Book Notes: Failing To Succeed

• Execution is key. Once you have identified a problem and defined a solution, the most important thing is to execute well.
• Focus on solving a problem, not just coming up with an idea. When evaluating your business plan, ask yourself if you are solving a problem for a large enough group of customers and if your solution is superior to existing solutions.
• Start-ups must be able to improve existing products or services in the market by doing it better, faster, or cheaper at scale.
• Co-founders of a start-up should have a shared past and a deep understanding of each other.
• When someone offers you an exciting opportunity, say yes and figure out the how later.
• To build a sustainable long-term business, every order must be profitable after direct costs.
• There are no free lunches or free shipping. Customers should pay for the convenience of home delivery.
• Focus on keeping the customer experience pure. This means paying attention to small details, such as making the surname field mandatory on the site and shipping sensitive personal items in opaque packets.
• Use the 2 × 2 × 2 rule to evaluate your business plan: double the costs, halve the sales, and halve the margins. This will help you to cover for unexpected market developments and to determine how much funding you need.
• Retailers make money by buying well instead of selling well.This means carefully selecting products and negotiating good prices with suppliers.
• The three key drivers of customer experience are selection, pricing, and availability.Everything else in the business, such as technology, website design, marketing, operations, logistics, customer service, returns, refunds, data analytics, apps, etc., should be focused on driving these drivers.
• Great organizations focus on keeping the water pure.This means focusing on preventing problems from happening in the first place. Ordinary firms focus on efficient de-silting, which is dealing with problems after they have happened.
• Key metrics to track include monthly unique visitors, catalogue size, conversion rate per cent, average ticket size, gross margins, repeat customer rate, CAC (customer acquisition costs), CRC (customer retention costs), and CRR (customer repeat rates).
• Crises will pass, but it is important to be prepared for them. Ensure that creditors can always reach you. They are more willing to wait if they can still communicate.
• When a crisis hits, you will find out who your most loyal employees are.

Amazon