile teams. It's interesting because as we build our company, the number one thing that was frustrating to me as we grew from like seven employees to 37 employees, was speed. Speed, just it slow, everything. We were able to do bigger things, but so much slower. And the fact that you could have tens of thousands of employees, probably hundreds of thousands. If we're talking about Amazon, the fact that you could have that many employees and still move fast is amazing.

[Kyle Reed]

It is impressive. Yeah. It's fascinating too, to like the pizza box theory or the 150 parking space. That's what fascinates me more, is like, how do you come up with that? How do you come up with that theory? How do you come up with that mindset?

[Unnamed Speaker]

Well, you know, Steve Jobs said the same thing. He said we operate like a very large startup and then we move very, very quickly. We try things very quickly. I feel like we do that here. We try a lot of things.

[Kyle Reed]

Yeah, we break a lot of things. I mean, we try, we break, we test, we redo it. Yeah. There's.

[Unnamed Speaker]

You have to have the ability to forget.

[Kyle Reed]

Yeah.

[Unnamed Speaker]

People say, remember you did this.

[Kyle Reed]

That's hard.

[Unnamed Speaker]

I have zero remember.

[Kyle Reed]

That's hard. It's the kill your darling kind of mindset. It's hard though, because it's hard because you've worked on things and it's especially when you put yourself into it and then you go, I don't know if this is working or not, and have to step back. And it is fascinating that Amazon is ruthless about that. They are based off data, based off customer consumption.

[Unnamed Speaker]

The number one thing that, and I know you talked about this before we started recording customer obsession and this is, to me, this is the big one where I feel like, you know, at 50, however old I am, 53 or 54, I don't know, I think I'm about turn 53.

[Kyle Reed]

You're 18.

[Unnamed Speaker]

I look like a 53 year old. Regardless. So let's go with that almond oil, by the way.

[Kyle Reed]

Yeah.

[Unnamed Speaker]

And I don't know which one. Just get it with your organic coffee that I don't know which one either. Order it on Amazon. But the customer obsession and I almost feel like we had to hit a certain point in revenue where it actually no longer mattered to me how much money we were making. It matters to me now whether our customers are satisfied with what we're doing and whether or not we're solving Their problems quickly because when we first started the company, listen, we were about to run out of cash. So it's like having a toothache and trying to care about somebody and be a good listener. Like we're about to run out of cash. So I can't really think about my customer right now. I got to get this product out and got to put a sales sign on it. Got to get it out. And now that we're successful, it's like, oh, well, we have plenty of time. You know, we have six months before we run out of cash. What do you think the customer is frustrated with and how can we actually. And I almost feel like that's the beginning of explosive growth.

[Kyle Reed]

I found a clip that I thought he articulated it really well and I hadn't. Yeah, I hadn't heard it shared this way. But yeah, I wanted to play it for our audience and for you because I thought he did a really good job of laying out their principles. Let me play it.

[Jeff Bezos]

The things that most people know about, which is our consumer offering, where we deliver things in little brown boxes and these things seem so disparate. How is it that we're doing all of them? And the common thread, and really what it is is it's an approach we have, a very distinctive approach, approach that we have been honing and refining and thinking about for 22 years. And it's really just a few principles that we use as we go about these activities. At the very top of the list is one I've already mentioned, but you'll probably hear it 10 times throughout tonight because it's so central and it is customer obsession. It's customer obsession instead of, for example, competitor obsession or business model obsession or product obsession or technology obsession. There are many ways to center a business and by the way, many of them can work. I know and have friends who lead very competitor obsessed companies and those companies can be successful. You know, that's not a bad strategy. You have to be really good at close following. You identify winners when you watch. You watch your competitors very carefully. If they latch onto something that's working, you duplicate it as quickly as possible. It's a very good strategy in some ways because you don't have to go down blind alleys if you're not pioneering. If you're only close following. It has some advantages, but it has some disadvantages too. And I like the customer obsession model. I think it's the right one. I think it's better than product obsession even. I think product obsession is not bad, but I think customer Obsession gets you there in a healthier way. So that's one of the principles, one of the approaches that we take in every single thing that we do.

[Unnamed Speaker]

To me, Kyle, that clip gave me permission to just sort of become customer obsessed. Customer obsessed. And this is the first time with storybrand AI, it's the first time we've released something that we're leaving a team behind. By behind, I mean they're just going to sit and make this better and better for the next two years. They're just never going to stop. Every little problem with it is going to be perfected. Perfected. Perfected. Any sort of criticism we even have where you vote on new assets.

[Kyle Reed]

Yeah.

[Unnamed Speaker]

And the customers are now able to vote on that. We're going to release one asset a month. So they're able to vote on which new asset you want our team to actually create.

[Kyle Reed]

Yeah. And what's interesting is even in some of the internal conversations that I get to be a part of is that you can hear the team as they start to dialogue. So one of the ideas we came up with the other day was what if we get on the phone with people who are either using our product or have stopped using our products and ask them. So that's customer obsession. But that idea doesn't come if we're not obsessed with the customer and their experience with it.

[Unnamed Speaker]

Or if you don't believe that's the key to growth. That's the key to growth.

[Kyle Reed]

We could get into competition obsession and try to make the greatest AI platform anyone's ever done. And we probably couldn't because we don't have the resources we don't have. But we can serve a customer base.

[Unnamed Speaker]

Yeah. We can serve our target market better than they can.

[Kyle Reed]

Yes.

[Unnamed Speaker]

All right. I just want to summarize five kind of critical elements of success when we're asking the question, why did that work? As it relates to Amazon.com, and this is all stuff that at least our business owners can use. Customer obsession. I would actually put number one, number one, but I would include sort of the ease of ordering and shipping and all that inside of customer obsession. You mentioned long term thinking. Bezos emphasizes the importance of thinking long term. Making investments that may not pay off.

[Kyle Reed]

Immediately, but they also inside of that, move fast, which might segue to another one. It's long term thinking, but with speed in mind.

[Unnamed Speaker]

Yep. Innovation and experimentation. Bezos advocates for a culture of innovation where experimentation is encouraged and failure is seen as a stepping stone. That's huge. All this, by the way, you have to have cash reserves. Yeah, you have to have cash reserves to do this. Operational excellence, we didn't touch on. He focuses on efficiency and execution, believing that streamlined operations lead to better customer service and profitability. Operational excellence is massive. And then this was interesting, the fifth and final one for me, talent development. Bezos. He's got to have a team of like the most smart you ever watched an interview or a documentary. And then there'll be some, you know, high level executive on Amazon that you've never heard of. And then you listen to them talk and I mean, 30 seconds in you realize this person is on another level. Absolutely on another level. Like, he's found the most talented people in the world and continues to develop the talent that comes in. So, you know, you grateful for Amazon or you wish you could go back to the world where you got to get in your car, man?

[Kyle Reed]

The moral mindset says, what am I.

[Unnamed Speaker]

Willing to say publicly?

[Kyle Reed]

Yeah, no, I am grateful. I mean, just the ease of use. The kids show at night. I want to watch a movie with my kids. Pull up Amazon Prime.

[Unnamed Speaker]

Daniel Tiger.

[Kyle Reed]

Yeah, just everything about it, it does, it hits everything. And the opportunity to find stuff that I never. I mean, just even though you're thinking about, like, what do you, you know, your significant other says, what do you want for Christmas? Like, I don't know, let me go look on Amazon and see what other people want to use or like, what do they like?

[Unnamed Speaker]

And listen, there's a downside. I don't think Kyle and I are saying, this is great, it's the greatest thing ever. There's a downside. Brick and mortar shops, bookstores are gone. But I think there's also an upside in the sense that literally millions of businesses exist, partly some of them because they're selling on Amazon products, exist because they're able to sell on Amazon. They got to skip the whole, like building the distribution channel because they literally just signed up and they were able to do it. But I would also say there are so many mom and pop businesses that I order from, I order my protein powder from. They're not paid by me. From Ballerina Farms. Ballerina Farms. The shtick is a ballerina, married a farmer, and now they have this business. Their protein powder comes. It's whey protein from dairy cows. And first of all, I shouldn't even say this because I can't get the chocolate. I'm on the list that they email and they say, we've got some chocolate. And I go on and it's out. I can still get the vanilla. That protein powder tastes like a milkshake. It tastes exactly like a 1940s milkshake. It has colostrum in it. It has, like, cow boob colostrum. I'm like a baby cow.

[Kyle Reed]

Pretty sure I know what that means. Yeah. Okay.

[Unnamed Speaker]

Of Ballerina Farms protein, and I'm here for is the best tasting protein powder on the market. They do not sell on Amazon. They do not have a brick and mortar. And I buy from them because I have been accustomed. I've now gotten used to buying things online.

[Kyle Reed]

I see what you're saying.

[Unnamed Speaker]

And I wouldn't have done it without Amazon because we're all like, oh, yeah, you can buy things online now. It's safe. It just comes to your door. Please edit out any reference of Ballerina Farms and beep it because I want it all to myself. I do not want people to know about this. Actually, if Ballerina Farms is listening, I just promoted you. Could you sit? I will pay for it. Just put me on the VIP chocolate subscription.

[Kyle Reed]

That's fair.

[Unnamed Speaker]

Because right now I'm eating vanilla.

[Kyle Reed]

Yeah, that's a fair ask. Because I thought you were going to say, send it to me for free. You're willing to pay?

[Unnamed Speaker]

I'm willing to. I'll pay full price. I just want access to it. All right. Another episode wrapped up. We now fully understand why Amazon.com exists. Hopefully this is one of those episodes where people could actually learn a little bit. If you're running a business, why do you think Amazon exists? Is there something that. Is there some glaring, obvious thing that you would have brought up if you were with us today? If so, leave a comment. Thanks for listening.

[Donald Miller]

Thanks for listening to the why that Worked podcast presented by StoryBrand AI. If you like the show, follow wherever you get your podcasts. And if you're Enjoying this on YouTube, hit that subscribe button and leave a comment letting us know what you think and what you want the guys to talk about in a future episode. Curious about how StoryBrand AI can help you create clear, effective messaging? Well, you can try it out right now and create a free customized tagline for your business. Just go to storybrand AI. Thanks for listening and we'll see you next time.