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Wednesday
May292013

Amazon: Creating a Customer Utopia One Culture Hack at a Time

If you don’t cannibalize yourself, someone else will. -- Steve Jobs

 

 

America as the New World has a long history of inspiring Utopian communities. Early experiments were famously religious. But there have been many others as new waves of thought have inspired people to organize and try something different.

In the 1840s Transcendentalists, believing the true path lay in the perfection of the individual, created intentional communities like Brook Farm. We've also seen socialistanarchist, hippy, and virtually every other kind of Utopia in-between. Psychologist B.F. Skinner wrote an infamous book, Walden Two, with a more "scientific" take on creating a Utopian community and Ayn Rand in Atlas Shrugged had her free market version.

I believe in startup organizations we see the modern version of Utopian energy in action. We now call it by names like "culture hacking", but the goal is the same: to create a new form of human community to achieve a profound goal. You may think startups are only about money, and they are about the money, but they are also about building something great and creating lasting value. There's a powerful vision and purpose animating the best of startups.

And the startup industry is completely self-concious and about its structure and goals. Nothing is done without a reason. Just like how Utopian communities are founded. Many of the profiles on High Scalability have large sections on how a startup culture is created and maintained. It's a hot topic of discussion in the industry. Almost taking on a religious tinge, as if a new social structure was being formed.

So I was interested to see in Amazon: We cut prices to scare ourselves into innovation how Amazon's fecundity is no accident. Amazon uses purposeful culture hacks to create a stunning stream of new features and prevent the culture rot that normally infects larger successful companies.

What culture hacks does Amazon use that you might be able to learn from?

  • Use price cuts to scare yourself into innovation: We are internally driven to improve our services, adding benefits and features, before we have to. We lower prices and increase value for customers before we have to. We invent before we have to. These investments are motivated by customer focus rather than by reaction to competition.
  • Just-in-time improvements are too clever by half. It's risky in a fast-moving world to think you can manage innovation. Go full out. Make your customers happy rather than play to your competition. 
  • Get your customers to say wow. AWS has cut prices 27 times since 2006 and developed 159 new features and services in 2012. This helps develop long term customer loyalty.
  • Grow rapidly at the expense of short-term profits. Amazon has invested in Prime, Kindle, AWS, and digital media all as a way to get ahead of competition and make customers happy.

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