I’ve been thinking about the Amazon Effect lesson from my customer discovery research of e-commerce from last week. There are a lot of tenets to the Amazon Effect including the rise of expectations of delivery, access to goods, etc. but the one I thought about most was.

The Amazon Effect has affected some of the longest-standing fundamentals of web. That is, time on site used to be a valuable metric. Amazon has proven that a winning strategy can be the opposite — get in, find what you want, check out and get out. Fast. Come back again.

The idea sticks out because it flies in the face of expectations and a metric that website owners typically watch for – “the higher the time on page, the better”. Amazon, however, is about getting folks in and out. This is the experience Amazon wants to build as it then drives consumers to come back.
As I let this idea marinate, one thing becomes clear – Amazon knows its “wow moment”. They’re not just focused on shortening the path to check out. They’re focused on shortening the path to the “aha!” and “wow” moment. That’s the experience. That’s about getting customers getting exactly what they want, when they want, how they want, and where they want (at home, largely).
Southwest Airlines is another company who challenged a long-standing industry paradigm. In this case, it was the airline industry’s paradigm of filling a plane. Southwest can tout its success with 45 straight years of profitability. Most airlines believed profitability and revenue necessitated every seat on a plane be sold and filled. It’s one of the reasons they oversell flights.
Southwest, on the other hand, realized their bottleneck and path to revenue was the plane. As long as a plane sits on the tarmac, the more underutilized the plane is. Thus, it’s not making money.
Southwest built their business on turn-around time – how fast they could turn a flight around, even if it meant the plane was not full. They flourished with the “10-minute turnaround” as other airlines were turning planes at 60 minutes – the time from entering a gate, loading passengers and cargo, and leaving the gate.
For Southwest, the wow moment is arriving at the destination realizing their fees were far less than rivals (in addition to above-and-beyond customer service).
Longstanding business practices don’t always make sense. Consumer habits and expectations continually change. Stay focused on the customer, and realize there are more ways to achieve success, especially, when ushering the market into a new era.

I’ve been on a customer discovery journey over the last couple weeks. I haven’t dug deep on Mom Test-esque questions. Instead, I’m setting a baseline on the e-commerce space for myself.
Below are highlights from my discussions so far –
  • Initial round of 7 folks from the e-commerce space representing directors and managers of marketing with a couple in sales. Companies were each in the $1B+ category largely in consumer, but also having B2B opportunities.
  • Primary levers for growing e-commerce businesses:
    • Customer acquisition
    • Fulfillment
    • These two levers have the greatest effect on net revenue
  • To achieve higher sales, too, companies are evaluating:
    • Shortest path to revenue — “click-to-checkout”
    • Building an “optimal” customer experience
  • Customer experience for companies range from custom, and temporary, showrooms to shortening the path to revenue with engaging design elements (e.g. imagery, product information consistency)
  • The Amazon Effect has affected some of the longest-standing fundamentals of web. That is, time on site used to be a valuable metric. Amazon has proven that a winning strategy can be the opposite — get in, find what you want, check out and get out. Fast. Come back again
  • Combating the big players in customer acquisition can be difficult as they spend millions upon millions in advertising, especially, on Google and Facebook. Smaller players have to focus on niches and aiming for the repeat buy
  • There are big opportunities, still
    • Most folks still believe less than 30% of the market value (10%, more likely) is still uncovered in e-commerce (“Everyone’s gathering data, but how do you use it?”)
    • There is a lot of data being collected; however, most companies still don’t know how best to utilize the data to deliver good value
    • Dynamic pricing is highly sought after with most folks seeing this as a prime opportunity for customer acquisition and revenue growth (new and recurring)
    • Exceptional customer support and returns processes are vital to keeping customers. When you consider the difficulty of acquiring customers, keeping customers should be an ongoing strategy top-of-mind

I’m still digging into the space as it’s largely unfamiliar outside of my personal shopping. Any take-aways standing out for you that surprises you? Anything contrary to what you thought?

I’m listening to Ray Dalio’s book Principles. At whatever page I’m on, he talks about being open while also being persistent. His point revolves around the principle for always learning. To learn, people need to be open to listening. And yet, people are quick to dig into their own ideas, even if they haven’t showcased success – myself included.
Ray believes successful leaders should be able to showcase at least three instances of such in some area.
It dawns on me on this site that I espouse a lot about entrepreneurship without several successes – if we classify a liquidity event as success (e.g. stock offering, being acquired). That could continue to promote the idea that success only comes from a liquidity event which is not true. From this standpoint, should readers even value what I have to say? That’s a humbling question.
Though, Ray describes the value inexperience brings with it including new, outside perspective. He also talks about gaining buy-in from others with experience like an “influential committee”. Gain the support of those with the credibility or cite sources with credibility to bring credibility to the inexperienced.
I form my own thoughts, while oftentimes, cite or bring in others to provide credibility because I need it. I don’t have the CV to persuade without.
This brings two critical thoughts:
  • I must be careful in how I guide and advise others. I can speak of my experiences and what I’ve learned. However, I should be wary of how I guide others towards whatever their ideas of success are if I do not have the requisite experience to do so.
  • Seeking a “win” is paramount to me. Then, I need to seek my next win. I am not in the upper echelons of successful leaders right now because I don’t deserve to be. Oh, but I want to be in the group who helps architect the future. But how can I join the group if I don’t have the credentials to be amongst them?

Especially the last point, it’s causing me to reflect on my path of seeking my next entrepreneurial journey. Should I continue seeking very early-stage startups (or my own) knowing there’s such a great chance of failure? More failures only mean I become successful at failure, right?

Or, should I join a venture that is beyond early-stage where I can learn scale and gain mastery?
I’m thinking. Should I lean one way or the other? In short: I’m not there yet.

I posted recently about the importance to periodically check how a current role/ position fits into the greater journey – “Before Making Moves Based On Today’s Bad, Chart How All The Dots Align to A Path”. I took this to heart recently by reviewing my resume and updating my skills and experience. It’s made me aware of my career progression and my upcoming path as I head into my mid-30s. In short: optically, I’ve been rather stagnant.
Building a startup is incredibly hard work. Many startups do not come close to the type of success that is read about in the news or even the local startup digest. Entrepreneurship, though intrinsically rewarding, is not well-received professionally.
As I’ve had the great opportunities to lead sales at Body Boss Fitness, SalesWise, and SalesWise’s new product/ brand Burner Rocket, they’ve all been tough experiences to get through. Starting from virtually nothing and fighting to get scraps of the first 10 customers and then the next is rarely seen from the outside. The mind soaks up more information than what any “normal corporate” job may provide. However, it’s, in some ways, specialized. The bruises and cuts that I have felt by leading the charge for what a sales process may look like, what are the pieces of collateral that will help sell, how do we support our customers when we don’t even know the full metrics of what is working and what is not… those lessons are not always visible to the outside world. And yet, I know the incredible value that has been learned. I know the pains and the difficulties to get to where we are. I have good hypotheses for why we may not have grown at a faster clip, but from the outside, there’s little stock. Growing from 0-10 may not be as impressive as being a leader who hit the $2MM ARR quota from last year’s $1.5MM. Should that be?
Again, periodically looking through the portfolios of seemingly little accomplishments for early-stage opportunities, I can sense there’s a strain. There’s a pull and a fight between the desire to hop into a role where the hard work has mostly been done. Perhaps, there’s a need for an optimizer or a player to just “grow more”. It’s a struggle – to be a part of something so early that the chances of success are low. The challenges and rewards are greater. Or, do I take the easier route by following the path others have already trotted on before. In that way, perhaps I can have the requisite bullet points for others to note and say, “yes, he’s had that experience of hitting XX of quota”.
Being an entrepreneur and taking a real fight to creating something special isn’t always lauded. It’s rarely what folks are really looking for. But they’re the opportunities I’m looking for. It looks like I’m still on the right path.