How to Build the “Next Amazon” in 3 Simple Steps
Aaron Dinin
Faculty, Duke University Innovation & Entrepreneurship. Co-Founder, Audience Acceleration Labs
One of my colleagues was teaching a class about Amazon so he and his students could explore the e-commerce giant’s impact on… well… pretty much everything. Since he knew I’m a “startup guy” with lots of knowledge about Internet history, he invited me to give a guest lecture.
“Sure,” I told him, in response to the email with his speaking invitation. “What about Amazon do you want me to discuss?”
When I read his reply, I can’t remember whether I actually rolled my eyes or just imagined rolling them. Either way, his request was absurd. He wrote: “I’d love for you to share your thoughts on how Amazon became so successful.?If you were going to start a new company, how would you turn it into another Amazon?”
Seriously??I said to myself.?If I knew how to start a new company and turn it into Amazon, would I really be sharing that info? Wouldn’t I be busy building the next Amazon?
However, the more I thought about his question, the more I started thinking it’s actually not a particularly difficult question to answer. In fact, the secret to building the next Amazon can be summarized in three simple steps:
Step 1: Find an industry about to be disrupted
When Amazon launched in 1994, the vast majority of consumer purchases happened in-person at physical retail stores, while a tiny minority of purchases happened remotely through mail-order catalogs. However, the World Wide Web — first made publicly available in April of 1993 — was slowly starting to flip that dynamic.
Within a few months of the Web’s launch, the first e-commerce companies began appearing (spearheaded by?Jason Olim and a company called CDNow, in case you’re interested in that story). Jeff Bezos saw those early e-commerce companies and recognized the significance of what was about to happen.?The Internet was going to disrupt the multi-trillion-dollar world of consumer purchasing.
To be clear, the disruption of traditional commerce wasn’t going to happen overnight.?But Bezos recognized that disruption of commerce was inevitable. Over time, consumer buying habits would shift toward online ordering because it would eventually become faster, easier, and more convenient. This shift in purchasing habits meant an enormous market opportunity was forming.
If you want to launch the “next Amazon,” you need to be looking for a similar pattern.?What emerging technology is going to completely transform a well-established, entrenched societal system with trillions of dollars flowing through it?
Step 2: Identify the optimal market entry point
As I mentioned earlier, the Internet’s disruption of commerce wasn’t going to happen overnight. Just as importantly, nobody could predict the speed at which it would happen. Would consumers shift to online purchasing within a few months? Years? Decades?
When launching Amazon, Jeff Bezos had to deal with this uncertain timeline. The way he did it was by identifying the perfect entry point into the commerce market that would allow him to survive an unknowable technology adoption timeline. That entry point was books.
For a fledgling e-commerce venture in an era when most people didn’t have email accounts, books had a ton of advantages as a product category. For example:
领英推荐
Because of these benefits (and dozens more we could surely come up with),?books were a great entry point into the disruptive new e-commerce market.?As a result, they became a tool Amazon could leverage to train its customers. Once Amazon demonstrated the simplicity and convenience of buying books online, convincing consumers to jump from books to every other type of product imaginable was both logical and exciting.
Step 3: Figure out how to get users
Every good entrepreneur knows that having the best product in the world doesn’t mean anything if you can’t get users for it.?Because of this, in order for Amazon to succeed,?it had to do more than just find the right market and right entry point.?It also had to figure out how to attract users.
Amazon solved this problem brilliantly by developing the Amazon Affiliates program. In case you’re unfamiliar or unaware of it, Amazon pays a portion of every sale to the person who referred the traffic. For example, when you’re watching an unboxing video on YouTube for a new keyboard and the vlogger urges you to “click the link in the description” to go buy it, he’s not doing that just because he’s passionate about the keyboard and wants other people to enjoy it as much as him. He’s doing that because it’s a link to Amazon. If you click it and then buy something, he makes money.
To be clear,?you don’t even have to buy that specific keyboard. Whatever you buy in the next 24 hours — even a $2,000 TV — the vlogger is going to get somewhere between 2% and 7% of the purchase price.
Amazon’s unique take on affiliate marketing was a game changer.?Anyone with an audience online in the early days of the Web suddenly had a great reason to tell people to use Amazon, and that’s exactly what they did. Word of mouth about Amazon spread nearly as fast as the Internet, and the result was the behemoth we all know and use today.
Yes, building Amazon really was that simple. Well… simple to explain:?find an emerging technology that’s going to completely change the way a massive industry operates; find the optimal entry point into the market; and find a way to get attention for what you’ve built. Do those three things and you’ll have built yourself the next Amazon.
Easy, right?
So why am I telling all of you instead of building the next Amazon myself? Hopefully you already know the answer to that question, but, in case you don’t, I’ll end by sharing the same warning I gave at the end of my lecture…
Always remember that, in entrepreneurship, execution matters more than ideas.?You might have a great idea for the next “world changing” company. That doesn’t matter.?What matters is whether or not you can figure out how to actually build it.?Good luck!
Aaron Dinin teaches entrepreneurship at Duke University. A version of this article originally appeared on?Medium, where he frequently posts about startups, sales, and marketing. For more from Aaron, you can also follow him on?Twitter?or subscribe to?Web Masters,?his podcast exploring digital entrepreneurship.
Team Lead & Translator (J-E) at The Meehan Group
2 年I can't help but wonder if there is a danger to thinking of it in terms of 'the Next Amazon'? Particularly with regards to the scope you start with and the choices made towards that scope. I see it a lot in media, particularly TV shows. Everything seems to be trying to live up to the notion of being the next Game of Thrones, and making choices to try and be like or the same as GoT, then... Deliberately setting out to be the next big thing strikes me as something that sounds like a good, ambitious idea at first but then can very quickly cause pretty chronic problems.