"Everyday is Day One" - kept Amazon on top for decades
Jeff Bezos talked about his “Everyday is Day One" principle recently on an interview with Lex Fridman.
As Jeff says..."It's about renewal and rebirth. Everyday you are deciding what you are going to do.
And you aren't trapped by who you were.
We get to make new decisions everyday.
About invention.? About customers.? Even our principles.
You never wanna get trapped by history.
Everyday is day one because if you let it be day two than day two is already the mentality of decline.
And after that comes death."
A bit of context on my Amazon experience
Having seen the evolution of Amazon ever since its founding in 1994 when I was a junior in high school, I feel like I experienced the evolution of this company a lot deeper than generations that came after me.
Because it was the company that I interacted with constantly over the years. For nearly thirty years since its founding I have been making purchases on Amazon pretty much every year.
I’ve seen how it handled some of the challenges it faced. I’ve seen how it evolved. And I must say… they’ve done an excellent job.
I remember telling others in 2017 that Chinese e-Commerce players like Alibaba were about a decade ahead of the US. And that the Chinese players would win the majority of its battles against Amazon… both in overseas markets and eventually on Amazon’s home turf in the US.
I was wrong.
Amazon has done an excellent job upping its game and fending off the Chinese players. Even now with the onslaught of Temu, Shein and Tiktok Shop in the US… I have no doubt that Amazon will continue to be successful.
Because they truly work like ‘everyday is day one’ and reinvent themselves to rise to the next level.
How has Amazon lived by this principle?
Over the years Amazon has reinvented itself many many times. In doing so it sometimes needed to destroy some of the core components of what made them successful in the past.
A good example for me is Amazon Prime. Prime’s 2-day shipping service was first launched in 2005 and at the time it was a massive step forward in the whole e-commerce game.
The US is a huge country and being able to get millions of products delivered within two days with no shipping fee sounded too good to be true. Note that at the time it was still typical to pay $10-20 for shipping (eg. on Fedex) and it would easily take a week or more.
It created a massive moat with Amazon’s competition and made them dominant.
However in 2022 Amazon opened up Prime shipping so that eCommerce sellers could offer it even on their own websites (which are typically on something like Shopify).
They were self-destroying the moat that had existed for close to two decades.
Why? Because they knew it was time. Market conditions had changed and Prime was no longer such a competitive advantage.
But it reflected the philosophy, “Everyday is day one”. And there are no sacred cows.
Most corporates are the opposite
If I think about the large companies I interacted with early on in my career when I spent seven years in strategy consulting I can say that almost none of them had this philosophy.
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They had a very incremental approach towards the future where they fiercely defended anything that had worked for them in the past. Even if the time was ripe to move on to new pastures.
Why was this the case? Well i’d place the blame mainly on the culture and types of people they attracted. They had the mindset of wanting stability and being comfortable.
They avoided risk and disliked uncertainty.
Because in uncertain times it is the strongest and smartest that typically thrive. And the majority of the rank and file in such companies are not this.
My example from my time at Wayfair
When I joined the US furniture eCommerce player, Wayfair, in early 2017 it was a good example of this contrast. I was hired as a product director overseeing supplier operations and had freshly moved from Lazada in Southeast Asia to Wayfair’s HQ in Boston.
At Lazada we'd already built up a dropship operation that handled pickup operations for 100k+ marketplace sellers and we had well over a 90% on time pickup rate.
Wayfair was picking up from only a few thousand suppliers and it's on time pickup rate was abysmal at like 70% or something.? Plus they were using a call center with an army of folks to make outbound calls each day to remind sellers to prepare their orders on time.
There were a few fundamental things that Lazada did differently and could easily be copied by Wayfair to get much better results. Simply by adjusting the process and introducing a bit of simple tech (to include things like supplier ratings).
And I was initially very excited by the value I could bring as I saw tons of opportunities like this all over Wayfair’s operations.
Despite being much younger than Wayfair… Lazada was just a shitload better at pretty much everything ops-related.
So I tried hard to introduce these Lazada practices to my business counterparts who managed the supplier operations of Wayfair. But everytime I tried to introduce these ideas I was told that I didn't understand how Wayfair does things.
There was one lady in particular, I believe she was also a director level, who was particularly adamant to keep things as they were. In part because I believe she had worked there over a decade and contributed a lot to setting up the initial operation.
So she was proud of this fact and it also kind of made her less replaceable probably.
In any case… I pushed for awhile and then gave up. In part because her approach to fighting superior logic was to apply politics. ie. she talked to my boss (who was a VP of product) and pretty soon I was getting feedback that I should “spend more time to get to know the Wayfair way of doing things.”
Which I honestly thought was complete BS.
And so my manager (a VP of Product) encouraged me to work on call center tools or something like that instead. Something that would be completely useless if I was allowed to change the process as there would no longer be a call center involved (just as had been the case at Lazada ever since it started dropshipping).
After getting blocked across a number of similar things I just realized this company was pretty set in its ways. And much of its leadership team just wasn’t interested in stepwise change. So I gave up trying.
In any case I raise this point because I view it as a cultural thing at Wayfair during that period. There were lots of folks that had been there awhile and were proud of what they achieved, and so didn’t want newbies to change it.
The culture was the antithesis to “Everyday is Day One”. It was more like “Everyday is the Same Shit” hahaha
But since Amazon was their biggest competitor in the furniture ecommerce space.. they were about to learn why that is a bad thing.
So how have the last seven years played out?
Well in the following seven years Wayfair's valuation has actually been almost completely flat. It was about $6.5 billion when I left in mid-2017 and it is at about this level today in 2024.
They’ve struggled a lot in the last couple years and I think they’ve only had a few profitable quarters in their entire 21 year existence since 2002. Which is something Wall Street is constantly bashing them for.
Amazon, on the otherhand, has grown 3x from a ~$500 billion market cap in mid-2017 to a $1.5 trillion one today. And this despite the fact that growing gets much harder the bigger you get.
Also, Lazada's market cap has gone from about $2-3 billion in 2017 to about $15-20 billion today (ie. 5 - 10x). It’s hard to know exactly as it is part of Alibaba Group and not separated out in public records… but this is the number that you typically hear as market estimates.
I attribute a lot of this to the mindset that Lazada had in those years between 2014 and 2017.? There was no "historical Lazada way".? You’d get laughed at if you even said something like that.
We treated every day as day one and let the best solution win.
The problem today is…. I think Shopee and Tiktok Shopping are no different. It’s a game of absolute beasts now in SE Asia. :)
Attend's JSPM's Rajarshi Shahu College of Engineering
5 个月I need to experience amazon for the cap department
Chief Audit Executive | Speaker | Lecturer | Board Member | Digital Transformation | CFA, QIAL, CIA, CISA, CRMA ??
10 个月Great advice and simple principle.
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10 个月We aren’t trapped where we are, we can always choose to adjust our path, … make change, … or go an entirely new direction There are a lot less things holding us back than we think