5 Lessons Learned From Amazon Worth Applying to Your On-Demand Business

A few years ago, I decided to trade my life as CEO of a >$100m company for an on-demand mobile car wash app, Spiffy, that was making less than $1m.

Hear me out.

You see, for 15 years as CEO of ChannelAdvisor, I had a front row seat to Amazon’s ascendency. Ok, to be honest, I have a bit of an Amazon obsession. I know hundreds of current and past Amazonians and religiously follow everything the company does. I podcast about it, I blog about it, I watch every Jeff Bezos video, I read all the shareholder letters repeatedly. I’m an Amazon Geek, Amazon Nerd, whatever you want to call me, I’m cool with it.

One of the key reasons I jumped into Spiffy full time is because I figured it was time to stop studying and analyzing what makes Amazon so successful and start applying those lessons to my own consumer-oriented business.

In this article, I want to share five key lessons I learned from Amazon that we’re applying to our on-demand economy service business that are really delivering results.

Lesson 1: Bet on 10 Year Trends

Dating back to 1997, Bezos informed his shareholders that Amazon was going to focus on the bigger picture. Rather than concentrating on trends that resemble fads, they chose to direct their efforts to long-term customer trends lasting more than 10 years.  They identified low prices, fast inexpensive shipping and selection/variety.

It is now 20yrs later and Amazon has built a ~$500b business growing 25% y/y on that foundation. At Spiffy, we are applying the same mentality to on-demand services by constantly sourcing technology that save our technicians time, reducing friction by going out of our way for the customer, and committing to service that exceeds expectations.

Lesson 2: Put Customers First

Amazon is notorious for placing customers first. The idea of placing customers first seems obvious, but many companies lose that priority along the way. Amazon always starts with the customer first and works backwards.

We found in our discussions with customers a high dissatisfaction with current oil change options.  Dealers and ‘rapid oil change’ stations were bad experiences due to lengthy wait times, bait and switch sales methods, and the complexity of oil changes.

With that feedback, when putting our mobile oil change offering together we started at the customer and worked back.  We decided we would (of course) bring the service to customers and reduce pricing complexity. We also use the manufacturer’s highest recommended quality of oil, change the oil filter, and complete a multi-point inspection.

Lesson 3: Innovate

Referring back to Bezos’ 1997 shareholder letter, he also mentioned how Amazon is a day one company. He was alluding to the beginning of the Digital Age, rise of the internet, and how Amazon innovated in the middle of it all.

Keep in mind, this is a company with over $100 billion in revenue and 300,000 employees, and the CEO has instilled in the culture that if you hesitate for a second to focus on customers, think long-term and innovate, you will face an existential crisis. If any company has earned the right to coast a little bit, it’s Amazon, but don’t count on it. This seems to be the key to avoiding the innovator’s dilemma.

Lesson 4: Let Data Make the Call

Bezos’ 2016 shareholder letter centers around Amazon’s attitude on quick decision making:

“…If you’re good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.”

I’ve found myself at Spiffy resisting the urge to say no to what maybe a wacky idea and instead saying, well let’s test it.  When you have a digital company, the good news is many times you don’t even need to make a decision – put out an experiment and let the data tell you. More ideas are successful than you would have guessed.

Lesson 5: Don’t Be Afraid to Fail

As previously mentioned, focusing on decade long trends proves beneficial to companies. Thinking long-term also includes bearing failures along the way. Here is a quote from Amazon’s 2015 letter:

“We all know that if you swing for the fences, you’re going to strike out a lot, but you’re also going to hit some home runs.”

At Spiffy we’re only 4yrs old and we’ve had 5 medium size failures and many many more small failures.  I’m glad we have each of these failures because we learned a ton from them and I honestly don’t think we’d be on the path we are on now without them.  The key is each of these failures wasn’t a ‘bet the business’ event and in each case, we realized the mistake quickly and were able to learn, course correct and then find success from the failure.

Conclusion

I hope these five lessons from Amazon that we are applying every day at Spiffy have given you something to think about and use in your business.  On a daily basis, when decisions or new situations come up, I ask myself: “What would Amazon do?” and this serves as a constant reminder to put the customer first, think long-term, make decisions quickly and not fear failure.

It’s too early to tell how successful Spiffy will be following this mentality, but we’re growing > 150% y/y right now and customer satisfaction is up and to the right, so early signs are that leveraging Amazon’s strategies is working.  Stay tuned.

Scot Wingo is CEO of Spiffy
 

 

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