Invention at Amazon

Over at Geekwire, they sum up a question served up to Jeff Bezos at Amazon’s most recent shareholder meeting:

The question: Amazon seems to be executing well lately — is the company taking enough risks? Added the shareholder, “If it’s still Amazon’s philosophy to make bold bets, I would expect that maybe some of them wouldn’t work out, but I am just not seeing that. So, my question is where are the losers?”

Bezos answer is long and thoughtful, but nicely summed up in the first few sentences:

In a way, that is like the nicest compliment I’ve ever gotten. First of all, I think we have gotten pretty lucky recently. You should anticipate a certain amount of failure. Our two big initiatives, AWS and Kindle — two big, clean-sheet initiatives — have worked out very well. Ninety-plus percent of the innovation at Amazon is incremental and critical and much less risky. We know how to open new product categories. We know how to open new geographies.

I really like how Bezos seems to recognize the distinction between invention (creation of a new thing) and innovation (adaptation of an existing thing to a market). Later in his answer he even says, “I believe if you don’t have that set of things in your corporate culture, then you can’t do large-scale invention. You can do incremental invention, which is critically important for any company. But it is very difficult [to make big bets on large-scale invention] — if you are not willing to be misunderstood. People will misunderstand you.”

[Via James Gross]

June 18, 2011