Amazon is the largest river in the world. A prescient name for a company that is fast becoming the largest, if not simply the most valuable company in the world.
Amazon, the river, may be far easier to understand than Amazon, the company.
In the former we can simply say, “It is a large river that seeks the quickest route to the ocean.” Water always falls perpendicular to the fall line. In fact, its called the fall line for that reason. And Yes, it is the largest river.
In the latter what do we say? The largest bookreseller, toyreseller, apparel seller, content provider, media reseller/creator, etc., etc.
Let me say that none of these are actually Amazon’s business.
To understand Amazon’s business we have to see Amazon for what they are…they are the most successful business of the digital/internet era and that is the key. Amazon is not a business of things. There is no confusion. Amazon is not about any particular category of outcomes or things.
Amazon is a business that perfects process by using digital tools, technologies and data. It has no industry competitor specifically. By that I mean Amazon does not consider a particular industry vertical as a boundary. They are able to go everywhere and anywhere because business, modern business, has a new major component at its core and it is about using technology to drive efficiency as both an art and a science.
Perhaps most importantly Amazon is not in love with their own creation. They love the customer. They are in constant pursuit of more love. They do not marvel at their own creation so much as marvel when the customer approaches them. If the customer is not approaching, some is wrong….wrong with the them, not the customer.
That means Amazon’s business is business itself. It is pure commerce. The ultimate democratic customer centric machine. Amazon’s business is the relentless pursuit of business as a perfect science. Let’s face it. When you combine the reality of Amazon’s business pursuits with their hyper focus on the customer, who always has a seat at the table, you get an unstoppable machine that will sniff out weakness in any category that does not focus on driving out expense while pursuing extreme customer worship.
What do books have to do with pants or AI or movies? Nothing except that they are businesses. There you go. They are all in Amazon’s world view.
How many times have we heard the following about Amazon:
- What is Amazon’s business?
- What is their end game?
- What do they know about grocery stores?
- What do they know about software?
- Who is Jeff trying to compete with?
- How can they get into that business?
- That business doesnt seem to fit their comfort zone?
- What is their portfolio strategy?
You see, most companies do not pursue business process as their business. They view the output of their process as their product as opposed to viewing the process as the product or expertise. Don’t forget, Amazon is one of the top 10 largest employers in the U.S. too.
The result of their pursuit is that Amazon is simply better at optimization. When they are up and running, their comparable offering in any particular category will drive 30-35% out of the cost of any outcome.
Analysts often express skepticism about Amazon when it comes to Amazon’s apparent lack of sales and selling efforts around any of their solutions.
To that I would say the analysts are missing a key reality. Customers view business process or operations as an expense with very little value add. Therefore, if Amazon is able to make 30% of that cost go away Amazon will ATTRACT the customer. In other words, Amazon does not have to market or sell. The reduced cost will attract any and all comers in whatever industry vertical they decide has sufficient inefficiencies.
I can tell you, from first hand discussions, some of the biggest companies in the world are saying the following in the C-Suite, “Get us on Amazon now! They are way better than we are and we can save money.” Or how about, “Why do we have data centers? Its not our business! Lets just give it to Amazon so we can do what we do!” (And yes there were exclamations and even expletives.)
Look at the industries that are being disrupted based solely upon Amazon’s ability to drive out costs while delivering a good enough or even better solution.
(These are the businesses that Amazon is in, not the names Amazon applies to them.)
- book sales
- toy sales
- shoe sales
- office products sales
- data storage
- application management and delivery
- mobile devices
- contact center agent software
- telecom apis
- payment solutions
- media distribution
- content creation (movies/film)
- content distribution
- office productivity
- transportation (human and goods)
I probably missed a few too!
The point is that Amazon is a process machine consuming opportunities where the existing businesses are not embracing technology to drive out expense.
If your business is on this list, it is time to accelerate your decision making and become unwavering in your pursuit of excellence and customer focus.
If your business is not on this list, do not believe that you are somewhere that Amazon will not go. You need to consider that Amazon is already looking at your business. If they are not outwardly in your business it may be that they are perfecting their solution and waiting for the right timing to reveal themselves. Or they may see that you have successfully optimized and upheld the customer as king. For your sake, let’s hope its the latter.
If you think Amazon is not coming for your business, you might be in de-Nile!
Don’t forget, this is Amazon, not some river in Egypt. 😉