The startup cycle of innovation

Have you ever owned a Crackberry? The Gen Z crowd may not remember, but before the iPhone, the hottest mobile phone on the planet was the Blackberry.

I did own one. In fact, I had five different models before I finally succumbed to the allure of the Motorola Droid X. But I did love the feel of that Blackberry keyboard, and it really was addictive when you started using it.

Recently I watched Blackberry, a biopic about the company behind the phone, Waterloo, Canada-based Research in Motion. It was a classic rise and fall story, where a couple nerds joined up with a business shark to take their janky idea and turn it into the fastest growing tech product at that time.

A phone that combined calls and data seemed like science fiction. RIM’s two engineering founders, Doug Fregin and Mike Lazaridis, were building pagers instead. Most telco companies tried, but found a cell phone with email was simply not feasible. But a hastily organized meeting with a US telco giant in 1997 resulted in an order that launched Blackberry.

The Blackberry became the new tech status symbol. Everyone on Wall Street had one. Athletes and stars ditched pagers for the device. The magic was a single device that combined calls, email, and a messaging service that replaced expensive SMS texting on rock-solid and fast infrastructure.

Then at the height of Blackberry's dominance, Steve Jobs announces the iPhone. The very first version Apple released did not offer anything novel, but it looked beautiful with that seamless, non-physical keyboard front screen.

Blackberry's founders ignored Apple's incursion into their market. Lazaridis scoffed at the idea that anyone would want a phone without a keyboard. But within a year, the iPhone outsold the Blackberry. Nine years after the iPhone launch, Research in Motion stopped producing consumer mobile phones and eventually shutdown all Blackberry services last year. The company exists today, but now focused on embedded systems for automobiles and other devices.

How could a company that solved some of the hardest technical challenges in mobile communications end up losing the market they built? They lost track of what customers wanted. Lazaridis thought the innovation was a keyboard on a phone, but the true innovation was something even more profound, it was allowing consumers to live an untethered life.

As Clay Christensen of The innovator's Dilemma fame, once said, "Innovation is a bitch!"*

AWS just wrapped up re:Invent (check out the replays of main talks here ), a week-long conference for AWS customers dedicated to learning about all things cloud. It is also when we launch our biggest and splashiest product releases.

This year did not disappoint, with several significant announcements and many smaller, yet also important, product updates. For startups, six announcements in particular rise to the top:

• Extending Serverless – Amazon ElastiCache Serverless for creating highly available and scalable cache supporting Redis & Memcached and Amazon Redshift Serverless using AI-driven scaling & optimization, which removes the need to manage infrastructure.
• Zero-ETL Data Pipelines – Amazon Redshift now has Zero-ETL integrations with RDS for MySQL, DynamoDB, Aurora PostgreSQL, and OpenSearch , enabling startups to analyze data from multiple sources without building and maintaining custom data pipelines.
• Custom Silicon – Graviton4 on EC2 R8g Instances , provides 30% better compute performance, 50% more cores & 75% more memory than Graviton3, while Trainium2 can train models 4x faster than with 3x memory to train foundation models and LLMs in a fraction of the time.
• AI-Powered Business Chatbot – Amazon Q is an AI–powered assistant for developers to ask questions about building on AWS and for users to query startup data with over 40 built-in connectors to common business apps from Atlassian, Google Cloud, Salesforce, etc.
• Greater Generative AI Flexibility – Amazon Bedrock gains customization through RAG and continued pre-training for Amazon Titan LLM's . Coupled with Agents , Step Functions , and Model Evaluation , this extends what startups can build with AI.
• Accelerated ML Modeling – Several enhancements come to Amazon SageMaker like Clarify to evaluate the best foundation models to use, HyperPod to speed training models, and improved Studio user experience with a developer’s IDE of choice, reducing development cycles.

This actually only covers a portion of the 187 announcements counted during the week of re:Invent. Not included in this total are big releases just prior to re:Invent such as updates to Amplify to improve the developer experience and PartyRock that let’s anyone to build a generative AI app with no-code.

How does AWS manage to accelerate the pace of innovation as a massive enterprise when Research in Motion and so many others struggle to innovate past their first breakthrough? For Amazon, it comes down culture, one that is obsessively focused on the customer, rigorously raises the bar with each hire, drives to decisions quickly, and organizes as “two-pizza teams” to stay nimble.

You may be wondering, why does this matter as a startup founder? The startup is a perfect vehicle for innovating. They are lean, focused on a singular vision, operate as small teams, and led by passionate founders. Even if you have product-market fit, you are generally focused on one product and scaling a single market. It is just a continuous cycle of building, shipping, and iterating as fast as possible.

Even startups however can fail to innovate. They get too stuck on the original idea and fail to read the market. They neglect listening to customers and hyper-focus just on product. They reach product market fit, but get bogged down on process and hierarchy as they scale. Or they let hiring standards slip and bring on the wrong talent to accelerate the business to the next stage.

For Research in Motion, they had everything in place to remain competitive. They had their pick of the best tech talent. Their struggle was remaining fixated on what they had done before and not enough on understanding where the market was going. ?By the time they pivoted their product strategy, it was too late to turnaround what had become a bloated and complex company.

To ensure you remain a nimble and customer-focused startup, you should ask yourselves the following:

1. Is everyone from the founders to individual contributors aligned on the vision and values of the startup and feel inspired by the mission?
2. Do you have a process for actively listening and engaging customers for feedback, and a way to validate this feedback against the market?
3. Are there manual, inefficient, or overly complicated processes that could be simplified through automation, AI, key hire, or eliminated altogether?
4. How often are you experimenting and testing new product and market ideas versus building and iterating on existing product and ideas?
5. Does your process for sourcing, recruiting, and hiring employees ensure with a high degree of confidence that you are raising the bar on talent with every hire?
6. Has anything substantive changed in the market, competitive landscape, or macro-economic conditions to question the thesis behind your startup vision?

When you honestly address these questions, chances are you will uncover answers that require you to change. This is how innovation works and how organizations the size of AWS down to the earliest stage startup can continue to innovate and ship at such a breakneck pace.

The best startups are constantly listening and evaluating cues in the market and internally to ensure they remain ahead of the competition. What is your approach to innovation in your startup?

Mark & Basil

*OK he did not say that exactly, but if we could summarize his vast body of research into how organizations innovate into one sentence, it would be this.

Folks sometimes ask why we joined AWS versus doing another startup or going over to the dark side of VC. Part of the draw was that at the heart of AWS is a builder culture. The people that thrive here and deliver results dive deep and invent on the behalf of customers. If you are going to work for a big company, AWS gives you the autonomy and blessing to build awesome stuff.

And we do love building! While re:Invent is always the biggest show of the year at AWS, there was a whole lot of other events, programs, and big releases that happened over 2023. Here is just a few of the more notable ones:

• Launched two new regions (Melbourne and Tel Aviv), and we announced a new region coming to Malaysia in 2024.
• Announced AWS European Sovereign Cloud to help customers in Europe meet regulatory data residency and operational requirements, fully separate & independent of other AWS Regions.
• Deliverer enhanced developer experience with new docs site for AWS Amplify, while Amazon CodeWhisperer, AWS Application Composer, and Amazon CodeCatalyst became GA.
• Dove deep into industry solutions; AWS Supply Chain announced at last year's re:Invent and AWS HealthScribe using AI to improve patient-clinician conversations are both GA.
• Accelerating startup success with the industry accelerators for Space, GovTech, Climate Tech Accelerator, Sustainable Cities, Cybersecurity, and the general Build Accelerator.
• And the biggest launch, Amazon Bedrock for building Generative AI apps, Titan foundation models, and AWS Inferentia2 chips for AI inference workloads.

With next year around the corner, 2024 is looking to be even more focused on AI, with tools for building as well as tools for using AI to further remove the undifferentiated heavy lifting of running cloud services!

The number one question last week was, “Are you at re:Invent?” Well, neither of us were able to make it this year sadly, but we had an excellent LinkedIn Live Audio Show to discuss our reactions to the top launches during re:Invent.

We had an awesome group gathered as well as our AWS colleague Lucy Faria who joined us from Munich to dive into our favorite launches. What came out on top? Amazon Q, the latest Graviton4 chip, and one service that is literally up above the clouds, our integration of Project Kuiper with AWS services!

Miss our first session? Join us Wednesday, December 13th at 9 AM ET / 3 PM CET for our LinkedIn Audio AWS Startups re:Cap show and make sure to bring your questions, we want to hear about your experiences building on AWS!

With December upon us, we will not have much in the way of community talk here, but we are gearing up for 2024. If you want to be featured for something cool you are building, ping us and we would love to feature your story!