Billion Dollar Entrepreneurial Secrets from Amazon
EPISODE 218
"Working Backwards: Insights, Stories, and Secrets from Inside Amazon" is a book that provides insights into Amazon's history, culture, and business practices. It covers topics such as Amazon's customer-centric approach, innovative spirit, leadership and management practices, and provides examples of how Amazon creates new products and services. The book is a valuable resource for entrepreneurs who want to learn from Amazon's successes and apply those lessons to their own businesses.
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RUNSHEET
INTRO
INTRO
Colin Bryar & Bill Carr’s trailer to Working Backwards
Meet the authors (1m08)
PEOPLE IN LEADERSHIP
Jeff Bezos on hiring talented employees, and what risks come with this essential step
Use hiring to raise the bar progressively (55s)
Colin with Roger Dooley discusses one of the big ideas of the book
Single Threaded Leader (4m19)
HOW TO DO IT
Colin gives us one of the practices that Amazon have in place: the 6 pager
Text is better than Powerpoint (3m56)
Bill on the PRFAQ
Working Backwards Process (4m14)
OUTRO
Jeff Bezos discusses the importance of seeing the broader picture of your company
Manage your business inputs, not outputs (49s)
Buy the book on Amazon
Buy the summary on Blinkist
Transcript
MIke Parsons: Hello and welcome to the Moonshots Podcast. It's episode 218. I'm your co-host, Mike Parsons, and as always, I'm joined by Mr. Mark Pearson Freeland. Good morning, mark. Hey, good
Mark Pearson Freeland: morning, Mike. Good morning members and good morning listeners. We have another action packed show in store for us today in store.
Mark Pearson Freeland: Maybe Mike, there's a little bit of a pun in that word. We'll have to figure it out as we go. But it sounds, mark,
MIke Parsons: like you've got everything backwards, perhaps. Yes, I
Mark Pearson Freeland: do have everything backwards, and in fact, before handing back to you, Mike, let's turn the whole structure around and I'll launch straight into Reveal that today we have a second episode in our brand new series on product discovery.
Mark Pearson Freeland: This time with Colin Breyer, as well as Bill Carr, who wrote a book Working Backwards Insights, stories, and Secrets from Inside Amazon. Mike, this is a company that needs little and most likely zero. Introduction to all of us who are listening to the Moonshot Show. But at the same time, I think what we're gonna find out today, Mike, is a lot of, should we say, secrets, A lot of the secret source perhaps that went into the culmination and creation of Amazon back in the day with two insiders, with Colin and Bill.
MIke Parsons: It is we get to go with two gentlemen that worked directly with Jeff Bezos to create some of the really well-known products that we all use pretty much daily. We have a chance to go into one of the greatest product stories ever, and we get to find out how they did it. Mark, I believe this is so exciting because there are entrepreneurial lessons, product lessons, people, lessons.
MIke Parsons: There is so much in store for us because product. Thinking is just the tip of the iceberg here. It is not just the technology, it is not just the website or the mobile apps. We get to go into moonshot mindsets, moonshots behaviors. This is how Jeff Bezos, how Colin Breyer and bka critical people, we're gonna hear from them on how they built one of the greatest product stories, one of the greatest entrepreneurial stories of our time.
MIke Parsons: I would even go as far as saying
Mark Pearson Freeland: in history. I think you're right. And I think what's really fun and what I certainly found quite surprising, Mike, was that they did employ some pretty unusual perhaps surprising techniques and frameworks to their working that have either culminated into, our public psyche, all of us maybe were aware of some of the things that they did in the creation of this beeth of a brand.
Mark Pearson Freeland: But also there's a couple of tips that I had not known about and that I found quite surprising and also very intriguing. So I think what we have in store is not only a, let's call it a trip down memory, Elaine, and understanding some of the secrets behind Amazon, but I think you and I are gonna get a pretty big dose of inspiration from the inside of Amazon.
Mark Pearson Freeland: And as we know, if they can do it for the biggest brand or at least one of the biggest brands in the world, maybe you and I and our listeners can do it with our own businesses as well.
MIke Parsons: Absolutely. Let's find out what the recipe was, what the chefs in the kitchen did to create such a great business.
MIke Parsons: Something that we all use universally on four corners of the world. So let's actually kick it off with the authors. What do you think, mark? Yeah,
Mark Pearson Freeland: let's hear from Colin Brier and Bill Carr, authors of working backwards who are gonna introduce us to the book and introduce us to themselves.
Bill Carr and Colin Bryar: At Amazon, we were doing something that no one else had attempted to do before.
Bill Carr and Colin Bryar: We knew we had to invent a new way to build and operate a company.
Bill Carr and Colin Bryar: Both Bill and I have been asked several times, how does Amazon do it and how does Amazon work? And so we set out to write a book to answer that question in a holistic manner. We were excited about the idea of being able to pass on what we've learned and what Amazon developed to the next generation of business leaders.
Bill Carr and Colin Bryar: We both joined Amazon in the nineties. During its Renaissance era, we're setting out to be earth's most customer-centric company.
Mark Pearson Freeland: Most
Bill Carr and Colin Bryar: companies all encountered the same sort of problems that Amazon encountered. What Amazon did was take unconventional approaches to solving those problems. Working backwards is a playbook for how to build operationally efficient, inventive companies.
Bill Carr and Colin Bryar: I'm author Bill Carr. I'm Arthur Colin Breyer, and we're leading the Working Backwards Book Club.
MIke Parsons: So there you have it. Mark. We are getting into two guys that they know the secret sauce, don't they?
Mark Pearson Freeland: Yeah, they know the secret source and we are gonna really delve into that secret source through the rest of this show.
Mark Pearson Freeland: Mike, Colin and Bill, what a an amazing situation to be in coming off the back of working on some incredibly well known, as you've already said, products and services that we will probably touch upon daily in our lives, but to be in a position where they can then write a book, introduce us to some of those frameworks and tips.
Mark Pearson Freeland: It's already getting me a little bit excited, Mike, to try and delve in deeper and understand how they actually pulled this apart.
MIke Parsons: Yeah. And what we're gonna do is we're gonna break up the entire working backwards, both, which really went inside and explored everything that Amazon did.
MIke Parsons: We're gonna bring it up into two parts. We're going to think about the kind of the people leadership piece, and then we're gonna shift into some of the things that they did, some of their practices and habits. Both of these things are things you can take away, write down, work on. In fact, I would argue what we're gonna do today in this show, everything you hear, everything that we discuss, everything that we learn out loud together, you'll be able to do as soon as this show ends.
MIke Parsons: So let's start that with the kind of people approach that Amazon have. And there's this very particular technique that they have in hiring, which really leads to why they've attracted so much talent and has led to so much of their success. So let's have a listen now to Jeff Bezos talking about hiring.
MIke Parsons: When I
Jeff Bezos: interview somebody, I actually spend about a third of the interview asking questions designed to ascertain whether or not they can hire great people. So it's the meta interview. And that, and different businesses have different criteria, but in this business we've reached an interesting inflection point where I would say 70% of the risk now to amazon.com is execution risk.
Jeff Bezos: So it's inside the company, it's, our ability to stumble. We're, we've basically gotten past the point where 70 to 80% of the risk was external, and where we needed a huge amount of luck to get to where we are now. Now, all we need is a clear, consistent vision and the ability to execute on it very well at high speed.
Jeff Bezos: And that second piece comes from having large numbers of talented employees with lots of executive bandwidth to help guide
Mark Pearson Freeland: them. Mike, this is a great lesson, I think, in scalability, and I think what we're hearing from Jeff in that clip, and by the way I always enjoy hearing Jeff Bezos giving us a little bit of a breakdown about how he did things, because he is so eloquent and I feel like he's very interested in actually finding the most efficient way into operating and the operationalization of businesses.
Mark Pearson Freeland: So it's always quite fun, isn't it? Yeah.
MIke Parsons: He's super crisp on explaining, and I think that's often a really good sign of a leader who can explain how they did it. That really shows a level of mastery. One thing I wanna do is I wanna call out from they have a whole set of principles and we'll have a link to that in the show notes for you.
MIke Parsons: We've got a big diagram of them in front of us here and they talk about, hire and develop the best. So here's what they have written down as their playbook to hiring people. So if you're listening to this, I really want you to think about how you can contribute to your team, to your project, your company, your business, how you can hire and develop the best.
MIke Parsons: This is what they say. Raise the performance bar with every hire and promotion. Recognize exceptional talent and willingly move them throughout the organization. Develop leaders and take seriously your role in coaching others. This is what is written in the Amazon playbook around people. What a fascinating growth.
MIke Parsons: I hear growth mindset. I hear always learning. I a deep sense of mastery of coaching. But here's the other thing, move them around the organization. Let them explore. What you hear, I think in that sort of talent and recruitment playbook is let us hire the best. Let's promote people to incentivize exceptional talent, and let's grow those people that we work with in order to serve the business, in order to grow the business.
MIke Parsons: Here's the playbook. Mark, what do you think? I
Mark Pearson Freeland: think what, what stands out to me with this this lesson this avenue of the culture of Amazon is also the admission that you are not the smartest person in the room. I like the idea that as you read out, Mike, raise the performance bar with every hire i e every time you bring somebody.
Mark Pearson Freeland: Try and get somebody even better than yourself. And I like this concept that everybody within Amazon, within the teams are all working towards that similar goal with the emission that everybody around them is just as I intrigued, curious like you say, they have the growth mindset. So there's not only everybody with a similar structure and approach to the way that they work, but also the desire that everybody around you, you are rubbing shoulders with the creme de la creme, so to speak.
Mark Pearson Freeland: Everybody is getting hired who are the best, and that exceptional talent just almost inspires those around them. I think it's I think it's a good demonstration in the business, making a promise almost to hold themselves up to that higher standard. And it starts right at the very beginning with higher, with human resources.
MIke Parsons: So what scorecard would you give? Your experience talking to friends, traveling the world, working with clients and partners, what's your sense, like, how well does business in general do at, raising the bar progressively this, with this key play from Amazon? How's the rest of the world doing if this is what Amazon is doing?
MIke Parsons: Do you think most companies are doing it this way? What do you think?
Mark Pearson Freeland: I think it's a good question. I think the desire that I can see amongst a lot of my colleagues in different companies and so on, is that a lot of businesses now are investing more time and energy in making sure that the right people are getting on the bus at the right time.
Mark Pearson Freeland: So specifically, I think it's perhaps a lot trickier to get through the interview processes nowadays. I think people are now. Quizzed more on their day-to-day work, their habits and so on, so that you can almost be tested to a certain degree prior to actually joining the business. And I don't mean tested, like homework and all that sort of thing, but from a cultural fit, I think that become is becoming more and more important nowadays.
Mark Pearson Freeland: Do you have a fit with your team? Do you have a fit with your leaders? Do they have a fit with you? I think that awareness of. And awareness. From like a long term perspective, how are they gonna be in six months time? How are they gonna be in two years time rather than more of a short term let's hire somebody as quick as we can because we've got a hole to fill instead.
Mark Pearson Freeland: I think there's a lot more energy now into reviewing, interviewing, making sure that companies do have those right individuals on the bus, because we know, as we found out through the moonshot show previously, just how expensive it can be, both from a commercial cost perspective, but also from a time management perspective.
Mark Pearson Freeland: To end up in a situation where you don't necessarily have the right person on the bus, you don't have the right fit. Yeah. Therefore you have to offload them. You have to rehire, you have to retrain. Maybe you have to even pay the individual who was doing the job first to go on gardening leave or whatever.
Mark Pearson Freeland: R b I think there's a lot more consideration. When a, an individual is going through the interview process, then the error has been and I think that's what I've started to see from those around me. What are you seeing, Mike? What are you responding to
MIke Parsons: at the moment? I think the, you're, I think you're right.
MIke Parsons: People are trying to work out the talent equation. , what does it take to recruit people, as you quite rightly said. I think there is more consideration there. I think it's actually harder to find people right now just because there's been such a shift in the talent, workforce, makeup itself. A lot of people working from home, changing careers, A lot of people partially working, a lot of people stepping out of employment completely.
MIke Parsons: So I think there's a lot going on there. In addition to this, where I go to next is what role can we play as colleagues and peers? If we were taking on this playbook of rising the bar, lifting the bar, improving the overall company and its culture in our respective companies, what would we do to make that happen?
MIke Parsons: And I think the thing, the practice that I try to embody is that even if someone doesn't work for me or report to me, I tried to coach and mentor appropriately, everybody. So here's the crazy thing. If I wanna rise the bar, for example, I was working last night on a call with some folks and they don't work.
MIke Parsons: For me, we're more like in a partnership and I could could have approached something from a per perspective of, you guys are gonna do this stuff when am I getting it all? . But my choice and what I try to do is help them become more understanding of the process and how to do it. Even if they don't work for me.
MIke Parsons: Like I try to rise the bar and lift the bar through treating like I literally have in my mind, imagine I'm their coach, even if I'm not formally their coach. Yes. So I try and ask questions. I try and work with people so that they walk away with, I really understand what we're trying to do, rather than, oh, Mike's jumping up and down and we need to do some stuff.
MIke Parsons: , I try and shift it towards, That way of working because then when they understand not only what we're doing, but how and why we are doing it next time round even better. Yes. So I just try and imagine myself to be in that coaching mindset even though I'm not formally engaged as their coach.
MIke Parsons: Yeah. And the other thing is I find it, I have less frustration, less stress when I take this approach because if I take a non coaching approach like, Hey, you are meant to deliver this some stuff. Where on earth is it and why isn't it? I find that a more stressful mode of engagement than being just coming in like a coach.
MIke Parsons: I might not ever say, Hey, I'm coaching you right now, but my approach, the way I go about it, asking questions, getting them to think out loud with me to make sure that they have. Just some time to ask questions and probe. Don't just assume that they get it. Really walking through it, I find that this feels much better for me.
MIke Parsons: It raises the bar and actually I feel that it's less confrontational, less, less aggressive. There's less stress, less disappointment, and in the long term it just works. That's how I try to raise the bar. What about you, Matt? I think the way that
Mark Pearson Freeland: I try and rise it is from a supportive perspective based on experience.
Mark Pearson Freeland: So if I see a, particularly a new hire or a new individual who has joined the team, either locally or in another region, perhaps, and I recognize maybe they're struggling a little bit. Understanding the tools or the systems or the processes that are in place, maybe they are, maybe are lacking a little bit of confidence.
Mark Pearson Freeland: They don't feel like they've settled in well enough or maybe they just have loads of questions and they dunno where to begin. I try to help my team and try and be supportive in assisting them in answering or at least finding and asking the right questions when they need to, rather than feeling a little bit overwhelmed as we all have at certain points in our careers and getting stressed out, maybe a little bit angry, maybe pointing fingers, that's, I think building on what you were just saying, Mike, instead of stomping up and down saying, Hey, where's that deliverable that you owe me?
Mark Pearson Freeland: And instead helping them through the process of maybe understanding why it's an important deliverable and therefore they are motivated to go out and figure it out. I think because.
MIke Parsons: Because imagine if you were that person Exactly. And you were struggling a bit. Exactly. That I think is a really good way to reset how you might be quick to judgment, that you can be like if I was struggling, if someone took the time, I might just have a simple couple of aha moments because Mark explained how it worked and now I get it.
MIke Parsons: Now I'm off to the races. I really understand how it works. I was just missing a, an insight in, into the process. That's the other thing you gotta pay it forward a little bit because there will always be a time when we don't get
Mark Pearson Freeland: it right, mark. Look, and there's times when I don't get it that because you have put it, pla paid it full forward as you just said.
Mark Pearson Freeland: It then benefits later when you have a question yourself and you say, Hey, so and do you remember that time I was trying to help you out? Do you mind giving me a hand this
MIke Parsons: time ? You don't even need to reference it, right? You have the, you don't need to reference. No, you're right. No. And maybe it's even more calmer because you've always taken time to help others.
MIke Parsons: People are just naturally inclined to help you and Mark. There's some people that are helping us every single month, isn't it?
Mark Pearson Freeland: Look, there are people out there who are supporting the Moonshot Show and being part of the membership family for the Moonshot Master series that just keeps on growing. Every time you and I sit down in front of our computer mic and hit the big record button, so please, as tradition dictates welcome, Dan, Bob, John, Terry, Ken Ditmar, Marj, and Connor and Liz, Sid, Mr.
Mark Pearson Freeland: Bonura, Paul Berg, and Kalman, our annual members with David, Joe, crystal, Ivo, Christian, Sam Kelly, and Barbara, Andre and Eric, Chris and Deborah La. Steve Craig, Daniel Andrew and Ravi Yvette and Karen Raul and PJ Niwa, Ola Ingram, and Dirk, Emily, Harry, Karthik and Vanatta. Theara, Marco Sunon, jet Pablo, Roger, Steph, Gaia, Anna, and our brand new member Raw, who has signed up.
Mark Pearson Freeland: Since we last recorded raw, please accept our high fives and very good karma. Thank you for being part of the Moonshots member family.
MIke Parsons: Yeah, super grateful to every single one of you. David and Joe are almost at their annual moonshots membership anniversary, so they might get there on the next show.
MIke Parsons: So big thanks to all of those who've been members for over a year. We really do appreciate your support and we hope that you are rising the bar and your respective projects on your mission to shoot for the moon. But Mark, we still have some more people insights to share. Don.
Mark Pearson Freeland: That's right. We're not done yet.
Mark Pearson Freeland: We've started at that essential moment that sometimes us business owners, we come to a little bit late Mike, with regards to who you're gonna hire. Sometimes you're in a bit of a rush. So we've heard from Jeff breaking that down and understanding that risk really comes with an essential step of getting the right people on the bus.
Mark Pearson Freeland: Let's now hear from working backwards, author Colin Breyer, who's gonna discuss one of the big ideas of the book, single threaded leader.
MIke Parsons: One of the interesting concepts in the book is single-threaded leadership. And that isn't really obvious. I think many companies think of a skilled manager as being able to handle multiple responsibilities.
MIke Parsons: That's what makes 'em a good manager. They can keep a lot of balls in the air not have any of 'em drop. Why is single threaded leadership important and how did Amazon achieve that?
Bill Carr and Colin Bryar: It took a while for Amazon to a achieve it. But why it's I'll get to that in a second, but why it's important is it, if that something is big enough to be worth doing.
Bill Carr and Colin Bryar: You do want someone who wakes up every day when it's their sole job to figure out how do, how can I create this product or value for our customers? And just be immersed in that customer experience. And same thing with their team. You'll come up with something quicker and actually, You, most of them, higher quality than you would if it's your, if it's your part-time job.
Bill Carr and Colin Bryar: So Dave Limp, who's the SVP of devices, has a great quote where he says, the best way to fail at inventing something is to make it someone's part-time job. And so the way Amazon develops products by starting front in services, you start from the customer experience and, and then work backwards from that.
Bill Carr and Colin Bryar: You have to really get deeply immersed into what is the experience I'm trying to create. And that's hard to do when you, your contact shifting to something very different. And especially if what you're trying to create is a small business, right? Right now. It may be very large in the future, but it will always suffer.
Bill Carr and Colin Bryar: It'll be number four or five on your priority list if you have, you're also running some very large businesses on the site. So even for senior executives. And many times Amazon has taken very senior executives from large businesses and put them on, a non-existent business and said, can you go create this?
Bill Carr and Colin Bryar: And that would be a career breaker at some companies. And a few examples are with digital. They took Steve Kessel, who was running the physical books, music and video business, which was 77% of Amazon's business. When he switched to go figure out how to do digital, we didn't really know this. We were gonna build a Kindle at this point.
Bill Carr and Colin Bryar: We didn't know if we would do music first or video, but it was Steve moving from one of the biggest jobs at Amazon along with Bill Car, my author. To a group that, a handful of people saying, now you need to go figure out digital. And that actually took about a year and a half, two years to go figure out what we actually, the components we needed to build.
Bill Carr and Colin Bryar: That would not have happened if Steve and Bill also had to run this very large cash cow for, for Amazon. So that's just an example of a single-threaded leader, how you get there. You have to have an organ, you have to have two things. You have to have a technology infrastructure that allows you to separate these things.
Bill Carr and Colin Bryar: And don't have to go into too much detail there, that's, you have to deliberately set that up. And if you see dependencies, you need to remove them. But the second thing is you need to teach people how to be autonomous and take control of their own destiny. And in some organizations, if they're used to being told by someone else, here's what you should do next.
Bill Carr and Colin Bryar: Or I, you present your plan, I'm gonna go review everything and I'm gonna tweak it and make sure it's, it, it's right. And, it's not really your plan. You have to give people and teach them how they can be autonomous and ru and run on their own. And then finally make sure that the person who's working on that opportunity has the skillsets and experience sets, is commensurate with the opportunity at hand.
Bill Carr and Colin Bryar: You can't have a junior product manager, for instance start Amazon's digital business, which would become Kindle prime video and prime music. You had to have someone like a Steve Kessel and a Bill Carr who knew what success looked like. You had to have someone like Andy Jassy when he went over to web services that there was no revenue there.
Bill Carr and Colin Bryar: But he then created this cloud. He created cloud computing didn't even exist then. So he and his team created the cloud computing industry. But Andy had just left as Jeff's. Shadow. And he could have had any job in the company he wanted to, but he went to this experimental thing that had a high chance of failing, but created cloud computing.
Bill Carr and Colin Bryar: But he was a single-threaded leader on that.
MIke Parsons: Mark. The big point there is Andrew Jesse, who is currently the c e O of Amazon, started his path to being the c e O of Amazon, you might argue by moving out of a big unit to go and run a little thing. At the time, zero revenue we just heard called a Ws Web Services at Amazon, right?
MIke Parsons: I think this tells you everything about this idea of the single-threaded leader giving good people. 100% remit and mandate to own something completely rather than what they pointed out. In that clear, what Colin was talking about is if I'm running a couple of big things inside of an organization and you give me another thing that has zero revenue, it's going to the bottom of the priority list, right?
MIke Parsons: . . That's right. It's just illogical and unimaginable to think that if I've got a million dollar or a billion dollar business over here, that the non-existent business. The concept of a business is somehow gonna get my attention first thing in the morning. No, it's not.
MIke Parsons: It's just not gonna happen. So if Andrew Jassy, the current c e o actually made a segue from running a big team to a team with zero revenue and they had to figure out what even what business they were gonna be in, it turned out to be one of their most profitable businesses Aw. W s And he's now the c e o To me that is the path that we can all study and understand.
MIke Parsons: And I guess the thing I want to ask you, mark, is if we've learned that lesson through Andrew Jassy, if we've heard Colin talking about, as they studied Amazon, what they did with this idea of single-threaded leader, what can we do either as individuals or as managers to make. This philosophy happen for our teams, like how do we actually transition to this and what can we learn from.
Mark Pearson Freeland: I think I'm reminded of a lot of the lessons we heard from mark Manson with the ARD of not giving a, as well as some of the work of Daniel Pink, the power of regret, specifically around not being worried about what other people are gonna. I think if my manager or if I was in a situation where I was a people leader and I was delegating a particular job or role or responsibility to a colleague or a direct report, let's say it was one, similarly to what we're hearing from Colin, and it's a very single minded approach.
Mark Pearson Freeland: We want this individual or this colleague to focus purely on one particular task. I think the teachings and the work that we've uncovered with somebody like a Mark Manson is to turn around and give the the direct report or the colleague the power. And the ability to turn around out well, as well as the confidence to turn around and say no to other people within the organization.
Mark Pearson Freeland: When they come asking for assistance. Now I'm not necessarily advocating for turning your back on colleagues and saying, no, I'm too important for your time and so on. But in order to, I think fully commit to a single-threaded approach, similar to what Colin's telling us, you'd have to create enough space around the employee that they are able both emotionally but also physically from a job perspective, capable of turning down or deprioritizing those other KPIs or other work streams in order to focus solely on the thing that is indeed the topic.
Mark Pearson Freeland: In that case from Colin, obviously aws, I don't think without that, having that bandwidth to focus solely on aws, it would've been quite successful, or at least perhaps it would've been in a longer period of time. I think the most efficient way to get to a, a scalable position is going to be by fully committing, and I think you have to create that around the employee first, rather than being able to launch straight in.
Mark Pearson Freeland: What do you think, Mike?
MIke Parsons: I think the interesting thing is that there's a story of giving good people a blank canvas and saying, I believe in you. Just take full ownership and I'm sure you're gonna do something great with it. I think it's also valuing not just who has the biggest revenue, which is very common in larger organizations.
MIke Parsons: The person that's running the biggest business is, effectively the number one dog. I think what we're seeing here is the number one dog is that he or she that can create something. And the creation of a business unit that actually goes on to be a billion dollar unit is why Andrew Jassy became the c e o and none of the other people because he went and created something outta nothing.
MIke Parsons: So I think there's a there's so much of a growth mindset mindset here. I also think there's extreme ownership. So Yuko Wilin would be pretty proud of Andrew Jassi because he got in there and they didn't even know how they were gonna make money at a w s Exactly. And look at what they built.
MIke Parsons: Don't you think that's like an ownership story? I
Mark Pearson Freeland: think you're right. I think the ability for Andrew Jassy to then again, be able to focus solely on it and know that without him being at the helm, nobody else is gonna do it. Yeah. That moment of extreme ownership is like being in charge of your Plato.
Mark Pearson Freeland: You are away from your leaders. You are away from your generals who know the lay of the land and so on. They've tasked you to make that decision. Yeah. In get it done right, get it done. And I think that's a huge takeaway from this idea of the single thread leader, which is not only you've gotta be given enough space, but actually it's up to you.
Mark Pearson Freeland: It's your call. It's Andrew Chassy's responsibility here, isn't it?
MIke Parsons: It is. And the thing that we're fighting against here is, and this is a theme that's come up a lot, is trying to do too much at the same time. If you think about some of the lessons that we've learned, for example Einstein, he famously said he just spent more time thinking about one problem.
MIke Parsons: And that's part of how he unlocked so many groundbreaking principles was he just focused. And I think it's very hard to focus in the way in which we work. How many people talk about trying to do as many different things. In fact, I think we had a clip recently which talked about this very thing like businesses are often, I think it was Mari Kagan, that people are often chasing multiple targets At the same time, we've got an initiative over here, we've got this one on people in diversity.
MIke Parsons: We've got this one on re-imagining the business model. We've got three new products in the pipeline and it's very easy to fall victim of thinking if I spread the peanut butter really wide, something will stick, right? Something's gonna taste good. But the reality is what we're seeing is apart from the ownership, And the belief in these people that we've nurtured and who are raising the bar, is this simple idea of focus.
MIke Parsons: And, we can bring that onto ourselves and say, if something really matters to us, are we allocating the time to it? And part of what we learned in our Steve Jobs show is sometimes you have to say no, sometimes you can't have five massive strategic priorities. Maybe you can have one or two. You've gotta be able to give the time to it.
MIke Parsons: So what I notice, mark, is if I can't allocate time in my diary I use this. This act of time blocking in my calendar, which is something you and I have mentioned a lot , and when you allocate on your Monday morning is when I like to allocate all my time for the week. If you notice that you're unable to squeeze in time for a priority, it is often the case that you're trying to do too much.
MIke Parsons: Yes, you have too many priorities. So I think the act of time blocking is a great way to take a quick look at what matters to you and see if you can actually allocate time to it. And if you can't, that's a signal that, hey, you need to become more single threaded as a leader because you're obviously spreading yourself too thin and there's just no way in the world if you've got five major priorities.
MIke Parsons: That's only a day a week. And as soon as I say that, mark, your, one of your top priorities only gets 20% of your attention. Does that sound like a balance, an appropriate allocation of resource to you? Look,
Mark Pearson Freeland: I'm if I was tasked with the creation of a w s and only spent 25, 20% of my time it's not delivering.
Mark Pearson Freeland: Exactly. To your point, Mike, what Mar Kagan was saying, he was speaking to us last week and in his book inspired about focus. Yeah. And he was calling out, only have two or three, two or three focuses, Mike. Yeah. Is not I've got at least twice that . And you're totally right to your point, the only way that we can, unless you are given this single threaded opportunity and you only work on one initiative at a time, bearing in mind that each initiative will obviously have sub requirements and steps and so on.
Mark Pearson Freeland: Unless if you're trying to spread yourself too thin like that, that peanut butter analogy, you c you can't do it. I'm similar to you. I love the time blocking. I time block my week often, several days in advance. I sit down with a whiteboard and my iPad, I make notes and to-do lists and so on, just to try and stay on top of each of those spinning plates.
Mark Pearson Freeland: But I can already see as we were de as we've been digging into the Amazon approach, just how. Many refinements I think that I can start to make, to try and be a little bit more efficient when it comes to the focus, when it comes to the product discovery piece that requires time rather than, throwing a kind of half bait response out the door and saying, that'll do, that'll buy me some more time so I can go and move on to this project instead, rather than doing that, which is a waste
MIke Parsons: of time, isn't it?
MIke Parsons: Absolutely. So can you allocate the time in your weekly calendar is a great test of whether you are being a single threaded leader. You might not be in a position where you can make five days of your week allocated to one thing, but you can certainly take inspiration from Amazon and what we're learning from authors Colin Breyer and Bill Kari in their book Working Backwards, which uncovers all the secrets to Amazon and how they did it.
MIke Parsons: You can ask yourself, am I being a single threaded leader? And if you have those moments like I do Where you're like, you know what? I'm struggling to allocate the time. Then you know that you're spread. There's a real risk that you're spreading yourself too thin and you're not gonna get the results that you want.
MIke Parsons: But Matt, when we study Amazon I'm hearing some themes that we can go master. I'm hearing I'm hearing entrepreneurship, I'm hearing product discovery. I'm hearing all sorts of, really creative ways of building something from scratch, like true entrepreneurship. And Matt, we in fact, have a master series on entrepreneurship, and if our listeners head over to moonshots.ao, click on the member button if you become a member, which will cost you one cup of coffee.
MIke Parsons: A month. Okay. You can unlock not just the entrepreneurship master series, but in fact there's 18 month, is there maybe close to 19 different master series all to help you crack that product, build that business just like Amazon,
Mark Pearson Freeland: right? I'm gonna go one better, Mike. We've actually got 20 Live Master series episodes ranging from wealth creation through to health.
Mark Pearson Freeland: There's ideas on creativity, the stoics goal setting, as well as managing people, and even rapid prototyping, which we obviously dug into and heard from Marty Kagan in last week's weekly moonshot show as well. There's just a plethora of additional information within the master series that at the cost of just one coffee a month, Mike, I think there's a lot of bang for your buck within that small investment.
Mark Pearson Freeland: I'd say. I think
MIke Parsons: it's better than a double shot espresso for sure. , I'll tell you what also is better than a double shot Espresso is abandoning PowerPoint and actually writing down your ideas. This is something we've celebrated with journaling and Matthew McConaughey. You are talking to two advocates of writing stuff out properly, clearing your mind, critical thinking, and that's exactly what they do at Amazon.
MIke Parsons: So authors Colin Breyer and Bill Carr in their book Working Backwards, when they studied Amazon, one of their biggest takeouts was the fact that PowerPoint ain't their friends. So let's have a listen. To Colibri to find out how they do it. So
Bill Carr and Colin Bryar: I, two, two of the years I spent at Amazon, I was Jeff Bezos's technical advisor and it's commonly called the chief of staff at other companies internally at Amazon.
Bill Carr and Colin Bryar: It was called the Shadow, Jeff Shadow role, but it really meant spending about 10 hours a day with Jeff for two years. And they spent those two years. I was very lucky to have had that role, but it was between 2003 and 2005 where Amazon really was facing a pivotal. It was a pivotal growth period.
Bill Carr and Colin Bryar: We were growing big and we could either become like. Most big companies and adopt those processes and slow down and become more conservative, or choose a different path. And in the several different areas, we did choose a different path really to stay true to the roots and of Amazon and move fast.
Bill Carr and Colin Bryar: And one of 'em was with using narratives, which are six page written memos over PowerPoint and with Jeff Bezos his executive teams, his direct reports were, it was about 14 people at the time called the S team. So we would meet every Tuesday for four hours, where we would have two or three groups come in and present issues across the whole company.
Bill Carr and Colin Bryar: Some of them were updates on business businesses, some of them were decision making forums. Hey, should we move into a new geography or open a new product category? And, everything in between. And these meetings worked just like any other company at that time, the teams would come in and present a set of slides.
Bill Carr and Colin Bryar: Sometimes they would make it through the slides most often not cuz you had 14 very critical thinkers peppering the presenters with questions before they could get to the next slide. And we realized we were not making. The high quality decisions and the businesses were only getting bigger and more complicated, and the stakes were getting higher and higher.
Bill Carr and Colin Bryar: And Jeff is, he's famous for his long-term thinking. So if you take a look at that and say, where is this thing gonna go if we double and triple it's just gonna get worse. And we realized it wasn't the teams, we tinkered around with different PowerPoint formats that the teams had to come in and use, and that wasn't working.
Bill Carr and Colin Bryar: And we were influenced by a professor at Yale University, Edward Tufty, who was a big proponent of using narratives in instead of PowerPoint. And it was one day, week in June of 2004 where Jeff just made the decision, we're gonna go try something new. And from now on, every team that comes and presents to the Amazon management team is gonna come in with written narratives versus slides.
Bill Carr and Colin Bryar: So it was a rip the bandaid overnight move, and it was very unpopular at the. I felt good about it, but I think Jeff and I were the, probably the only two people in the company who thought this was a good move. And I'm, I don't think I'm exaggerating too much about that.
Bill Carr and Colin Bryar: People,
Mark Pearson Freeland: I can validate that
Bill Carr and Colin Bryar: Colin, I'm presenting next week what, what is a narrative and what is it supposed to look like? And there are a couple noteworthy things. One, it was an experiment and if it didn't work, we could have always gone back a couple weeks or a couple months later to using slides.
Bill Carr and Colin Bryar: So we knew what we were doing wasn't working, so we had to try something. It was a reversible decision and, it also wasn't a knee-jerk reaction. We had been studying for past couple months. Jeff and I really bouncing ideas off of one another on how to improve these meetings. Cuz they were very important.
Bill Carr and Colin Bryar: They're very expensive meetings. It was the top leaders at the company and the first couple weeks, the first narratives were. Laughably, primitive and poor. If you were to look at them today and compare them to an an Amazon typical narrative that's written today, you, you'd laugh at the difference.
Bill Carr and Colin Bryar: But Jeff, a couple years later called it that move, one of the best decisions Amazon has ever made,
Mark Pearson Freeland: one of the best decisions that Amazon has have ever made. Mike, I think we, we've all gotta set aside, and I'm including myself here, the presumption that it's going to be difficult to start doing.
Mark Pearson Freeland: I was saying to you before we hit the big record button that I'd love to try this particular technique. The truth is, you can start today, can't you? It all, it, all it takes is you're still applying the same level of thinking, same level of perhaps even time. Maybe you're probably gonna save a little bit if you're not building out a huge PowerPoint presentation and so on.
Mark Pearson Freeland: But the actual act of sitting down, being focused, Being creative even, and also objective, I would argue is quite similar to how you and I have employed the skeleton creation that we often have done prior to then getting into the next stage, which is then populating a presentation with content.
MIke Parsons: So you are talking about basically doing a bit of a wire frame, table of contents of an outline before you actually get writing.
MIke Parsons: You write down 10 bullet points that you know you want to cover, right?
Mark Pearson Freeland: I think that's the, that's, I think we were starting, you and I when we've employed this technique before, we're scratching the surface of what I think Colin is revealing to us in that clip. I think by getting our own thinking down onto a blank piece of paper, specifically like a Word doc or even an April piece of paper, and then trying to communicate perhaps the context.
Mark Pearson Freeland: What am I trying to solve for? What am I actually trying to say to my colleague, Mike? What am I trying to convince him to do? Followed by a particular, maybe a bit of research. Maybe a point of view, Hey, I remember when we did this thing and this is what we found based on some performance. Maybe this is worth investigating again, followed by the actual, proposal.
Mark Pearson Freeland: I think. Is what we try to start to do and what I try and do when I'm tasked with going out and creating, a pitch deck or a proposal and so on, what Colin's obviously saying here, and I think is the big aha for me and how I can start to use it in my day-to-day work is you cut out all of the nonsense, don't you?
Mark Pearson Freeland: You cut straight into the important stuff, which is what we all go into these meetings and conversations to try and do,
MIke Parsons: isn't it? Yeah. Yeah. I think there's so much in this idea, I think first of which is if you want to get your thinking clear, being forced to write it out is a more rigorous process than designing PowerPoint because PowerPoint is much more visual, so there's nothing wrong with a beautiful looking deck, but it is.
MIke Parsons: Running, you are running the risk that you make. Bad idea look good rather than a good idea. Look bad. . Oh yes. . So I think we get too preoccupied with icons and fonts and we don't deal with the subject itself. And I think what this practice does is it forces you to get your thinking clear. And I, the parallels with journaling are immense here.
MIke Parsons: I think, you and I have talked about the benefit of journaling to get your own personal thoughts into a structure to get rid of the monkey mind, to clear your head to focus. Like writing is such a purge of all of the noise and a, and it's such a great act of clarity formation. What are you trying to say?
MIke Parsons: , it's always the classic question here do I really wanna say that? No, you try something else. But what they're doing is deliberately if you've got an idea, like six pages should be nothing. If the idea is good enough, there should be a lot to talk about. What's the problem you're solving?
MIke Parsons: How, what are the solutions look like? How are people currently doing it? What's your unfair advantage? What's your value proposition? What customer challenge are you getting? What are the costs? What are the revenues against this? That's six pages in a heartbeat. I think what this secretly filters out is half baked ideas.
MIke Parsons: Because I think what, when you gotta produce six pages, it's yes, it's like being back at high school or university. But I think the reality is if you can't produce that, then the idea is not formed enough or you haven't gone into it with the appropriate R for it to be shared and tabled with your colleagues.
MIke Parsons: So this is, I think, working on so many levels and what stories I've heard from Amazon is people get together and they reread the six pager in the meeting before anyone discusses anything. So they'll sit there
Mark Pearson Freeland: quietly. Yeah, read it all to yourself, then let's have a
MIke Parsons: conversation. And I just think like in, in the modern way of working, which is so fast, so multi-threaded, so some might even argue so distracted to sit and read and to write and to think clearly.
MIke Parsons: It's like a lighthouse in this ocean of noise. And I think it is perfect, but my, we've learned so much, but there's still actually some more that Amazon has to teach us, right?
Mark Pearson Freeland: We could just keep on going here, Mike, we could just leave the record going. We can refer back to our own experiences.
Mark Pearson Freeland: But you are right. We've still got some more stories from Bill car. So in this next clip we're gonna hear from Bill is actually breaking down the namesake of the book, specifically the Working Backward approach and how to utilize pr, F A Q.
Bill Carr and Colin Bryar: And we were spending a lot of time with Jeff and iterating on how do we how do we conceive, how do we have a productive method for conceptualizing and debating and discussing different product ideas that we could go develop and like all these other process like all these other processes.
Bill Carr and Colin Bryar: It was a journey. So we started off using, tried intr. Techniques that we had been taught in business school, like coming in with spreadsheets that projected the size of these businesses, projected our market share, discussed the financials, discussed the kinds of deals we would make with content providers, et cetera, et cetera.
Bill Carr and Colin Bryar: I'm sure at some point we may have even conducted a SWOT analysis where you looked at our strengths, weaknesses, opportunities and threats. But we know we'd bring these dry sort of numbers and spreadsheets and projections into Jeff and what he would react to. He would look up from these documents and just squinted us and say, where are the mockups?
Bill Carr and Colin Bryar: And what he meant by that is, this is, somewhat useful information, but would be much more useful, is to understand what's the customer experience you intend to build. So we actually did follow up with meetings where we brought in mock-ups designs of what the website experience would be. But developing a high quality mock-up is actually a very expensive process.
Bill Carr and Colin Bryar: It requires, usually more than one skilled designer requires you to actually think through a lot of details of what the product will be. And that was quite heavyweight, so we tried that for a while, but that didn't get us much further because we spent so much time worrying about the mockup that we weren't spending time worrying about what was the actual customer experience going to be.
Bill Carr and Colin Bryar: So finally Jeff proposed a different way, which was to say, why isn't everyone in this meeting? Simply write up a document describing what they think we should go build in digital media. And we did that. We went away, came back a week later with, I don't know, six or seven or eight documents that people had drafted.
Bill Carr and Colin Bryar: And we read through these and we realized that we were getting somewhere. Now, because this was a much lighter weight process, any one individual could on their own, write up a document to describe an end to end customer experience. They didn't require a designer or special skills. And secondly you could very efficiently in a few hours plow through many different ideas and have high quality discussions about them.
Bill Carr and Colin Bryar: And then he took it one step further and said, I know instead of these sort of just the he framed and created a way to take those documents and formalize them as this pr fq. He said, let's write the press release and let's write that first. Because by starting at the end of the process, that's when you're actually very focused on what are the customer.
Bill Carr and Colin Bryar: About, about the customer and what about this product is really going to appeal to them. And so that when they read this press release or read about it in the press, they'll actually want to get outta their chair and go buy it. And so when you do that, when you write the press release, you are hyper focused on what problem you're trying to solve for the customer and how this solution, this product solution, really solves it in a meaningful
MIke Parsons: way working backwards.
MIke Parsons: Now, this is an incredible paradigm that we have seen in so many different ways. For example, even Stephen Covey, the Seven Habits of Highly Effective People talks about, start with the end in mind.
Mark Pearson Freeland: Y you know what, Mike you're a funny guy. Clearly you and I, we've recorded a lot of shows, but the note I've got right next to me here is Stephen.
Mark Pearson Freeland: I think you're totally right. This screams to me With experience. , Amazon are clearly leading from having had, again, so many intelligent people around the table. They've obviously started to put in to practice that single thread leadership approach. You're empowering people in the right way.
Mark Pearson Freeland: You're giving them that ownership. And to go that one step further, similar to what we were finding out with regards to text being better than the PowerPoint, is again, just using the most efficient way to communicate an idea. And in doing so, actually prototyping the idea in a very low fidelity process, isn't it?
Mark Pearson Freeland: That's right. Just by starting out with that mission statement or the idea of what that product could be what problem is it solving? Then sifts out, as you were saying, sifts out the the weaker ideas against the strong ones because, on a piece of paper or on six piece of paper, I think a strong idea is going to very easily stand up more so than a much weaker one where obviously when you're in a room full of your colleagues, they'll be able to pull it apart or they'll be able to find potential holes.
MIke Parsons: Yeah. And what we're revealing here is a way of thinking about outcomes. And actually if you want to, put a map on the wall and then put a pin and say, this is where we want to get to. You know that you're on a mission, you're on a marathon. But what is critical is to make sure that you are doing the right things on the inside to get those results at the end, or perhaps the results on the outside.
MIke Parsons: And we have this one final clip where we are going to hear from Jeff Bezos. And it really is going to reveal to us how to think about how to view, what perspective to take towards the business. And it's all got to do with inputs and outputs. The stock
Jeff Bezos: is not the company, and the company is not the stock.
Jeff Bezos: And so as I watched the stock fall from 113 to six, I was also watching all of our internal business metrics, number of customers, profit per unit everything you can imagine, defects, et cetera. Every single thing about the business was getting better and fast. And so as the stock price was going the wrong way, everything inside the company was going the right way and.
Jeff Bezos: I, so I wasn't, we didn't need to go back to the capital markets. We didn't need more money. The only reason a financial bust like the internet bubble bursting is, makes it really hard to raise money. But, we already had the money we needed, so we just needed to continue to progress.
Jeff Bezos: I
Mark Pearson Freeland: think, Mike, what we're really hearing from that final clip with Jeff Bezos is the fact that it's so key and so important to step back from the stresses, from the inconvenience of trying to, function and work across so many different elements within your own business that you can get overwhelmed.
MIke Parsons: Yeah. Also, there are too many things. Also, don't forget. At a certain point, stop listening to everyone on the outside. Look at the facts of what you're doing on the inside, right? Because there was all the noise. Everyone's look at the stock price. Amazon's tanking. It's terrible. But he's I was looking at our core business and our customer and the traffic lights were all green, right?
Mark Pearson Freeland: , and he knew, Jeff Bezos knew that at the end of the day, things will start to ride itself. If you've got the strategy, if you've got the single-minded let's call it mission statement, if you know exactly what it is that you are going out to try and do,
MIke Parsons: but I would say it's more than that.
MIke Parsons: Mark, he said, I looked at our customer, the customer. Metrics were all good and growing, so I didn't need to listen to some external blah blah about our stock price. I knew the fact was happy customers and the business would always win if it had happy customers and he didn't get distracted by the stock market.
MIke Parsons: By the financial press. He's my numbers are good. I don't care what you guys say. That is such resilience , cuz you can play the bigger game because think about the panic that, many CEOs and PR and investor relation departments would get in if they're getting a barrage of negative feedback.
MIke Parsons: He, for many years, got negative feedback that they didn't pay a dividend. He's Nope, I'm not giving you money back. I'm pouring that money back into the business. I think everyone can see what that did for them despite all the noise on the outside. It made sense on the inside.
Mark Pearson Freeland: And it goes back to again, The value that we were hearing about earlier with working backwards, starting with the customer in mind.
Mark Pearson Freeland: Yes. This is the thread, I suppose you could say that exists from Marty Kagan's book as well as into Colin and Bill's book with working backwards, being customer obsessed. Absolutely.
MIke Parsons: Knowing that you're creating products and they're so obsessed that they put it in their vision statement.
MIke Parsons: It is all about being the most customer obsessed company on the planet. They don't even talk about what business they're in. No. Exactly. They don't need to. They're in the business of customer obsession, mark .
Mark Pearson Freeland: Exactly. How wonderful is that? And I think we've definitely found that throughout the working backwards book, haven't we?
Mark Pearson Freeland: Yes. Customer obsession is intrinsic through everything that has Amazon that led to Amazon's great success makes and
MIke Parsons: continues makes, it makes things so simple, right? If it's just about the customer and you believe everything else will sort itself up. If you've got happy customers, then all right, then great.
MIke Parsons: Let's focus on the customer. But Mark, what are you gonna focus on? We've studied so much of Amazon's entrepreneurial and product success. It's the perfect kind of companion to Maddie's book. Inspired what, what's gonna get your attention? I
Mark Pearson Freeland: think it's the working backwards approach of starting with the end in mind.
Mark Pearson Freeland: I obviously, Being custom obsessed is the end in mind, but actually from a practical perspective, thinking about releasing a product and writing out how you're gonna communicate that product or service to customers and how you want them to respond, I think is a wonderful experiment and exercise to try and do, to stress test whether you are coming at it in the right way.
Mark Pearson Freeland: So for me, I think working backwards and starting with writing something down is gonna be the key thing that I'm gonna start playing around with this week. Mike, what's standing out to you with working backwards?
MIke Parsons: Oh, I quite like that last clip. Focus on the inputs and the outputs will sort themself out.
MIke Parsons: That's pretty good. Isn. Yeah. I
Mark Pearson Freeland: love that. I think that's pretty interesting, and it's a core reminder of a lot of the things that we learned on the Moonshot Show. Focus on what I really matters, rather than getting overwhelmed with
MIke Parsons: distractions. There you have it. Mark, thank you to you for joining me on this Rip Roaring Adventure into the entrepreneurial success of Amazon, the product magic that they have, and we learned how they did it here on Show 218.
MIke Parsons: Colin Breyer and Bill Carr, authors of working backwards, and I wanna say a big thank you, not only to you, mark to the authors, Colin and Bill, but I wanna say a big thank you to our members and our listeners too, because boy did we learn a lot about Amazon. Number one, they use hiring to raise the bar.
MIke Parsons: They keep on getting better, and then they take those people and they make them single-threaded leaders so they can focus on what they do best. And that theme of focus continues because when they've got an idea, text is better than PowerPoint. And when they think, when they put their minds to that focus, they often start with the end in mind.
MIke Parsons: Such a big moonshot theme. Another one that we learn about Amazon is if you focus on your inputs, the outputs will take care of themselves. So there you have it. We have learnt out Loud together from Jeff Bezos, from the company, Amazon, and the book of Working Backwards. I hope you've enjoyed this process of learning out loud, of challenging ourselves on how we can do it just like Amazon, how we can be the best versions of ourselves, and that's what we're all about here at the Moonshots Podcast.
MIke Parsons: Okay, that's a wrap.