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Amazon's empire rests on its low-key approach to AI
- mi100hael 8y ago> AMAZON’S SIX-PAGE memos are famous. Executives must write one every year, laying out their business plan. Less well known is that these missives must always answer one question in particular: how are you planning to use machine learning? Responses like “not much” are, according to Amazon managers, discouraged. I think company culture & talent make a big difference here. At most companies this would run the risk of poorly shoe-horning ML into a bunch of applications and making everything needlessly complex & expensive without seeing improved results (same goes for blockchain).
- b_tterc_p 8y agoCan anyone at amazon comment on whether this actually works? Edit: the ai part specifically.
- dodobirdlord 8y agoFrom what I have seen 6-pager process and more importantly the clear writing and efficient meetings that it fosters are pretty helpful. It's important to note that a 6-pager contains 6 pages of expected reading and can have as much additional appendix material as you want. I've seen "6-pager" documents that were dozens of pages long, and have heard possibly apocryphal stories of 6-pagers hundreds of pages long for major projects. If the question was specifically about AI being a required component, idk. But a VP at Amazon presides over a part of the business so large that it is implausible that there aren't useful applications for AI in their domain.
- varelse 8y agoThe ideal of the 6-pager is magnificent. The reality of the 6-pager in 2019 is that it has become boilerplate where style overwhelms substance. Similar things can be said of their OP1 and OP3 planning processes that are becoming increasingly cargo cult IMO. And that arises naturally from a static game whose most experienced players have become better at funding projects than they are at funding better projects. Though very late to the party (modulo Alexa), Amazon has eagerly embraced AI and machine learning since 2015, but it lacks the leadership for formulating clear targets (see AutoML and AlphaGo Zero as examples of clear targets IMO). A recent article in _The Information_ made the claim that their entire AI organization is making <$20M annually. That is consistent with what I saw there: an effectively infinite number of codemonkeys throwing unprocessed data at randomly chosen AI algorithms downloaded off of github and hoping for the best. It's an interesting experiment, but it seems to be about as efficient as a monkey throwing darts to pick stocks (which is surprisingly better than many biased investment advisors admittedly). Time will tell, no? https://www.theinformation.com/articles/demand-soaring-for-amazon-ai-services-not-so-fast https://www.theinformation.com/articles/demand-soaring-for-a...?
- erikpukinskis 8y agoThey need a 6-pager czar who has the power to send back to editing any paper that's not readable enough.
- varelse 8y agoThat just pushes the problem one level down on the stack, no? Or who sends back the work of the 6-pager Czar? IMO they need to refresh the process, and refresh it frequently. I don't see them doing that though. Similar things have happened with the well-intentioned "bar-raiser" process as well IMO. I had bar-raisers in interview loops for my team who seemed more intent in blocking potential competitors to their niche than in hiring the best people, which was the whole point of said "bar-raising."
- erikpukinskis 8y agoNo, distributed responsibility is qualitatively different from a single responsible party.
- kevin_thibedeau 8y agoThey just need an AI to review for sub-optimal 6-page reports. First cut can be built off of mechanical turk.
- gregdunn 8y ago> The reality of the 6-pager in 2019 is that it has become boilerplate where style overwhelms substance. I can't say I agree. I'm in the middle of a 6-pager, and the overwhelming majority of feedback/comments from people I've asked to review it have been very specific to making sure there IS substance. Tons of 'This is unclear. Need extra details and specifics', 'Why is this the case?', and so on. Plenty of grammar/style feedback as well, but the whole point is attention to detail.
- otterley 8y ago> The reality of the 6-pager in 2019 is that it has become boilerplate where style overwhelms substance. I think this varies by team. In my experience thus far, I've been receiving lots of feedback -- often actionable -- to improve my own narratives. If your reviewers aren't pushing back on you when your paper lacks the required substance, that definitely needs to be addressed. > OP1 and OP3 planning processes that are becoming increasingly cargo cult IMO Businesses need operating plans to determine prioritization and funding. What's the problem with them, exactly?
- THE_PUN_STOPS 8y agoAs an Amazonian far flung from AWS, (I am in ground level fulfillment) I have seen some incredible internal AZ programs that utilize ML in unexpected areas to save the company lots of money. So I'm going with yes.
- beastcoast 8y agoThe article overstates the use of ML at least in fulfillment we use a lot of math models (eg xpress solver) and optimization algorithms (traveling salesmen type problems) but not so much in the ML space.
- mabbo 8y agoMy team does ML in Fulfillment. Search my username on phone tool to figure out my team.
- east2west 8y agoUsually optimization takes forecasts as part of inputs. It is actually a lot like reinforcement learning, where the sales forecasts are part of the environment. This is standard process for supply-chain management, not just retail industry or at Amazon.
- Nelson69 8y agoI have never worked for Amazon so I'm just speculating but if you have a culture of being data driven, specifically in the ways you optimize things then I'm guessing you'll probably be pretty successful and it's not a giant leap to plugging that data in to some ML models or something. To plug that stuff in the some ML models requires an entire culture of data collection and some thought as to how you'd improve or benefit from it; it's sort of like the "no brown M&Ms" rider that Van Hallen used to have.
- maxxxxx 8y agoThere is also the story of Amazon mandating that all internal systems communicate with each other through APIs. I think leadership at Amazon has good technical knowledge so they can develop these strategies and see them through. In my company nobody with a "C*O" title (including CIO and CTO) has any clue about tech so they are very susceptible to snake oil salesmen telling them things like "we must do ML". So they tell some random person to "implement AI" but nobody has any clear objectives or can make a judgement whether things go in the right direction. In most cases these things end up as expensive disasters. I am waiting for the "Blockchain Excellence Initiative" with a lot of presentations and shiny newsletters.
- omarchowdhury 8y agoHow can someone become a CTO without having any clue about tech?
- rogerkirkness 8y agoIn a big enough company where software isn't the product that just means they know the tech that applies to that company. The CIO is probably a fearful late career IT politician and the CTO could have spent 40 years progressively learning more about washing machines or planes.
- maxxxxx 8y agoThat's pretty much it. There is also a widespread belief that software development is "IT" which means that an initiative to implement cloud systems gets led by people who have experience with desktop deployments or firewall setup. There is a lot of politics around budgets so the IT department won't let go of that power.
- pdelgallego 8y agoI read in Werners Vogels blog (amazon CTO), that there are four types of CTOs [1] based on Berray and Sampath paper. [2] * Infrastructure Manager * Technology Visionary and Operations Manager * External Facing Technologist * Big Thinker [1] https://www.allthingsdistributed.com/2007/07/the_different_cto_roles.html https://www.allthingsdistributed.com/2007/07/the_different_c... [2] http://www.brixtonspa.com/Career/The_Role_of_the_CTO_4Models.pdf http://www.brixtonspa.com/Career/The_Role_of_the_CTO_4Models...
- joe_the_user 8y agoAt most companies this would run the risk of poorly shoe-horning ML into a bunch of applications and making everything needlessly complex & expensive without seeing improved results (same goes for blockchain). Sure, and in Amazon, you get a few tweaks that get the company a few bucks. It suspect the article wildly overstates the value of ML to Amazon. Amazon's success seems to rest on: A. Attracting enough capital to get huge and stay huge with generally low margins. B. Being willing to slide into related businesses for extra-profits. C. Not jumping into one or another dumb trendy investments that would burn up all the capital they get from A & B. Well, the memos might help B & C, for all I know. Ten years ago, Amazon and Ebay split the ecommerce/storefront world. Ebay never managed to make themselves fully consumer friendly with hard guarantees and Amazon did. The auction-based, at-your-own-risk world is inherently limited and Ebay never escaped that - I wish they had 'cause then Amazon would have had real competition.
- natalyarostova 8y agoWal-mart is real competition.
- frontloadpro 8y agoWalmart Online is cheaper than Amazon. Ive started making the switch.
- joe_the_user 8y agoAmazon now is something like a fusion of Ebay and Walmart. Either of those enterprises (or Target or etc) could move into the full space that Amazon operates in, it seems like. Edit: I suspect that what keeps an enterprise like Walmart or Costco from jumping into full competition with Amazon is that each of these enterprises wants to fish some high profit zone of the eComerce ocean while Amazon wants to be the ocean.
- erikpukinskis 8y agoI was curious how the Amazon/eBay split looks revenue-wise.... Not exactly apples-to-apples but in 2018 Amazon was $180B in net sales vs eBay $95B GMV. So Amazon is more than double but maybe not 10x? Amazon GMV is supposedly in the $250B range but they don't report it. And it's obviously hard to compare such different business models.
- agentofoblivion 8y agoThis year, our internal ML conference ran out of tickets within 90 minutes of opening registration. There is a whole helluva lot of ML research and applications going on.
- akhilcacharya 8y agoTell me about it! - sincerely, someone that didn’t register in time
- victor106 8y agoAnyone has a link to the full article?
- jonawesomegreen 8y agohttps://outline.com/34PN5W https://outline.com/34PN5W
- dymk 8y ago"Screw ad supported services, if only they provided a way to pay for their content, then I would totally just do that" -- HN
- disgruntledphd2 8y agoIt adds up fast. I spend 100 euro on all my news subscriptions (and i still don't have the NYT or the WP). I can totally appreciate that others may not subscribe as much, or to the same set of services. Spotify for news would be super good, though.
- dna_polymerase 8y ago> Spotify for news would be super good, though. Apple News+ [0] [0]: https://support.apple.com/en-us/HT209513 https://support.apple.com/en-us/HT209513
- disgruntledphd2 7y agoYeah, I appreciate the thought, but I have no intention of getting invested in the Apple ecosystem.
- mxwsn 8y agohttps://outline.com/34PN5W https://outline.com/34PN5W
- hellllllllooo 8y agoI thought Amazon's empire rests on AWS which actually funds the company allowing them to make a sustained loss on their retail business despite attempts to automate with robotics and ML.
- donarb 8y agoAWS is now pushing Alexa for Business, which I assume is a corporate wide AI product along similar lines as IBM's Watson.
- ajkjk 8y agoIt's basically the opposite? The retail business funds all the other projects. That's starting to shift, but only recently.
- hellllllllooo 8y agohttps://www.fool.com/investing/2019/04/07/how-amazon-costco-and-alphabet-really-make-their-m.aspx https://www.fool.com/investing/2019/04/07/how-amazon-costco-... https://www.businessinsider.com/amazon-web-services-cloud-online-shopping-profits-chart-2017-5 https://www.businessinsider.com/amazon-web-services-cloud-on... AWS makes all the money, everything else is marginal. > Amazon Web Services, which accounted for about 89% of Amazon's $1 billion total operating profit this past quarter. That's despite AWS accounting for just 10% of the company's overall revenue during the same time frame. > But despite all of this, Amazon generates just a fraction of its net earnings from e-commerce. Instead, Amazon's bread and butter is its cloud computing segment, Amazon Web Services (AWS).
- gergi 8y agoNo, it's the opposite.
- hellllllllooo 8y agohttps://www.fool.com/investing/2019/04/07/how-amazon-costco-and-alphabet-really-make-their-m.aspx https://www.fool.com/investing/2019/04/07/how-amazon-costco-... https://www.businessinsider.com/amazon-web-services-cloud-online-shopping-profits-chart-2017-5 https://www.businessinsider.com/amazon-web-services-cloud-on... AWS makes all the money, everything else is marginal. > Amazon Web Services, which accounted for about 89% of Amazon's $1 billion total operating profit this past quarter. That's despite AWS accounting for just 10% of the company's overall revenue during the same time frame. > But despite all of this, Amazon generates just a fraction of its net earnings from e-commerce. Instead, Amazon's bread and butter is its cloud computing segment, Amazon Web Services (AWS).
- gordon_freeman 8y agoI think a lot of people just don't realize that Machine Learning can be as simple as a linear regression with 2 variables. The hype and myth around ML are such that some employers just assume that they need to hire rockstar data scientists to do ML but in reality, a junior level data analyst or even a non-technical employee can do simple ML model in Excel spreadsheet assuming he/she has some background in Stats 101.
- steve19 8y agoYes but that is the easy part. The hard part is knowing what can be solved with ML, gathering the training data, validating the model and then explaining what the model does. Acually fitting the model is not the hard part. But yes, not all ML is deep learning and most ML problems should NOT use deep learning.
- enraged_camel 8y ago>>The hard part is knowing what can be solved with ML I’d say THIS is the hardest part by far. It requires a very rare mix of business domain expertise and technical knowledge with regards to ML/DL.
- mr_toad 8y ago> Acually fitting the model is not the hard part. Ideally you shouldn’t be fitting the model yourself. The idea behind ML is to use brute force computation. If you’re fitting the model by hand, you’re a Statistician.
- secabeen 8y agoAmazon is also pushing hard on gathering data. They've offered free photo storage for prime users for some time; earlier this week, they offered me a $15 gift card just to install and setup auto-upload of pictures from my cell phone.
- east2west 8y agoI guess this is making a virtue out of necessity. Amazon is clearly behind other tech companies in deep learning, so they are calling it "low-key." I used to work on the retail side, and their prediction process is pretty bland. They use an off-the-shelf neural networks, but they don't know how to do modeling, so forecasts are inconsistent. I am sure they will try to incrementally solve the problem, but proper modeling is foundational to predictions so I think it will be a long time before it is resolved. Like I said, it is about average in industry.
- BrandonWatson 8y agoI ran Kindle software Product Management for 3 years. Left in 2014 AMA about the memo process or OP1/OP2 process.
- waldohatesyou 8y agoDid you ever feel like it was a waste of time or do you feel it genuinely added value to the company to engage in that exercise
- waldohatesyou 8y agoDid you ever feel like it was a waste of time or do you feel it genuinely added value to the company to engage in that exercise?
- waldohatesyou 8y agoSorry for the double post, accidentally hit reply twice on mobile client.
- jessriedel 8y agoYou can delete the comment within the first two hours, I think. Certainly can be edited.
- BrandonWatson 8y agoGenuinely added value. I was firmly in the "NO" camp when I got to AMZN. Writing was something that people who didn't understand hustle did. :) What I found, over time, was that the exercise of writing forces critical thinking. PowerPoint is corporate theater. Very easy to convince with your voice instead of facts, logic, data, and insight. There were certainly times where I felt that the doc process was used unnecessarily as a blunt cudgel, but for the big decisions, and the planning process, it was incredibly helpful. As I have transitioned to working with companies as an investor, advisor, and board member, I have continued to use the templated FAQ docs for driving decisions. I am starting to get my teams to use them for board meetings.
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- dave84 8y agoAnd yet I still get emails from Amazon trying to sell me products I just bought. Bought a hygrometer earlier in the week, delivered yesterday, email today about hygrometers. Maybe they have data showing that converts well.
- baxtr 8y agoMy feeling: amazon is great in applying ML in the back, e.g. warehouse replenishments, but not so great in the customer facing applications. Only my view from outside
- areoform 8y agoActually, they do! This is a frequent misunderstanding, but buyer's remorse is a common thing and a lot of folks return the items that they've bought because they're unsatisfied with it. Even if it is 5% of all customers, the numbers will add up really fast for Amazon. It's quite clever if you look at it from an aggregate perspective. They're casting a wider, second net to catch the fish who slip through.
- mynegation 8y agoI bought a hygrometer to test on one plant, works well, going to buy some more (actual situation). I may not need more than one trimmer but with high probability Amazons algorithms know that some products are bought more than once.