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Jeff Bezos’ Annual Letter

547 points by djyaz1200 10y ago

mstank 10y ago
"A common example is process as proxy. Good process serves you so you can serve customers. But if you’re not watchful, the process can become the thing. This can happen very easily in large organizations. The process becomes the proxy for the result you want. You stop looking at outcomes and just make sure you’re doing the process right. Gulp." Seems like this is exactly the kind of issue companies like United Airlines suffer from.
- tyingq 10y ago
  Amazon is guilty of this, not so much with customers, but with partners/sellers.
  - eloisant 10y ago
    I don't think it's because they care too much of the process, but because they value consumers much more than sellers.
    - tyingq 10y ago
      I'm thinking, for example, how they dealt with the recent issues of counterfeit books. Their process did not help the seller or the customer.
- dpark 10y ago
  > It’s not that rare to hear a junior leader defend a bad outcome with something like, “Well, we followed the process.” - Bezos > We sought volunteers and then followed our involuntary denial of boarding process - Munoz Ouch
  - TheGRS 10y ago
    Yea, I'm not going to share which airline or which branch (other than to say it wasn't United or Chicago), but I have a relative who works at a pretty high position in one of them and they were, to my great surprise, in defense of United and the police in that episode earlier this week. Statements like "airlines bump people all the time", "they can't offer anymore than what they did, its a set rule", and "if they just complied none of this would have happened, its a crime to disagree with flight crew" kept coming up. This is the mentality that permeates the airline industry and is what lead to that episode. They don't put satisfying the customer above following the rules. Its also why no one who has flown much was particularly surprised it happened in the first place.
    - positivejam 10y ago
      Re: the notion that "airlines bump people all the time", there are those arguing that while it is indeed lawful and routine for airlines to bump passengers due to overbooking, this was not a case of overbooking, and once a passenger has taken their seat they have very different rights than when they are still waiting to board the plane. I am by no means an expert, but I found this article (posted on HN yesterday) to be illuminating: http://www.nakedcapitalism.com/2017/04/united-passenger-removal-reporting-management-fail.html http://www.nakedcapitalism.com/2017/04/united-passenger-remo... Basically, this wasn't just poor customer service, it was a violation of rules.
      - TheGRS 10y ago
        As I understand it they followed the procedures and rules just as they are defined and in the law. Had the guy willfully gotten out of his seat he would have been compensated the "involuntary bumping" rate that is set by the Dept of Transportation. But the fact that United got to that point is the problem. They had the option to offer more money for volunteers, they even had the option to find a different flight for their employees, or maybe send them on a cab ride instead (one passenger in the video even pointed this out while it was happening). Of course, the excessive use of force is on the police and they should be the ones outside of the law on this one, I don't believe being loud in that situation warrants you get a concussion, that's just wrong.
- smokeyj 10y ago
  This is how I feel about our democratic process. The process is you pick one of two parties. Then you get into a face bloodying fight with the other party. Nothing gets done, then you pat yourself on the back for doing your part. When you come to the realization that nothing has been accomplished, you blame those who didn't participate in the brawl. Suggesting that people work ON the process rather than IN the process will get you looks as if you've just insulted their religion.
  - smokeyj 10y ago
    This comment seems to be well received based on the points. I think about this often and it drives me nuts that the two party system is the best we have. It's like we're trying to optimize an operating system at every level EXCEPT THE KERNEL. Suggesting that you don't buy into the two party system is met with skepticism, as if you're a closet supporter of one party. Or worse, that by not supporting a party you're implicitly siding with "the other side" (You know, because we're on different teams). "You're either with us or against us!!'. Can someone just make a p2p party already? Any billionaire in SV could bankroll this project with their weekend funny money. I'd be willing to donate development hours. I'm just wondering if people would be willing to venture out of their comfort zone and "throw away their vote" for something that isn't mainstream.
    - dangero 10y ago
      Without runoff elections its always going to veer towards a two party system. It would work if we did two votes: vote first for who you want, then second vote for the best choice from top two.
      - smokeyj 10y ago
        Which leads to the next question. Why are we voting for a human at all? If members of an organization want a resolution passed anyone should be able to propose it - and if the magic threshold is met - then whala - the resolution is law. I want to be able to vote everyday. I want to be able to pick who I want to represent my vote - and change it at will. I want to be able to pick Bill Gates to represent me on technology issues, and Sal Khan to represent me on education. Government is just an organization, and an organization is a network. We should be using computer science terms to describe how we want this network to operate in terms of resolution, latency, redundancy, centralization/decentralization, upgrade protocls, failovers, and so on. What I'm trying to say is.. Let's purge the politicians and put the people in charge.
- hinkley 10y ago
  tl;dr: the map is not the territory This problem is pretty much every company I've ever worked for if/when they got over six engineers. I spend more time and a hell of a lot more energy than I should trying to keep managers or easily enthused engineers from hugging the project to death. I ended up becoming a process expert out of a sense of self preservation. I use process a lot, but it's always in support of the 'why's. I don't always talk about the 5 Whys but it's always there, and in my experience the people who are usually the problem can't ever manage more than three. The worst of these are also the sort of people who, if your speedometer was broken, would insist that the car is not moving. Even after you told them to look out the window.
  - Retric 10y ago
    Your trying to solve the wrong problem, it's generally a people problem not a process problem.
    - deleted 10y ago
      [deleted]
    - hinkley 10y ago
      The people problem is that everyone has the instinct to solve problems with rules, but not the energy or interest to do it properly. If you don't try to steer the conversation toward reversible decisions AND avoid trivialities then you spend your problem solving budget on actively harmful plans.
  - fbonetti 10y ago
    > The worst of these are also the sort of people who, if your speedometer was broken, would insist that the car is not moving. Even after you told them to look out the window. That's an amazing quote. I'm totally stealing this.
- partisan 10y ago
  Whenever a junior team member comes to me for help, the first question I ask is, "what are we trying to accomplish". Unfortunately, we have a tendency to lose sight of purpose when going through process. Discussions usually start with what they have tried and what they are doing, but when the question of purpose is asked, it's easier to see the steps to get the result.
- fbonetti 10y ago
  This is a surprisingly common trap to fall into. I worked at a startup in which the CTO criticized my dev team for not having a perfectly linear burn down chart. Every week in our retro we had the same discussion about how to improve the shape of our burn down chart; we tried putting higher valued stories at the front of the queue, involving QA earlier in the sprint, and cranking out 1 pointers mid week to tweak the graph. We rarely achieved the perfect shape. On top of this we also had one week sprints, which made it difficult to plan for the future or work on spikes, so we ended up doing very little high-level, architectural planning. I remember one week my team cranked through their allotted stories so fast that we ran out of work two or three days into the sprint. We decided to take on a couple extra easy stories that we knew we could finish before the end of the week. Rather than being praised for doing extra work, we were criticized for "introducing volatility into the sprint". In other words, we messed up the shape of the burn down chart. I'm currently working at a place that has virtually no process, which has it's own challenges, but I'm happy that I'm not arguing about burn down charts anymore :)
  - wjamesg 10y ago
    Burn down chart?
    - zer0tonin 10y ago
      Nice excel graph with the number of "points" burned each sprints.
    - fjdlwlv 10y ago
      It's a project management strategy named for how it makes you want to burn down the office.
    - fbonetti 10y ago
      It's a common metric used in the Scrum methodology. You start off the "sprint" with a set number of "story points" (say, 30 points), and end the sprint with zero points. When you graph the team's progress over the course of the sprint, it should ideally form a linear, downward slope. https://en.wikipedia.org/wiki/Burn_down_chart https://en.wikipedia.org/wiki/Burn_down_chart
- ryandrake 10y ago
  Reminds me of that Steve Jobs quote about IBM: “People get confused; companies get confused. When they start getting bigger, they want to replicate their initial success. And a lot of them think, ‘Well, somehow, there’s some magic in the process of how that success was created.’ So they start to institutionalize process across the company. And before very long, people start to get confused that the process is the content."
- cowardlydragon 10y ago
  Step 1 is the ticket wall.
- mahyarm 10y ago
  Netflix also talks about it themselves: https://www.slideshare.net/reed2001/culture-1798664/49-Process_Emerges_to_Stop_the https://www.slideshare.net/reed2001/culture-1798664/49-Proce...
smaddali 10y ago
I particularly like the concept of 'Day 1'. No matter what stage you are in as a business or individual, it is still day 1 for rest of your life. Taking long term view , keeping where you want to go in focus is really important.
- chrismealy 10y ago
  I always thought "it's day one" sounded like something a man says to his wife after he's been caught having an affair.
  - degenerate 10y ago
    No, that is called judgement day
dirtyaura 10y ago
Earlier thread about the letter https://news.ycombinator.com/item?id=14103818 https://news.ycombinator.com/item?id=14103818
sb8244 10y ago
I often say that we don't need to agree, just commit together. I particularly like disagree and commit better. It seems like it would shorten time to decision as long as no one takes it personally.
- Qworg 10y ago
  I really like "disagree and commit" but I'm worried how well it would work in most corporations. I think it requires incredible alignment amongst the decision makers about the goals of the project - something that is in short supply.
  - hinkley 10y ago
    I had a boss who thought he liked that idea but every meeting turned into an extra fifteen minutes of him badgering me for agreeing to disagree with plans that often blew up later. Sitting through the what went wrong meetings was an exercise in patience that I often lost. I have no doubt at all that he would label me as a toxic employee, and was not surprised at all to be in the first round of layoffs (worked out for me, I got 27 paychecks that year and a three week vacation), but most of that would be him projecting his issues onto me. He wanted to be a good manager but was so emotionally challenged by estimates not actually being blood oaths that it twisted every planning meeting into something ugly.
  - sb8244 10y ago
    We put a strong foundation of trust and knowing the other person has the best intentions. I don't think it would work without strong trust across the organization and especially up and down the chain.
  - leggomylibro 10y ago
    It sounds like he realizes that too, with his comments towards the end of the letter: "Fourth, recognize true misalignment issues early and escalate them immediately. Sometimes teams have different objectives and fundamentally different views. They are not aligned. No amount of discussion, no number of meetings will resolve that deep misalignment. Without escalation, the default dispute resolution mechanism for this scenario is exhaustion. Whoever has more stamina carries the decision."
jtraffic 10y ago
Does this come across as oddly inconsistent to anyone else? "These big trends are not that hard to spot (they get talked and written about a lot), but they can be strangely hard for large organizations to embrace. We’re in the middle of an obvious one right now: machine learning and artificial intelligence." "Another example: market research and customer surveys can become proxies for customers – something that’s especially dangerous when you’re inventing and designing products. 'Fifty-five percent of beta testers report being satisfied with this feature. That is up from 47% in the first survey.' That’s hard to interpret and could unintentionally mislead." What about ML as a proxy for customers?
- meow_mix 10y ago
  Depends on how ML is used. ML is much more than gaging customer satisfaction
OoTheNigerian 10y ago
This paragraph from his first letter to shareholders best illustrates how far Amazon has come. "We established long-term relationships elationships with many important strategic partners, including America Online, Yahoo!, Excite, Netscape, GeoCities, AltaVista, @Home, and Prodigy."
joshaidan 10y ago
I encountered "process as proxy" today dealing with Cisco. We were requesting a replacement for a defective part, they asked us for our serial number, which we provided, but then responded to us that our serial number was invalid. Likely because it wasn't registered. We were told that we had to contact our sales manager, or open a TAC with a different department because they department only deals with technical issues. Could they not have done something to help us, maybe forwarding the ticket to the department that could register the serial number, to help us rather than just leaving us stranded? It's as though they want to follow process rather than helping the customer.
- broknbottle 10y ago
  What was the part? They've moved to putting SN on everything, main board, chassis, etc. Make sure you have the correct SN. That being said Cisco TAC is atrocious.
- theptip 10y ago
  Devil's advocate -- there's a big grey market in Cisco parts, and so they are probably under strict instruction to refuse support service to anyone who isn't verified as a paying customer.
- Cacti 10y ago
  Blame Cisco for wanting to squeeze out every penny from their support costs at the expense of their customers. Most of this stuff is outsourced or structured in such a way that they try to reduce ticket time and increase tickets worked (because time = labor = money). But guess what's free in this equation? Your time. The vast majority of cost savings I see in the corporate world is like this; they're not saving money by doing a better, more clever job, they're just externalizing their costs elsewhere, whether it's another industry, another company, or another team in the same company.
- alyandon 10y ago
  I had a similar experience with digital ocean. I reported malicious traffic coming from another customer's VM via a ticket, provided logs, etc and their response was that I needed to submit all that information via email at their abuse email address instead. I responded that perhaps as a customer they shouldn't make me waste more of my time and instead forward the information that I had provided to their abuse department. Of course, they never responded after that. I'll never bother to report a security incident to them again. All because of "process". :-/
AndrewKemendo 10y ago
You have to admire the grit and tenacity it takes to maintain that kind of ethos for 23 years straight. What Jeff is basically saying here in this letter is that the pedal is to the metal, forever: We can't have process as the foundation because it ossifies the organization! Be nimble to the rules of the game. When translated however, that means you are either empowering your organization to change and make new processes at scale and speed, or you have whatever the default process of solving problems from scratch each time. It's the anarchist's dilemma. That is a tough organization to live under if you aren't built for that, and one that only a certain type of people can thrive in. I mean the majority of people, leaders even, when they get to some level of success will put the brakes on and coast, doing exactly the things Jeff describes: building processes to take the cognitive load off of decision making and making life just slightly easier. They build processes for "efficiency", so that they don't have to go back and do all the hard work of understanding the problem from scratch each time. The problem though, as Jeff points out is that "The process" becomes an 80% solution to 80% of the problems it's applied to (leading to 36% failure rate). So just think about how you could - for 23 straight years - recruit, retain and develop a cadre of managers, engineers, interns, staffers etc... that in the majority of cases fall into the mindset of constantly sprinting - basically an Olympic marathoner running a 5 min mile marathon. As a leader I admire that ability.
- devopsproject 10y ago
  By almost every account, Amazon is terrible place to work: https://www.nytimes.com/2015/08/16/technology/inside-amazon-wrestling-big-ideas-in-a-bruising-workplace.html?smid=tw-share&_r=1 https://www.nytimes.com/2015/08/16/technology/inside-amazon-... This isn't the type of leader you want to be.
  - ChicagoBoy11 10y ago
    Yet by every account that mattters it doesn't, right? I understand that people who are there can certainly wish that the place and culture were different in some significant way, but the only barometer that should have some weight is the ease or difficulty that Amazon has in attracting and retaining top talent -- and that to the extent that it is harming their ability to deliver results. Which, from the outside, it certainly doesn't seem to be limiting. The counterargument is that of course the things which makes Amazon's work culture toxic to people are orthogonal to their success and not a cause of it. My former boss was very well aware that she could sometimes be downright mean and nasty to our staff, and I cringed every time she justified it by citing what people thought the same of Steve Jobs: While true, we can't avoid the fundamental problem of causal inference, and there is no saying that had Jeff been actively striving to make a more welcoming culture, or if Steve or my former boss were nice people, that they wouldn't have experienced even greater success.
Gormisdomai 10y ago
Reposting this thought from the other discussion[0]: >Third, use the phrase “disagree and commit.” This phrase will save a lot of time. If you have conviction on a particular direction even though there’s no consensus, it’s helpful to say, “Look, I know we disagree on this but will you gamble with me on it? Disagree and commit?” By the time you’re at this point, no one can know the answer for sure, and you’ll probably get a quick yes. This sounds really powerful but also like it might be open to abuse (for example degenerating into passive agressiveness/half commitment). Does anyone use something similar in their own workplace? Does it work? [0]: https://news.ycombinator.com/item?id=14103818 https://news.ycombinator.com/item?id=14103818
- sb8244 10y ago
  Commented on linked comment. I think it boils down to a strong trust base where everyone has the best intentions in mind
- peripitea 10y ago
  I worked at Amazon for almost five years. Like every leadership principle, this one was easily perverted. Many people I worked with took this to heart, and among peers there was often an honorable sense of "OK, I will disagree and commit on this one". But I also spent a few years in an org where I don't think I ever saw someone more senior disagree and commit to the opinion of someone more junior. At each level of the hierarchy it was used as a way to excuse "you will do what I say". That's fine if it happens once or twice, but laughable if it's always flowing in one direction. The other leadership principles were perverted in similar ways. You wouldn't believe the range of things I saw justified as "customer obsession".
  - foobarqux 10y ago
    > You wouldn't believe the range of things I saw justified as "customer obsession". I would like to hear some of them if you have the time and inclination.
    - peripitea 10y ago
avar 10y ago
Odd to see Bezos cite number of Oscars & Emmies as a measure of competence, as opposed to revenue. A lot of movies that win awards aren't particularly good investments.
- arikr 10y ago
  I imagine it's a marketing tactic to accelerate the flywheel he cares about: more awards -> more talent that wants to write/sell to Amazon Studios -> more exclusive shows -> more customers -> more awards
- nebabyte 10y ago
  Why would that matter to him as a businessman. Awards are attention for the works you're creating, equating to more money. If some "better" award came along tomorrow which had the same implications, he'd be tracking those too.
deleted 10y ago
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kirykl 10y ago
Exactly. The purpose of process is to stabilize things enough to see where systemic improvements need to be made. Not to follow it blindly as a path to success.
x2f10 10y ago
I might be shunned for beating the dead horse, but while he talks about 'True Customer Obsession', he allows counterfeit goods erode his customer's trust in Amazon. I'd argue Amazon's 'process as proxy' in dealing with counterfeits is the careless return process. 'Oh, it's counterfeit? We're sorry! Here's your money back!' does not solve the issue. Sure, thanks for the $10 back, but now I must think twice (or thrice!) before ordering from Amazon. Once my Prime membership lapses, I will not renew. The 'process' for dealing with counterfeits is broken. When the customer has to think about "the chances of counterfeit" or dealing with the return of counterfeit products, it's NOT customer obsession. I respect Jeff, TONS, but come on. You're talking the talk, but you're not walking the walk.
- tryitnow 10y ago
  Exactly. I'm not going to cancel my Prime membership, but I do make it a habit of buying certain products on other sites now. Another pet peeve: product descriptions are frequently insufficient to inform a purchase decision. I recently had to resort to using jet.com for some under-the-sofa storage boxes and amazon just did not have sufficient product description detail to make me confident in the purchase. I am assuming they now this and figure that the costs of fixing this problem outweigh the benefits they'll experience from fixing it.
- nebabyte 10y ago
  Why would Amazon have an interest in dealing with counterfeits? It just primes the market for them moving in with their brand of the thing.
  - Androider 10y ago
    Because it used to be a no-brainer to buy things on Amazon, one click and done. Now I have to very carefully vet the listing before buying, inspect the product once received etc. Certain categories of items I would now never buy from Amazon in its current state (vitamins, fish oil etc.) Amazon has built a great reputation and trust with their customers, and they're going to lose it the way they're going.
ChuckMcM 10y ago
I wrote an email to Jeff suggesting that Day 2 might be started by losing control over what is sold in his shop. I really respect the way he thinks about the company and I have bought stock in it as a reflection of that respect. My hope is that he will be able to match 'focus on the customer' with 'don't sell the customer counterfeit or shoddy crap'. With their investment in Machine Learning one would hope they could train that engine to predict where crappy product is going to come from and reject it before it gets into the pipeline.
- TheRealDunkirk 10y ago
  There's a lot of talk about counterfeit goods in this discussion, but my problem is the amount of sellers selling the same thing, and using bad search terms to get their listing to the top, and generally making everything harder to find. Have you ever tried to search on something that doesn't have, like 3 or 4 really, really obvious market-leading options? And then sort by anything other than the default? It's impossible! God go with you if you ever sort by price, ascending! I've been a Prime member for several years, but the site has become so much less useful for me that I'm about to just let it lapse. I think it's creating opportunities for more-focused competitors, like Wayfair. I used to use NewEgg for electronics, but now they've started going the same route. I have to study every listing to make sure I'm getting it from a US warehouse, and not via a slow boat from China. I just ran into this today with a big-name monitor, even. I added 2 very-similar models to my cart, and went with the one that had free 2-day shipping. Why did the other one have free shipping, but took 5 days? I don't know! There was nothing about the listing that would have tipped me off that it was a non-Amazon retailer. I'm getting tired of playing this game.
  - ChuckMcM 10y ago
    I agree completely and in my opinion this is not a 'customer focused' way of doing business because the customer's are getting tired of fighting these fights. That was why in my email I called him out on this, and specifically said, "If you believe your highest priority is to focus on the customer, and losing sight of the customer is a precursor to Day 2, then you must address the quality of the shopping experience." I too have been a Prime customer for years, but 2 day shipping doesn't mean as much if its 2 days to delivery, then a trip to the post office to return it, and another 2 days to get the replacement, and then another week before your account is credited with the returned one. As an egregious example I bought a replacement cable modem and the one I got had a 'property of time-warner cable' sticker on it! And yet advertised as new. They replaced it quickly but really? Why should I have to be the person to sort the crap? And if that responsibility does fall to me, the customer, then Amazon is not sticking to their policy of putting the customer first. And I agree with Jeff in his letter, if he gets into Day 2, the company can ride it for a very long time into the sunset (just look at Sears!).
curiousDog 10y ago
Day 1, no processes, pedal to the metal are great for the business owner but suck for the proletariat. Contrast this to Google where for the most part Software engineers are happy to work.
- plandis 10y ago
  I'm a software engineer at Amazon and enjoy my job.
  - deleted 10y ago
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- deleted 10y ago
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bambax 10y ago
From then 1997 letter: > We established long-term relationships with many important strategic partners, including America Online, Yahoo!, Excite, Netscape, GeoCities, AltaVista, @Home, and Prodigy. Every single one of those partners either folded or fell into utter irrelevance. The only one surviving is Amazon itself. Don't know what to make of it, though.
zeteo 10y ago
Conspicuously missing are a couple of other ingredients of Amazon's success. There are plenty of companies out there with "customer obsession" and a "day 1" mentality. There are few others with such good investor relations that money keeps pouring in after two decades of paltry or negative earnings [1]. With this kind of "infinite runway" you can sometimes afford to lose $100 million over three months to drive a competitor out of the market [2]. You can also afford to negotiate sweetheart deals with UPS and FedEx that will offer you delivery rates and speeds available to few other companies [3]. [1] http://www.slate.com/blogs/moneybox/2013/01/29/amazon_q4_profits_fall_45_percent.html http://www.slate.com/blogs/moneybox/2013/01/29/amazon_q4_pro... [2] http://www.slate.com/blogs/future_tense/2013/10/10/amazon_book_how_jeff_bezos_went_thermonuclear_on_diapers_com.html http://www.slate.com/blogs/future_tense/2013/10/10/amazon_bo... [3] https://sellerengine.com/should-you-use-amazon-discounted-ups-shipping/ https://sellerengine.com/should-you-use-amazon-discounted-up...
- dkural 10y ago
  He didn't start out with that kind of size. He built it from nothing, with strong competitors like Walmart who had more volume for physical goods that could negotiate better deals with UPS and FedEx for years. AWS is beating Google, Microsoft, etc. Those companies had as much free cash flow and more engineering resources. He has good investor relations because he produces great returns. So, yes, your facts are correct, but you are wrong in an essential way: Investor goodwill and the market position is built by Day 1 mentality and customer obsession, not the other way around. A few bad moves will quickly erode both. Look at Blackberry, Dell, HP, Nokia, Westinghouse, Samsung etc. All these companies had massive market positions and investor confidence, with stock prices to match.
  - zeteo 10y ago
    And how do you account for survivor bias? I don't think the CEOs of Blackberry or Nokia would have agreed that they cared less about the customer than Jeff Bezos. "Customer obsession" is not actual, actionable advice because it's not even measurable. It's nice rhetoric, but other companies were judged on hard metrics of profits and dividends.
m3kw9 10y ago
All the counterfeit talk, what is out there that is less counterfeit and as convenient? Lets hear some fine alternatives
perseusprime11 10y ago
United can learn a thing or two from Jeff Bezos's annual letter about customer obsession. Trust your customers rather than treating them like idiots and with suspicion.
plcancel 10y ago
With Easter just around the corner, I thought he would've at least mentioned Day 3.
skrtskrt223 10y ago
As an employee of the amazon returns facility a lot of the issue is because of employee error, which is the lack of opening the box and making sure it is the right item being returned, part of the process is sending ot to liquidation to where it is sold at discount prices, warehouse deals sellable to where it becomes a sale although it has cosmetic issues, brand new sellable, and destroy. If they check the box and it is caught as being the wrong item, it is investigated on amazons part to see if it was a item sent back by mistake, an item that was sent out by mistake, or if the costumer is trying to pull a fast one. If it is the wrong item it is an easy fix as long as amazon sells the item that was returned.

547 points by djyaz1200 10y ago

"A common example is process as proxy. Good process serves you so you can serve customers. But if you’re not watchful, the process can become the thing. This can happen very easily in large organizations. The process becomes the proxy for the result you want. You stop looking at outcomes and just make sure you’re doing the process right. Gulp." Seems like this is exactly the kind of issue companies like United Airlines suffer from.

tyingq 10y ago
Amazon is guilty of this, not so much with customers, but with partners/sellers.
- eloisant 10y ago
  I don't think it's because they care too much of the process, but because they value consumers much more than sellers.
  - tyingq 10y ago
    I'm thinking, for example, how they dealt with the recent issues of counterfeit books. Their process did not help the seller or the customer.
dpark 10y ago
> It’s not that rare to hear a junior leader defend a bad outcome with something like, “Well, we followed the process.” - Bezos > We sought volunteers and then followed our involuntary denial of boarding process - Munoz Ouch
- TheGRS 10y ago
  Yea, I'm not going to share which airline or which branch (other than to say it wasn't United or Chicago), but I have a relative who works at a pretty high position in one of them and they were, to my great surprise, in defense of United and the police in that episode earlier this week. Statements like "airlines bump people all the time", "they can't offer anymore than what they did, its a set rule", and "if they just complied none of this would have happened, its a crime to disagree with flight crew" kept coming up. This is the mentality that permeates the airline industry and is what lead to that episode. They don't put satisfying the customer above following the rules. Its also why no one who has flown much was particularly surprised it happened in the first place.
  - positivejam 10y ago
    Re: the notion that "airlines bump people all the time", there are those arguing that while it is indeed lawful and routine for airlines to bump passengers due to overbooking, this was not a case of overbooking, and once a passenger has taken their seat they have very different rights than when they are still waiting to board the plane. I am by no means an expert, but I found this article (posted on HN yesterday) to be illuminating: http://www.nakedcapitalism.com/2017/04/united-passenger-removal-reporting-management-fail.html http://www.nakedcapitalism.com/2017/04/united-passenger-remo... Basically, this wasn't just poor customer service, it was a violation of rules.
    - TheGRS 10y ago
      As I understand it they followed the procedures and rules just as they are defined and in the law. Had the guy willfully gotten out of his seat he would have been compensated the "involuntary bumping" rate that is set by the Dept of Transportation. But the fact that United got to that point is the problem. They had the option to offer more money for volunteers, they even had the option to find a different flight for their employees, or maybe send them on a cab ride instead (one passenger in the video even pointed this out while it was happening). Of course, the excessive use of force is on the police and they should be the ones outside of the law on this one, I don't believe being loud in that situation warrants you get a concussion, that's just wrong.
smokeyj 10y ago
This is how I feel about our democratic process. The process is you pick one of two parties. Then you get into a face bloodying fight with the other party. Nothing gets done, then you pat yourself on the back for doing your part. When you come to the realization that nothing has been accomplished, you blame those who didn't participate in the brawl. Suggesting that people work ON the process rather than IN the process will get you looks as if you've just insulted their religion.
- smokeyj 10y ago
  This comment seems to be well received based on the points. I think about this often and it drives me nuts that the two party system is the best we have. It's like we're trying to optimize an operating system at every level EXCEPT THE KERNEL. Suggesting that you don't buy into the two party system is met with skepticism, as if you're a closet supporter of one party. Or worse, that by not supporting a party you're implicitly siding with "the other side" (You know, because we're on different teams). "You're either with us or against us!!'. Can someone just make a p2p party already? Any billionaire in SV could bankroll this project with their weekend funny money. I'd be willing to donate development hours. I'm just wondering if people would be willing to venture out of their comfort zone and "throw away their vote" for something that isn't mainstream.
  - dangero 10y ago
    Without runoff elections its always going to veer towards a two party system. It would work if we did two votes: vote first for who you want, then second vote for the best choice from top two.
    - smokeyj 10y ago
      Which leads to the next question. Why are we voting for a human at all? If members of an organization want a resolution passed anyone should be able to propose it - and if the magic threshold is met - then whala - the resolution is law. I want to be able to vote everyday. I want to be able to pick who I want to represent my vote - and change it at will. I want to be able to pick Bill Gates to represent me on technology issues, and Sal Khan to represent me on education. Government is just an organization, and an organization is a network. We should be using computer science terms to describe how we want this network to operate in terms of resolution, latency, redundancy, centralization/decentralization, upgrade protocls, failovers, and so on. What I'm trying to say is.. Let's purge the politicians and put the people in charge.
hinkley 10y ago
tl;dr: the map is not the territory This problem is pretty much every company I've ever worked for if/when they got over six engineers. I spend more time and a hell of a lot more energy than I should trying to keep managers or easily enthused engineers from hugging the project to death. I ended up becoming a process expert out of a sense of self preservation. I use process a lot, but it's always in support of the 'why's. I don't always talk about the 5 Whys but it's always there, and in my experience the people who are usually the problem can't ever manage more than three. The worst of these are also the sort of people who, if your speedometer was broken, would insist that the car is not moving. Even after you told them to look out the window.
- Retric 10y ago
  Your trying to solve the wrong problem, it's generally a people problem not a process problem.
  - deleted 10y ago
    [deleted]
  - hinkley 10y ago
    The people problem is that everyone has the instinct to solve problems with rules, but not the energy or interest to do it properly. If you don't try to steer the conversation toward reversible decisions AND avoid trivialities then you spend your problem solving budget on actively harmful plans.
- fbonetti 10y ago
  > The worst of these are also the sort of people who, if your speedometer was broken, would insist that the car is not moving. Even after you told them to look out the window. That's an amazing quote. I'm totally stealing this.
partisan 10y ago
Whenever a junior team member comes to me for help, the first question I ask is, "what are we trying to accomplish". Unfortunately, we have a tendency to lose sight of purpose when going through process. Discussions usually start with what they have tried and what they are doing, but when the question of purpose is asked, it's easier to see the steps to get the result.
fbonetti 10y ago
This is a surprisingly common trap to fall into. I worked at a startup in which the CTO criticized my dev team for not having a perfectly linear burn down chart. Every week in our retro we had the same discussion about how to improve the shape of our burn down chart; we tried putting higher valued stories at the front of the queue, involving QA earlier in the sprint, and cranking out 1 pointers mid week to tweak the graph. We rarely achieved the perfect shape. On top of this we also had one week sprints, which made it difficult to plan for the future or work on spikes, so we ended up doing very little high-level, architectural planning. I remember one week my team cranked through their allotted stories so fast that we ran out of work two or three days into the sprint. We decided to take on a couple extra easy stories that we knew we could finish before the end of the week. Rather than being praised for doing extra work, we were criticized for "introducing volatility into the sprint". In other words, we messed up the shape of the burn down chart. I'm currently working at a place that has virtually no process, which has it's own challenges, but I'm happy that I'm not arguing about burn down charts anymore :)
- wjamesg 10y ago
  Burn down chart?
  - zer0tonin 10y ago
    Nice excel graph with the number of "points" burned each sprints.
  - fjdlwlv 10y ago
    It's a project management strategy named for how it makes you want to burn down the office.
  - fbonetti 10y ago
    It's a common metric used in the Scrum methodology. You start off the "sprint" with a set number of "story points" (say, 30 points), and end the sprint with zero points. When you graph the team's progress over the course of the sprint, it should ideally form a linear, downward slope. https://en.wikipedia.org/wiki/Burn_down_chart https://en.wikipedia.org/wiki/Burn_down_chart
ryandrake 10y ago
Reminds me of that Steve Jobs quote about IBM: “People get confused; companies get confused. When they start getting bigger, they want to replicate their initial success. And a lot of them think, ‘Well, somehow, there’s some magic in the process of how that success was created.’ So they start to institutionalize process across the company. And before very long, people start to get confused that the process is the content."
cowardlydragon 10y ago
Step 1 is the ticket wall.
mahyarm 10y ago
Netflix also talks about it themselves: https://www.slideshare.net/reed2001/culture-1798664/49-Process_Emerges_to_Stop_the https://www.slideshare.net/reed2001/culture-1798664/49-Proce...

smaddali 10y ago

I particularly like the concept of 'Day 1'. No matter what stage you are in as a business or individual, it is still day 1 for rest of your life. Taking long term view , keeping where you want to go in focus is really important.

chrismealy 10y ago
I always thought "it's day one" sounded like something a man says to his wife after he's been caught having an affair.
- degenerate 10y ago
  No, that is called judgement day

dirtyaura 10y ago

Earlier thread about the letter https://news.ycombinator.com/item?id=14103818 https://news.ycombinator.com/item?id=14103818

sb8244 10y ago

I often say that we don't need to agree, just commit together. I particularly like disagree and commit better. It seems like it would shorten time to decision as long as no one takes it personally.

Qworg 10y ago
I really like "disagree and commit" but I'm worried how well it would work in most corporations. I think it requires incredible alignment amongst the decision makers about the goals of the project - something that is in short supply.
- hinkley 10y ago
  I had a boss who thought he liked that idea but every meeting turned into an extra fifteen minutes of him badgering me for agreeing to disagree with plans that often blew up later. Sitting through the what went wrong meetings was an exercise in patience that I often lost. I have no doubt at all that he would label me as a toxic employee, and was not surprised at all to be in the first round of layoffs (worked out for me, I got 27 paychecks that year and a three week vacation), but most of that would be him projecting his issues onto me. He wanted to be a good manager but was so emotionally challenged by estimates not actually being blood oaths that it twisted every planning meeting into something ugly.
- sb8244 10y ago
  We put a strong foundation of trust and knowing the other person has the best intentions. I don't think it would work without strong trust across the organization and especially up and down the chain.
- leggomylibro 10y ago
  It sounds like he realizes that too, with his comments towards the end of the letter: "Fourth, recognize true misalignment issues early and escalate them immediately. Sometimes teams have different objectives and fundamentally different views. They are not aligned. No amount of discussion, no number of meetings will resolve that deep misalignment. Without escalation, the default dispute resolution mechanism for this scenario is exhaustion. Whoever has more stamina carries the decision."

jtraffic 10y ago

Does this come across as oddly inconsistent to anyone else? "These big trends are not that hard to spot (they get talked and written about a lot), but they can be strangely hard for large organizations to embrace. We’re in the middle of an obvious one right now: machine learning and artificial intelligence." "Another example: market research and customer surveys can become proxies for customers – something that’s especially dangerous when you’re inventing and designing products. 'Fifty-five percent of beta testers report being satisfied with this feature. That is up from 47% in the first survey.' That’s hard to interpret and could unintentionally mislead." What about ML as a proxy for customers?

meow_mix 10y ago
Depends on how ML is used. ML is much more than gaging customer satisfaction

OoTheNigerian 10y ago

This paragraph from his first letter to shareholders best illustrates how far Amazon has come. "We established long-term relationships elationships with many important strategic partners, including America Online, Yahoo!, Excite, Netscape, GeoCities, AltaVista, @Home, and Prodigy."

joshaidan 10y ago

I encountered "process as proxy" today dealing with Cisco. We were requesting a replacement for a defective part, they asked us for our serial number, which we provided, but then responded to us that our serial number was invalid. Likely because it wasn't registered. We were told that we had to contact our sales manager, or open a TAC with a different department because they department only deals with technical issues. Could they not have done something to help us, maybe forwarding the ticket to the department that could register the serial number, to help us rather than just leaving us stranded? It's as though they want to follow process rather than helping the customer.

broknbottle 10y ago
What was the part? They've moved to putting SN on everything, main board, chassis, etc. Make sure you have the correct SN. That being said Cisco TAC is atrocious.
theptip 10y ago
Devil's advocate -- there's a big grey market in Cisco parts, and so they are probably under strict instruction to refuse support service to anyone who isn't verified as a paying customer.
Cacti 10y ago
Blame Cisco for wanting to squeeze out every penny from their support costs at the expense of their customers. Most of this stuff is outsourced or structured in such a way that they try to reduce ticket time and increase tickets worked (because time = labor = money). But guess what's free in this equation? Your time. The vast majority of cost savings I see in the corporate world is like this; they're not saving money by doing a better, more clever job, they're just externalizing their costs elsewhere, whether it's another industry, another company, or another team in the same company.
alyandon 10y ago
I had a similar experience with digital ocean. I reported malicious traffic coming from another customer's VM via a ticket, provided logs, etc and their response was that I needed to submit all that information via email at their abuse email address instead. I responded that perhaps as a customer they shouldn't make me waste more of my time and instead forward the information that I had provided to their abuse department. Of course, they never responded after that. I'll never bother to report a security incident to them again. All because of "process". :-/

AndrewKemendo 10y ago

You have to admire the grit and tenacity it takes to maintain that kind of ethos for 23 years straight. What Jeff is basically saying here in this letter is that the pedal is to the metal, forever: We can't have process as the foundation because it ossifies the organization! Be nimble to the rules of the game. When translated however, that means you are either empowering your organization to change and make new processes at scale and speed, or you have whatever the default process of solving problems from scratch each time. It's the anarchist's dilemma. That is a tough organization to live under if you aren't built for that, and one that only a certain type of people can thrive in. I mean the majority of people, leaders even, when they get to some level of success will put the brakes on and coast, doing exactly the things Jeff describes: building processes to take the cognitive load off of decision making and making life just slightly easier. They build processes for "efficiency", so that they don't have to go back and do all the hard work of understanding the problem from scratch each time. The problem though, as Jeff points out is that "The process" becomes an 80% solution to 80% of the problems it's applied to (leading to 36% failure rate). So just think about how you could - for 23 straight years - recruit, retain and develop a cadre of managers, engineers, interns, staffers etc... that in the majority of cases fall into the mindset of constantly sprinting - basically an Olympic marathoner running a 5 min mile marathon. As a leader I admire that ability.

devopsproject 10y ago
By almost every account, Amazon is terrible place to work: https://www.nytimes.com/2015/08/16/technology/inside-amazon-wrestling-big-ideas-in-a-bruising-workplace.html?smid=tw-share&_r=1 https://www.nytimes.com/2015/08/16/technology/inside-amazon-... This isn't the type of leader you want to be.
- ChicagoBoy11 10y ago
  Yet by every account that mattters it doesn't, right? I understand that people who are there can certainly wish that the place and culture were different in some significant way, but the only barometer that should have some weight is the ease or difficulty that Amazon has in attracting and retaining top talent -- and that to the extent that it is harming their ability to deliver results. Which, from the outside, it certainly doesn't seem to be limiting. The counterargument is that of course the things which makes Amazon's work culture toxic to people are orthogonal to their success and not a cause of it. My former boss was very well aware that she could sometimes be downright mean and nasty to our staff, and I cringed every time she justified it by citing what people thought the same of Steve Jobs: While true, we can't avoid the fundamental problem of causal inference, and there is no saying that had Jeff been actively striving to make a more welcoming culture, or if Steve or my former boss were nice people, that they wouldn't have experienced even greater success.

Gormisdomai 10y ago

Reposting this thought from the other discussion[0]: >Third, use the phrase “disagree and commit.” This phrase will save a lot of time. If you have conviction on a particular direction even though there’s no consensus, it’s helpful to say, “Look, I know we disagree on this but will you gamble with me on it? Disagree and commit?” By the time you’re at this point, no one can know the answer for sure, and you’ll probably get a quick yes. This sounds really powerful but also like it might be open to abuse (for example degenerating into passive agressiveness/half commitment). Does anyone use something similar in their own workplace? Does it work? [0]: https://news.ycombinator.com/item?id=14103818 https://news.ycombinator.com/item?id=14103818

sb8244 10y ago
Commented on linked comment. I think it boils down to a strong trust base where everyone has the best intentions in mind
peripitea 10y ago
I worked at Amazon for almost five years. Like every leadership principle, this one was easily perverted. Many people I worked with took this to heart, and among peers there was often an honorable sense of "OK, I will disagree and commit on this one". But I also spent a few years in an org where I don't think I ever saw someone more senior disagree and commit to the opinion of someone more junior. At each level of the hierarchy it was used as a way to excuse "you will do what I say". That's fine if it happens once or twice, but laughable if it's always flowing in one direction. The other leadership principles were perverted in similar ways. You wouldn't believe the range of things I saw justified as "customer obsession".
- foobarqux 10y ago
  > You wouldn't believe the range of things I saw justified as "customer obsession". I would like to hear some of them if you have the time and inclination.
  - peripitea 10y ago

avar 10y ago

Odd to see Bezos cite number of Oscars & Emmies as a measure of competence, as opposed to revenue. A lot of movies that win awards aren't particularly good investments.

arikr 10y ago
I imagine it's a marketing tactic to accelerate the flywheel he cares about: more awards -> more talent that wants to write/sell to Amazon Studios -> more exclusive shows -> more customers -> more awards
nebabyte 10y ago
Why would that matter to him as a businessman. Awards are attention for the works you're creating, equating to more money. If some "better" award came along tomorrow which had the same implications, he'd be tracking those too.

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kirykl 10y ago

Exactly. The purpose of process is to stabilize things enough to see where systemic improvements need to be made. Not to follow it blindly as a path to success.

x2f10 10y ago

I might be shunned for beating the dead horse, but while he talks about 'True Customer Obsession', he allows counterfeit goods erode his customer's trust in Amazon. I'd argue Amazon's 'process as proxy' in dealing with counterfeits is the careless return process. 'Oh, it's counterfeit? We're sorry! Here's your money back!' does not solve the issue. Sure, thanks for the $10 back, but now I must think twice (or thrice!) before ordering from Amazon. Once my Prime membership lapses, I will not renew. The 'process' for dealing with counterfeits is broken. When the customer has to think about "the chances of counterfeit" or dealing with the return of counterfeit products, it's NOT customer obsession. I respect Jeff, TONS, but come on. You're talking the talk, but you're not walking the walk.

tryitnow 10y ago
Exactly. I'm not going to cancel my Prime membership, but I do make it a habit of buying certain products on other sites now. Another pet peeve: product descriptions are frequently insufficient to inform a purchase decision. I recently had to resort to using jet.com for some under-the-sofa storage boxes and amazon just did not have sufficient product description detail to make me confident in the purchase. I am assuming they now this and figure that the costs of fixing this problem outweigh the benefits they'll experience from fixing it.
nebabyte 10y ago
Why would Amazon have an interest in dealing with counterfeits? It just primes the market for them moving in with their brand of the thing.
- Androider 10y ago
  Because it used to be a no-brainer to buy things on Amazon, one click and done. Now I have to very carefully vet the listing before buying, inspect the product once received etc. Certain categories of items I would now never buy from Amazon in its current state (vitamins, fish oil etc.) Amazon has built a great reputation and trust with their customers, and they're going to lose it the way they're going.

ChuckMcM 10y ago

I wrote an email to Jeff suggesting that Day 2 might be started by losing control over what is sold in his shop. I really respect the way he thinks about the company and I have bought stock in it as a reflection of that respect. My hope is that he will be able to match 'focus on the customer' with 'don't sell the customer counterfeit or shoddy crap'. With their investment in Machine Learning one would hope they could train that engine to predict where crappy product is going to come from and reject it before it gets into the pipeline.

TheRealDunkirk 10y ago
There's a lot of talk about counterfeit goods in this discussion, but my problem is the amount of sellers selling the same thing, and using bad search terms to get their listing to the top, and generally making everything harder to find. Have you ever tried to search on something that doesn't have, like 3 or 4 really, really obvious market-leading options? And then sort by anything other than the default? It's impossible! God go with you if you ever sort by price, ascending! I've been a Prime member for several years, but the site has become so much less useful for me that I'm about to just let it lapse. I think it's creating opportunities for more-focused competitors, like Wayfair. I used to use NewEgg for electronics, but now they've started going the same route. I have to study every listing to make sure I'm getting it from a US warehouse, and not via a slow boat from China. I just ran into this today with a big-name monitor, even. I added 2 very-similar models to my cart, and went with the one that had free 2-day shipping. Why did the other one have free shipping, but took 5 days? I don't know! There was nothing about the listing that would have tipped me off that it was a non-Amazon retailer. I'm getting tired of playing this game.
- ChuckMcM 10y ago
  I agree completely and in my opinion this is not a 'customer focused' way of doing business because the customer's are getting tired of fighting these fights. That was why in my email I called him out on this, and specifically said, "If you believe your highest priority is to focus on the customer, and losing sight of the customer is a precursor to Day 2, then you must address the quality of the shopping experience." I too have been a Prime customer for years, but 2 day shipping doesn't mean as much if its 2 days to delivery, then a trip to the post office to return it, and another 2 days to get the replacement, and then another week before your account is credited with the returned one. As an egregious example I bought a replacement cable modem and the one I got had a 'property of time-warner cable' sticker on it! And yet advertised as new. They replaced it quickly but really? Why should I have to be the person to sort the crap? And if that responsibility does fall to me, the customer, then Amazon is not sticking to their policy of putting the customer first. And I agree with Jeff in his letter, if he gets into Day 2, the company can ride it for a very long time into the sunset (just look at Sears!).

curiousDog 10y ago

Day 1, no processes, pedal to the metal are great for the business owner but suck for the proletariat. Contrast this to Google where for the most part Software engineers are happy to work.

plandis 10y ago
I'm a software engineer at Amazon and enjoy my job.
- deleted 10y ago
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bambax 10y ago

From then 1997 letter: > We established long-term relationships with many important strategic partners, including America Online, Yahoo!, Excite, Netscape, GeoCities, AltaVista, @Home, and Prodigy. Every single one of those partners either folded or fell into utter irrelevance. The only one surviving is Amazon itself. Don't know what to make of it, though.

zeteo 10y ago

Conspicuously missing are a couple of other ingredients of Amazon's success. There are plenty of companies out there with "customer obsession" and a "day 1" mentality. There are few others with such good investor relations that money keeps pouring in after two decades of paltry or negative earnings [1]. With this kind of "infinite runway" you can sometimes afford to lose $100 million over three months to drive a competitor out of the market [2]. You can also afford to negotiate sweetheart deals with UPS and FedEx that will offer you delivery rates and speeds available to few other companies [3]. [1] http://www.slate.com/blogs/moneybox/2013/01/29/amazon_q4_profits_fall_45_percent.html http://www.slate.com/blogs/moneybox/2013/01/29/amazon_q4_pro... [2] http://www.slate.com/blogs/future_tense/2013/10/10/amazon_book_how_jeff_bezos_went_thermonuclear_on_diapers_com.html http://www.slate.com/blogs/future_tense/2013/10/10/amazon_bo... [3] https://sellerengine.com/should-you-use-amazon-discounted-ups-shipping/ https://sellerengine.com/should-you-use-amazon-discounted-up...

dkural 10y ago
He didn't start out with that kind of size. He built it from nothing, with strong competitors like Walmart who had more volume for physical goods that could negotiate better deals with UPS and FedEx for years. AWS is beating Google, Microsoft, etc. Those companies had as much free cash flow and more engineering resources. He has good investor relations because he produces great returns. So, yes, your facts are correct, but you are wrong in an essential way: Investor goodwill and the market position is built by Day 1 mentality and customer obsession, not the other way around. A few bad moves will quickly erode both. Look at Blackberry, Dell, HP, Nokia, Westinghouse, Samsung etc. All these companies had massive market positions and investor confidence, with stock prices to match.
- zeteo 10y ago
  And how do you account for survivor bias? I don't think the CEOs of Blackberry or Nokia would have agreed that they cared less about the customer than Jeff Bezos. "Customer obsession" is not actual, actionable advice because it's not even measurable. It's nice rhetoric, but other companies were judged on hard metrics of profits and dividends.

m3kw9 10y ago

All the counterfeit talk, what is out there that is less counterfeit and as convenient? Lets hear some fine alternatives

perseusprime11 10y ago

United can learn a thing or two from Jeff Bezos's annual letter about customer obsession. Trust your customers rather than treating them like idiots and with suspicion.

plcancel 10y ago

With Easter just around the corner, I thought he would've at least mentioned Day 3.

skrtskrt223 10y ago

As an employee of the amazon returns facility a lot of the issue is because of employee error, which is the lack of opening the box and making sure it is the right item being returned, part of the process is sending ot to liquidation to where it is sold at discount prices, warehouse deals sellable to where it becomes a sale although it has cosmetic issues, brand new sellable, and destroy. If they check the box and it is caught as being the wrong item, it is investigated on amazons part to see if it was a item sent back by mistake, an item that was sent out by mistake, or if the costumer is trying to pull a fast one. If it is the wrong item it is an easy fix as long as amazon sells the item that was returned.