David Senra

May 17, 2021

Working Backwards: Insights, Stories, and Secrets from Inside Amazon

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My highlights from the book:

1. To that Amazon is an unconventional company is an undersay statement. Its most significant initiatives have often been criticized and even derided as folly.

2. This book is primarily about showing you some of the unique principles and processes at Amazon with enough detail that you will be able to implement them if you choose to.

3. Amazon believes that long-term growth is best produced by putting the customer first. If you held this conviction, what kind of company would you build?

4. Jeff described Amazon this way: "Our culture is four things: customer obsession instead of competitor obsession; willingness to think long term, with a longer investment horizon than most of our peers; eagerness to invent, which of course goes hand in hand with  failure; and then, finally, taking professional pride in operational excellence."

5. 95 percent of the time I spent with Jeff was focused on internal work issues rather than external events like conferences, public speeches, and sports matches.

6. When I write about what led to Jeff making key decisions in this book, I can do so because I often directly asked him for his specific thinking behind his insights, as the reasoning behind them was often more illuminating than the insights themselves.

7. We don't claim that being Amazonian is the only way to build a high-performing organization. As Jeff has written, "The world, thankfully, is full of many high-performing, highly distinctive corporate cultures. We never claim that our approach is the right one-just that it's ours. Now it can also be yours.

8. In the very early days of the company there were no formal leadership principles because Jeff was the leadership principles. He wrote the job descriptions, interviewed candidates, packed and shipped boxes, and read every email that went out to customers.

9. The first Amazon "distribution center," a room measuring perhaps 400 square feet that had last served as the practice space for a local band whose name was still spray-painted on the door.

10. Jeff had one simple rule: "It has to be perfect." He'd remind his team that one bad customer experience would undo the goodwill of hundreds of perfect ones.

11. The words "relentlessly" and "unreasonably high" are distinctly Jeff.

12. Leaders start with the customer and work backwards.

13. As we do new things, we accept that we may be misunderstood for long periods of time.

14. Leaders have relentlessly high standards-many people may think these standards are unreasonably high.

15. Thinking small is a self-fulfilling prophecy.

16. Speed matters in business.

17. Constraints breed resourcefulness, self-sufficiency, and invention. There are no extra points for growing headcount, budget size, or fixed expense.

18. They benchmark themselves and their teams against the best.

19. They do not compromise for the sake of social cohesion.

20. Amazon realized early on that if you don't change the underlying condition that created a problem, you should expect the problem to recur.

21. No matter how clear your leadership principles and yearly plan may be, they speak softly in comparison to financial incentives.

22. The answer lies in an Amazon innovation called "singlethreaded leadership," in which a single person, unencumbered by competing responsibilities, owns a single major initiative and heads up a separable, largely autonomous team to deliver its goals.

23. Jeff said many times that if we wanted Amazon to be a place where builders can build, we needed to eliminate communication, not encourage it. When you view effective communication across groups as a "defect," the solutions to your problems start to look quite different from traditional ones.

24. Time and time again, we learned that  consumers would behave in ways we hadn't imagined especially for brand-new features or products.

25. Jeff proposed that instead of finding new and better ways to manage our dependencies, we figure out how to remove them.

26. In the 2016 shareholder letter, Jeff suggested that “most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you're probably being slow. Plus, either way, you need to be good at quickly recognizing and correcting bad decisions. If you're good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure."

27. Another phrase you'll hear at Amazon: be stubborn on the vision but flexible on the details.

28. Amazon relies far more on the written word to develop and communicate ideas than most companies, and this difference makes for a huge competitive advantage

29. Tufte offered wise advice on how to get started. "Making this transition in large organizations requires a straightforward executive order: From now on your presentation software is Microsoft Word, not PowerPoint, Get used to it."That is essentially what we did.

30. Jeff offered a short explanation of the reason behind the change: The reason writing a good 4 page memo is harder than "writing" a 20 page PowerPoint is because the narrative structure of a good memo forces better thought and better understanding of what's more important than what, and how things are related. PowerPoint-style presentations somehow give permission to gloss over ideas, flatten out any sense of relative importance, and ignore the interconnectedness of ideas.

31. Jeff has an uncanny ability to read a narrative and consistently arrive at insights that no one else did, even though we were all reading the same narrative. After one meeting, I asked him how he was able to do that. He responded with a simple and useful tip that I have not forgotten: he assumes each sentence he reads is wrong until he can prove otherwise. He's challenging the content of the sentence, not the motive of the writer.

32. Working Backwards is so central to the company's success that we used it as the title for our book. Working Backwards is a systematic way to vet ideas and create new products. Its key tenet is to start by defining the customer experience, then iteratively work backwards from that point until the team achieves clarity of thought around what to build.

33. Working as Jeff's shadow was a bit like drinking from a fire hose.

34. To Jeff, a half-baked mock-up was evidence of half-baked thinking. And he was quick to say so, often using strong language to make his point inescapably clear.

35. We were working forward, trying to invent a product that would be good for Amazon, the company, not the customer. When we wrote a Kindle press release and started working backwards, everything changed. We focused instead on what would be great for customers. An excellent screen for a great reading experience. An ordering process that would make buying and downloading books easy. A huge selection of titles. Low prices. We would never have had the breakthroughs necessary to achieve that customer experience were it not for the press release process, which forced the team to invent multiple solutions to customer problems.

36. "Long-term thinking levers our existing abilities and lets us do new things we couldn't otherwise contemplate," Jeff wrote. "Long-term orientation interacts well with customer obsession. If we can identify a customer need and if we can further develop conviction that that need is meaningful and durable, our approach permits us to work patiently for multiple years to deliver a solution."

37. Many companies will give up on an initiative if it does not produce the kind of returns they are looking for within a handful of years. Amazon will stick with it.

38. The other key is frugality. You can't afford to pursue inventions for very long if you spend your money on things that don't lead to a better customer experience.

39. Steve Jobs segued into the real purpose of the meeting and announced that Apple had just finished building their first Windows application. He calmly and confidently told us that even though it was Apple's first attempt to build for Windows, he thought it was the best Windows application anyone had ever built.

40. Jobs said that CDs would go the way of other outdated music formats like the cassette tape, and their importance and portion of overall music sales would drop quickly. His next comment could reasonably be construed as either a matter-of-fact statement, an attempt to elicit an angry retort, or an attempt to goad Jeff into making a bad business decision by acting impulsively. He said, “Amazon has a decent chance of being the last place to buy CDs. The business will be high-margin but small. You'll be able to charge a premium for CDs, since they'll be hard to find." Jeff did not take the bait. But we all knew that being the exclusive seller of antique CDs did not sound like an appealing business model.

41. Jeff was a student of history and regularly reminded us that if a company didn't or couldn't change and adapt to meet shifting consumer needs, it was doomed. "You don't want to become Kodak, he would say, referring to the once-mighty photography giant that had missed the turn from film to digital. We weren't going to sit back and wait for this to happen to Amazon.

42. In digital, that meant focusing on applications and devices consumers used to read, watch, or listen to content, as Apple had already done with iTunes and the iPod. We all took note of what Apple had achieved in digital music in a short period of time and sought to apply those learnings to our long-term product vision.

43. There was a heated discussion about the surprising ramp-up in expenses across many areas, particularly with Kindle. Someone asked Jeff point blank: "How much more money are you willing to invest in Kindle?" Jeff calmly turned to our CFO, 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.

44. We want Prime to be such a good value, you'd be irresponsible to not be a member.

45. To make his point, Jeff described a scene in which Hughes, played by Leonardo DiCaprio, visits one of his aircraft manufacturing facilities to check on the progress of his latest project-the Hughes H-1 Racer, a sleek single-passenger plane designed to set new speed records. Hughes examines the plane closely, running his fingers along the surface of the fuselage. Hughes is not satisfied.

"Not enough," he says. "Not enough. These rivets have to be completely flush. I want no air resistance on the fuselage. She's got to be cleaner. Cleaner! You understand?"

Jeff had told Steve that it was his job to be like Howard Hughes. From then on, Steve had to run his fingers over each new Amazon product, checking for anything that might reduce the quality, insisting that his team maintain the highest standards.

46. Based on my experience of going through the Working Backwards process with Jeff for well over a dozen different product teams. I can say confidently that the extra time we spent slowing down to uncover the necessary truths was ultimately a faster path to a large and successful business.

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About David Senra

Learn from history's greatest founders. Every week I read a biography of an entrepreneur and tell you what I learned on Founders podcast