Former Amazon VP Bill Carr: ‘Working backwards is the way to create breakthrough innovation’
As part of our Breakthrough Builders podcast series, our Head of Brand Strategy, Jesse Purewal, chats with Bill Carr, former VP of Digital Media at Amazon, about rubbing elbows with Jeff Bezos, launching products slowly, and Working Backwards
In a remote part of west Texas, under an ancient limestone mountain, one of the largest clocks on earth is under construction. The Clock of the Long Now will measure 200 feet from top to bottom when it is completed. Even more impressive than its height is it’s longevity–the clock is designed to last for the next 10,000 years with minimal maintenance. This multi-million dollar, decades-long project is undertaken with the straightforward–albeit hard to measure–goal of helping people think differently about time. Over the course of those ten millennia, the clock will never repeat the same melody in its chime, and it will tick only once per annum. 10,000 ticks to the end.
There is perhaps no more perfect representation of Jeff Bezos’ unique, world-changing way of thinking than this clock, funded by his foundation and under construction on his land.
As Bezos states in his oft-quoted 1997 letter to shareholders under the subheading “It’s All About the Long Term”:
“Because of our emphasis on the long term, we may make decisions and weigh tradeoffs differently than some companies.”
The fourth and fifth bullets in the ensuing list might be read as a succinct summary of Bezos’ approach to business:
“We will make bold rather than timid investment decisions where we see a sufficient probability of gaining market leadership advantages. Some of these investments will pay off, others will not, and we will have learned another valuable lesson in either case. When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we’ll take the cash flows.”
In a recent episode of Qualtrics Breakthrough Builders podcast, Bill Carr, former Amazon VP of Digital Media, gives us an insight into the behind the scenes systems, processes, and culture at Amazon–things that he covers extensively in his recently released book “Working Backwards: Insights, Stories, and Secrets from Inside Amazon”–that brought these statements to life.
Behind the breakthroughs
The last 23+ years have proven just how serious Jeff Bezos was about looking at time differently. Bill talks about how this impacted him personally:
“I would argue that the success of my organization (Amazon Digital Services) was born out of one of the most abject failures of my career, which was the initial launch of the Amazon video service. It was branded Amazon Unbox. I made all kinds of mistakes. I rushed the product out the door to try to meet press and competitive pressures from Apple. We had not thought through the details of the product well enough, we didn't do a good enough job of testing the product.
"So after it launched and it was not doing very well, I certainly had a very unpleasant meeting with Jeff where he had a lot of unpleasant things to say to me about this product, but he didn't fire me. I continued to lead that business as well as the music business and would do so for many years thereafter. And he didn't say this to me in this meeting, but he would say this to many people who made a mistake, ‘I'm not going to fire you now, I just made a two million dollar investment in you. Your job now is to learn from that investment and to make it pay off later’. I learned that If I wasn't taking any risks, then I wasn't doing my job.”
This relatively radical approach to failures, one which not only acknowledges their inevitability, but regards them as necessary steps on the path to success, only works when leadership is focused on the long-term. It is only possible with a focus on the next several decades rather than the next quarterly earnings call. As Bill sums up:
“So many companies think about the business, ‘I want to launch this business and get it off the ground’. But they don't think about, ‘well, I want this business to be successful for the next five decades. So what's really going to be necessary? How do I get there?’”
Another anecdote, shared by Bill in Working Backwards, shows how this directed the way Jeff thought about investments in more concrete ways.
“We’d known the Kindle would take time and money to develop, but by the middle of 2005, it became clear that it was taking much longer and consuming more funds than we had anticipated. Sometime in 2005 [a team of Jeff’s executive leaders met]. There was a heated discussion about the surprising ramp-up in expenses across many areas, particularly with Kindle. At some point in the debate, someone asked Jeff point blank: ‘How much more money are you willing to invest in Kindle?’ Jeff calmly turned to our CFO, Tom Szkutak, smiled, shrugged his shoulders, and asked the rhetorical question, ‘How much money do we have?’ That was his way of signaling the strategic importance of Kindle and assuring the team that he was not putting the company at risk with the size of the investment. In Jeff’s view, it was way too early to give up on the project. Development continued”.
It should not surprise any readers to learn that Amazon currently owns 70%+ of the ebook market.
Time as competitive advantage
As further example of the patience required to be, as Bill says, ‘Amazonian’, Bill shares this story of a product launch:
“Andy Jassy formed the Amazon Web Services team in 2003. What is notable is that the first Amazon Web Services product did not actually launch and rollout until three years later, in 2006. Today, with the way people think about lean and agile, couldn't they stand up a software team and start launching things within a matter of months? And yes, the answer is they could have done that. But instead, what they did is they went through a very methodical process of thinking about the needs of the target customer. [...] they started using something called the ‘Working Backwards PR/FAQ process’. In this process you start by considering what the customer needs and then figure out what skills you may need to develop. Then you consider the capabilities and technologies you need to actually serve the customers.’
“This process took months, more than a year in some cases, to really sort out what they wanted to build. Through the process of figuring that out, Jeff and the leadership team at Amazon developed the specific ‘PR/FAQ’ process to formalize how a team slows themself down and thinks through all the product details in advance from before they start writing code.”
More than a year seems like an eternity in the current tech world, where agile and speed to market reign supreme. But consider this; a year is only long enough for the clock to tick once. Think differently about time and you, too, could be on the path to radical reinvention!
Listen to Bill chat with our Head of Brand Strategy, Jesse Purewal in a recent episode of our Breakthrough Builders podcast.
Breakthrough Builders is about people whose passions, perspectives, instincts, and ideas fuel some of the world’s most amazing products, brands, and experiences. It’s a tribute to those who have the audacity to imagine – and the persistence to build – breakthroughs.
Listen to our full conversation with Bill