2005 Entrepreneurship Conference - Taking on the Challenge: Jeffrey Bezos, Amazon | Summary and Q&A

Transcript

Read and summarize the transcript of this video on Glasp Reader (beta).

Summary

In this video, Jeff Bezos, the founder of Amazon, talks about how they think about innovation at Amazon.com and gives examples of innovative inventions throughout history. He emphasizes the importance of persistence, the ability to see problems and solutions from different angles, and the need to have a customer-centric focus.

Questions & Answers

Q: How did the Wiffle Ball and liquid paper come into existence?

The Wiffle Ball was invented by David Nelson Mulaney in 1953 out of frustration when his son broke a window with a regular baseball. He used a Cody perfume package to create the Wiffle Ball. Liquid paper (later known as Whiteout) was invented by Betty Nesmith Graham in 1956. She was an executive assistant who was annoyed by her inability to erase her mistakes with film cartridges, so she created a solution using white paint.

Q: How does innovation sometimes come from working backwards?

In high-tech industries, innovation can sometimes come from working backwards. This means that instead of seeing a problem and inventing a solution, people see a new technology or a new understanding and work backwards to find the appropriate problem to solve. An example of this is carbon dating, which was not possible until scientists understood radioactive decay.

Q: How did the small team at WD-40 persist to make their product work?

The small team at WD-40 was tasked with developing a coating for Atlas missiles to prevent rusting. They worked persistently for a long time to find the right compound for the job. Eventually, they succeeded in creating the coating and sold it to the missile market. When they realized the market was small, they changed their business plan and renamed the company the WD-40 Company.

Q: What is learned helplessness and why can it hinder invention?

Learned helplessness occurs when people encounter problems for a long time and become so used to them that they no longer notice or think about finding a solution. This can hinder invention because inventors need to see problems and be bothered by them in order to come up with innovative solutions. They need to be able to push through learned helplessness to identify and solve problems.

Q: How did Mary Anderson invent the windshield wiper?

In 1913, Mary Anderson noticed that when it rained, people would pull over to the side of the road and clean their windshields with a rag. She thought there must be a better solution than this, so she invented the windshield wiper. Despite criticism and doubts, the windshield wiper became standard equipment on all cars within ten years of her invention.

Q: How were toilet paper and Amazon.com both examples of inventions that people didn't know they needed?

Toilet paper was invented by Joseph Gayetty in the mid-1800s. Before its invention, people didn't realize they needed it. Once toilet paper was introduced, people quickly realized they couldn't live without it. Similarly, Amazon.com started as an online bookstore in 1995. At the time, people didn't realize they needed the convenience of shopping online, but once they experienced it, they couldn't go back to traditional shopping.

Q: How does Amazon.com approach innovation?

Amazon.com approaches innovation by constantly working to improve its website and services. They invest significant resources in technology and content development, with a focus on minimizing customer contacts through defect elimination and customer self-service. They also prioritize maximizing the rate of experimentation by keeping the cost of experimentation low and empowering small teams to make incremental improvements.

Q: How does Amazon.com use data to drive innovation?

Amazon.com recognizes the power of data and uses it to drive innovation. They can experiment with different features on their website and measure the impact on important metrics like sales. For example, they tested different messages for time-limited offers and analyzed the results to see which ones drove more sales. They also collect and analyze customer feedback to improve their services.

Q: Why does Amazon.com prioritize a customer-centric focus over a competitor-oriented focus?

Amazon.com prioritizes a customer-centric focus because they believe it leads to better innovation and long-term success. Their core belief is that customers want selection, low prices, and convenience, and these desires won't change in the future. By focusing on providing these things, Amazon.com can continuously improve and innovate without being distracted by competitors or external factors.

Q: How does Amazon.com innovate in terms of low prices, selection, and convenience?

To innovate in terms of low prices, Amazon.com looks for inventive ways to reduce costs, whether it's through optimizing pick paths in their fulfillment centers or allowing third-party sellers to compete on their platform. For selection, they continuously add more products and invite third-party sellers to increase the variety of offerings. To improve convenience, they offer features like one-click ordering, self-service options, and Amazon Prime for fast and free shipping.

Takeaways

Innovation is driven by persistence, identifying problems and solutions from different angles, and having a customer-centric focus. It's important to push through learned helplessness and be bothered by ordinary things in order to invent new solutions. Amazon.com prioritizes defect elimination and customer self-service to minimize customer contacts and improve the overall experience. They also maximize the rate of experimentation by keeping the cost of experiments low and empowering small teams to make incremental improvements. Data and customer feedback are crucial in driving innovation, allowing companies to measure the impact of new features and make informed decisions. By focusing on the core needs of customers, companies can maintain a competitive edge and continuously innovate.