Most start-ups are founded by dewy-eyed dreamers who want to be the next big thing in the business world. We’ve all read success stories about how Mark Zuckerberg, Bill Gates or Rupert Murdoch made it, and you’d have to be in a coma not to be inspired. If you’re in e-commerce or are wanting to break out into businesses that rely largely on an online platform, you may be looking to Amazon’s success as a template and trying to model your start-up along its prosperity. Just how did Amazon get from a business being run by someone who used a basement as a launching pad to a corporation with a net worth of $40 billion? In this post, we’ll take you through 5 lessons you can learn from one of the few companies that was able to survive the dot com crash and thrive in ways we never thought possible.
Founded by Jeff Bezos in the early nineties, Amazon came out of the need for Jeff to provide a central e-commerce repository for people looking to shop for items such as books, CDs and movies. Jeff quit his lucrative Wall Street job after realizing the importance of living life without regrets and decided to take a huge risk by starting an online company that sold books online. He saw this as an opportunity that would take a while to get started and pan out; in fact, he acknowledged the fact the company was unlikely to make a profit within its first five years of operation, something that had some investors doubting his vision.
1. Be Stubborn Yet Flexible
Right from the inception of the company, Jeff had a stubbornness and flexibility that seemed like an oxymoron but totally worked when it came to getting a start-up off the ground; he was stubborn in that he never gave up on his goals and dreams for the company. Bezos was quoted saying that “if you’re not stubborn, you give up on experiments too soon. And if you’re not flexible, you’ll pound your head against the wall and you won’t see a solution to the problem you’re trying to solve”. Being stubborn gives you that leadership spunk you need to keep going even when things look like they’re not going to work out. When you’re met with an obstacle along the way, you can try out different strategies to overcome it.
2. Develop Circular Vision
Getting a start-up up and running is the easy part; the demands brought on by rapid change, especially for online-based companies, can seem overwhelming: expansion into foreign markets, investor inclusion and complicated taxation processes can put a damper on everything a few months or years down the line. Amazon foresaw this thanks to its founder’s circular thinking. Simply put, this means that start-up management needs to be able to see opportunities which others can’t, as well as having a plan that manages change once it comes up. Bezos foresaw the Internet’s massive growth, which was pegged at about 2,300 percent at the time of the e-commerce giant’s inception in the early nineties. Because of this, he realized that he would have to add other components to the company to cater for these coming changes. By 1998, Amazon had grown from being the world’s biggest online bookstore to become the world’s largest “anything” store, featuring goods that ranged in diversity from home improvement to toys to software.
3. Eternal Experimentation is Key
Most companies develop a model they use over the years to produce consistent results and a profit margin that keeps everyone happy. However, the winds of change come and sweep everything away, leaving a shell of a company behind its wake. What did they do wrong? Wasn’t wash, rinse, repeat a good enough model? The truth is, in today’s rapidly changing market, you can’t afford to stagnate. Technological changes coupled with back-breaking competition can see you kicked out of the game faster than you can say IPO. The remedy for this kind of change lies in experimentation. Amazon is always looking to challenge its existing infrastructure to ensure that it’s relevant to its target market. Some of the daring experiments it took on included taking its advertising campaigns to two cities in the US to get a gist of what its customers wanted. This giant corporation pumped in millions of ad revenue and into campaigns targeting Minneapolis and Portland. This experiment ran for a full sixteen months, and sought to refine the company’s sales strategy. While it wasn’t a complete success, Amazon took away some gems of experience from the whole venture and determined that experimentation is key to advancement and strategy refinement.
4. Make Your Customers Matter
More than anything, business success is dictated by customer loyalty. One of the ways Amazon sought to buy into this concept was to offer free shipping for items above $25. While this might seem counter-intuitive for a company with a tight budget and the pressure to turn a profit, giving this kind of offer actually wins you loyal customers in the long run. What Amazon learned from this was that while it wasn’t bringing in the money in the short term, it opened them up to a larger frequency of orders from loyal customers in the long run, which in turn eventually boosted profits and overall growth. Other ways in which Amazon showed its concern for putting their customer first came via allowing competitors to advertize on their site as well as helping them avoid duplicate ordering. At the end of the day, when a start-up focuses on what’s important for a customer, they’ll always win since there’s nothing which matches the feeling that your favorite e-commerce shop really gets you and caters for your needs in an almost intuitive way.
5. Learn From Your Competitors, and Put a Twist on It
While Amazon has always been keen on innovation, it wasn’t going to let itself make the same mistakes its competitors made. One way Amazon did this was by studying other companies' models and copying them, but with an added twist. There’s something to be said about imitating and then innovating; this strategy gives your start-up a strong foundation you can use as a launch pad to bigger and better things. Amazon also took USPS’s postal service model and came up with its own delivery method for customer packages. It put self-service lockers near convenience stores so that people who aren’t home a lot could use them to store their packages for convenience and safety.
At the end of the day, being able to think into the future by coming up with different variables to harness opportunities, as well as innovation and putting your customers first, may help your start-up differentiate itself from the many me-too start-ups cropping up with each passing day. We hope that this post will help you get on the right path to success by gleaning from the success of the world’s largest retail e-commerce business the Internet has ever seen.