Amazon: working backwards and other stories

I’m late to the party on this, but I’ve just come across this very helpful technique for developing products and services, as used at Amazon. Essentially, you start by immediately writing a customer-facing press release for the finished product, and work backwards from there:

Each consists of a one-page “press release” (for an offering that doesn’t even exist and might never be commercialized), a six-page set of FAQs (frequently asked questions that customers can be anticipated to have about the offering, and their straightforward answers), and often a bit more descriptive material, sometimes even a mockup or prototype.

The process we’re calling the heart of Amazon’s renowned innovation prowess is called “working backwards” and it takes its cue from Amazon’s long-established leadership principles. The first of them starts: “Customer obsession. Leaders start with the customer and work backwards …” Following that principle, these documents constitute a visualization mechanism. They force a person with an inventive idea to get very clear on the objective, and to describe it in a way that others can also grasp without ambiguity. The documents don’t just go into email boxes. Their authors present them internally with the kind of energy they would deserve if this were really the day  the offering was launched.

If the discussion wows its audience – a manager or set of managers in a position to allocate resources to develop it further – then the question quickly becomes: how do we accomplish everything it would take to get there? It’s fine if, as the work gets underway, discoveries suggest that the vision should change somewhat; and in that case the “PR/FAQ” gets revised. Wilke stresses that these are “living documents.” But still, “as you begin to iterate on the product, and you revise those docs,” he stresses, “you periodically compare them to the original ones to make sure you haven’t drifted so far from the vision that you’re not happy with what you’re actually building.”

Jeff Dyer and Hal GregersenHow Does Amazon Stay at Day One (Forbes)

Here’s a bit more on the process:

A press release is usually the very last step in the product development and launch process. It tells the world: “Here I am, this is what I can do, and this is why you should care.”

To be effective, the author must step back from the technobabble trap and communicate in terms that resonate with the target customer.

“One important element of the press release is that it is written in so-called ‘Oprah-speak’. Or in other words, a way that is easy to understand,” says Nikki Gilliard of Econsultancy. “This essentially allows Amazon to cut through tech-jargon and any descriptions that would only confuse the customer, in order to deliver a mainstream product.”

The starting point for the product definition is a customer-centric document, unconcerned with implementation details, technology or user interface design. Then, the focus shifts to what encompasses a truly great solution for the customer. If the press release is compelling, then you’re onto something.

“Iterating on a press release is a lot quicker and less expensive than iterating on the product itself,” says Amazon’s Ian McAllister. “If the press release is hard to write, then the product is probably going to suck. Keep working at it until the outline for each paragraph flows.”

Heather McCloskeyWhy the Most Forward-Thinking Product Teams Work Backwards (ProductPlan)

I love this idea. I’ve been thinking a lot about how important (and hard) it is to write good specs recently, and writing the press release and FAQs seems like a powerful way to keep customer focused even at the earliest stages. The idea of iterating on the press-release and FAQs in conversation with customers (‘spec as minimum viable product’) makes it better still.

The rest of the Forbes article is great too – highly recommend.

Clayton Christensen: Jobs to be done (1)

Here’s a great insight from Clayton Christensen: people don’t buy a product or service because of abstract needs, but rather when they have a specific job to do.

So people don’t use public transport, or cars, or taxis because they need transportation in general, but when they need to go and do something specific at a specific time.

All people need to be healthy, but they only consume medical services when they notice that they are sick, or hurt, and have the ‘job to do’ of getting better.

All people have an abstract need for education of one sort or another at all times, but they generally only seek out and pay (in some combination of money, time and effort) for books or teachers or schooling when they have a need or want for a specific thing.

You can watch Christensen’s famous (and funny) example of what people “hire” MacDonald’s milkshakes for in the video below.

Benefits of thinking about customer behaviour in this way include…

  • Better understanding of why people ‘buy’ what you offer – understanding the job to be done is for more helpful for improving your offering than general demographic information or market research into how you might improve your product because it’s more specific, focusing on the critical moments when people actually buy
  • More insight into who else might buy your product – instead of asking “who is similar to my customer?” you ask “Who has a similar job to do?” and “What other jobs does our product do well?”
  • Stability – Christensen points out that ‘jobs’ are far more stable than products and users. Julius Caesar, Queen Victoria, Winston Churchill and Steve Jobs, for example, all needed to get letters securely from A to B – but the services they made use of to get the job done were radically different.

Resources: Steve Blank Playlist

If you’re not familiar with Steve Blank, start here:

The Principles of Lean

“No business plan survives first contact with customers.”

On Acting on Customer Discovery

If you’re going to go out and discover whether customers like your idea or not, this is not an outsourceable problem. The founders need to do this. Particularly, the people capable of changing strategy need to be the ones hearing good news and bad. … Getting feedback from customers is the most valuable thing you will do as entrepreneurs. It is not outsourceable.

Customer Development

The thing is to think as much in terms of developing customers as developing products. Once you’ve got the basic idea, watch all of this (long) video:

Bonus Material

Resources: Clayton Christensen on disruptive innovation

Clayton Christensen’s The Innovators Dilemma is a business classic, providing a framework for understanding how technological or business model innovations (or more usually, both) allow new businesses to gain a foothold in markets or to create new ones.

It’s been hugely influential – and has come in for its share of criticism.

This post contains links to a range of resources for getting up to speed with disruptive innovation, as well as some of Christensen’s other theories – particularly his ‘jobs to be done’ view of markets and product development, and modularity theory.

The Christensen Institute:

Brief introductions to:

… and some decent blog posts illustrating some of these topics in different fields

Talk at Google

This is my favourite overview – Christensen covers most of his key ideas clearly and with humour.

At Startup Grind

On how to build a disruptive business…

And talking with Marc Andreessen about his ideas:

On the a16z Podcast

Highly recommend these episodes:

  1. Beyond Disruption Theory: Marc Andreessen and Ben Horowitz talking about how disruption theory has been important to them, with other insights into entrepreneurship in general:

2. Competing Against Luck: Another conversation with Marc Andreessen about how the Christensen’s understanding of disruption theory has evolved

At Said Business School, Oxford

I’ve just discovered these while writing this post – will add a note later once I’ve watched them.

Lecture 1: Disruptive Innovation:

Lecture 2: Management

Lecture 3: The Process of Research

The innovation in your head…

… isn’t an innovation yet.

Our definition of innovation refers to something rather specific:

A change in the processes by which an organization transforms labor, capital, materials and information into products and services of greater value.

Clayton Christensen, Efosa Ojomo and Karen DillonThe Prosperity Paradox

It’s simply an idea.

It’s an innovation when you’ve done the hard work of making it, trying it in the real world, built the wrapper, and made something the right number of people will pay* to use.

*They might pay in money. They’ll definitely pay in time, attention and effort.

Value: more of more?

  • Make something useful
  • For lots of people
  • Capture some of that value so that you can do it again

The more useful what you do is, for more people*, the greater the potential is for your organisation to be sustainable and successful.**

BUT you probably need to start by building something small first: the minimum viable product for the minimum viable audience.

*An resource or innovation that only exists in your head isn’t useful… yet.
**That is, if you get the wrapper – structure, systems, money flows – in the right alignment.

Zen Hae on cross-pollination, imitation and innovation in Indonesian Peranakan literature

The pattern of hybridity, imitation and innovation we talk about under the label “combinatorial innovation” isn’t limited to cars and computers – it’s central to (and has been discussed for far longer) in literature and the arts. In a paper from the Jakarta International Literary Festival 2019, Zen Hae unpacks the example of Indonesian-language writing by Peranakan* writers as a disruptive force in pre-Independence Indonesia.

Karya-karya mereka digolongkan sebagai “bacaan liar” oleh lembaga penerbitan kolonial Balai Pustaka. Mereka menerima novel atau roman sebagai buah modernitas bukan hanya dari Barat, tapi juga dari Cina Daratan. Dengan penuh semangat mereka menerjemahkan, cerita silat, roman sejarah, juga kitab-kitab keagamaan dan ajaran moral Konfusianisme dari negeri leluhur mereka. Pada tahap berikutnya mereka bukan lagi menerjemahkan, tetapi menyadur, kemudian lagi membikin karya asli, baik tentang kehidupan di Cina Daratan maupun di Nusantara – yang terakhir ini kerap terjadi dalam genre cerita silat. Bersama pengarang-pengarang nasionalis-Kiri di sisi lain, mereka menggunakan Bahasa Melayu Rendah secara politis untuk menandingi dominasi Bahasa Melayu Tinggi yang diinisiasi oleh linguis kolonia…

Zen Hae – Perihal Pagar dan Siasat Para Pengarang dalam Menafsir (Kembali) Batas, Jakarta International Literary Festival 2019

Their works were classified as “wild literature” by the colonial publishing house, Balai Pustaka. They received novels and stories as the fruit of modernity not only from the West, but also from Mainland China. They eagerly translated the silat (martial art) stories, historical romances, and also religious books and the moral teachings of Confucianism from the land of their ancestors. In the next stage they were no longer translators but adaptors, and later creators of original works about life in China or in [what would become] Indonesia – this last seen frequently in the genre of Silat stories. Along with nationalists of the left, they used Low Malay to challenge the domination of the High Malay used by colonial linguists…

Zen Hae – On the Fences and Strategies of Authors in (Re)Defining Borders, Jakarta International Literary Festival 2019

*Broadly speaking, ‘Peranakan’ means people of Chinese descent who have assimilated to varying degrees into the local cultures of the Malay Peninsula or the Indonesian archipelago. More here.

Carl Sagan on starting from scratch

If you wish to make an apple pie from scratch, you must first invent the universe.

Carl Sagan

Starting from scratch is overrated (and impossible). Some better questions are:

– Has someone else already made what I’m trying to make? Or something similar? Or part of it? (Readymade is usually easier than DIY).

– What new things can I make with the components I already have?

– Which building blocks have I overlooked or neglected?

– Where can I look for new building blocks?

– Who else would find what I’ve built useful? Can I share it – or share instructions for how to make it? (Saving someone from having to make something themselves is the foundation of most business models, and instructions are another type of building block.)

– Which pieces of what I do is it really essential that I break down and re-make myself?

Marks and Spencer as disruptive innovators

Marks and Spencer have been a mainstay of British retail for more than 100 years, so it’s hard to imagine them as disruptive innovators – but it turns out they were innovative all over.

More immigration and innovation

Michael Marks (born in 1859 Slonim, then part of the Russian Empire) moved to the U.K. in 1882, and within a few years had a market stall in Leeds. He was successful, in part because of a pricing innovation: he called his shops Penny Bazaars (“Don’t ask the price – it’s a penny!”) and allowed customers to browse with no pressure to buy.

Eventually Marks began a partnership with Thomas Spencer, who brought additional capital and good connections with manufacturers, enabling them to source goods directly from their suppliers.

Peter Drucker picks up the story:

World War I had profoundly shaken their country’s class structure… [creating] masses of new buyers for good-quality, stylish, and inexpensive merchandise such as lingerie, blouses and stockings – Marks and Spencer’s first successful product categories.

Marks and Spencer then systematically set to work developing brand-new and unheard-of core competencies. Until then, the core competency of the merchant was the ability ot buy well. Marks and Spencer decuded that it was the merchant, rather than the manufacturer, who knew the customer. Therefore the merchant, not the manufacturer, should design the products, develop them, and find producers to make the goods to his design, specifications and costs. This new definition of the merchant took five to eight years to develop and make acceptable to traditional suppliers, who had always seen themselves as “manufacturers,’ not “subcontractors.”

Peter Drucker – The Daily Drucker

A different retail experience

S4RB continues:

[After the First World War] M&S continued to grow and innovate. The company displayed its products on trays in the store allowing customers to browse. This was different to most other retailers who kept the products on shelves behind the counter… In the early 1920 M&S started selling what is now their most famous product: underwear. Today one in three women wear an M&S bra.

The history of M&S: This is not just a store, it’s an M&S store since 1884 – Blog at S4RB.com

Other innovations

There’s much more to write about: no-limit cash-refunds with receipt; a staff welfare department; clothes and cafes designed to meet the requirements (or exploit a loophole in) of post-war rationing; a survey of women’s legs to improve underwear design; the invention of ‘cold-chain’ supply so that meat could be sold fresh instead of frozen; the introduction of ‘sell by’ dates to products; some of the earliest sales of Indian and Chinese ready meals – and the Chicken Kiev; increasing emphasis on sustainability and responsible sourcing for clothing.

Slowing down

Innovation seems to be have slowed down a bit at M&S in the 2000s, but with any luck they’ll return to the habit and continue to flourish into the future. After all – it’s where I buy my pants.

Read more at Marks in Time: A History of Marks and Spencer and S4RB.com

Resource: Seth Godin on Systems Thinking

Akimbo Season 4 Episode 20 (July 10, 2019) – Systems Thinking

This is a great episode of riffs on how systems create – and constrain – possibilities, and the opportunities that open up when systems change. Featuring Mr Heinz and the fictional (!) Betty Crocker.

Akimbo Season 4 Episode 18 (June 26, 2019) – Find the others: Apollo 11 and the making of culture

This episode isn’t flagged as an episode about systems or systems thinking, but that’s really what this telling of the story of going to the moon is all about. We watch the Space Race grow out of the wreckage of the Second World War and unfold across a network of more-and-less-and-un- expected connections within the complex adaptive systems of science, science fiction, culture and politics. I loved it.

Highly Recommend.