Amazon Works Backwards

Read time: 4 minutes

Hey there 👋 - it's Brian.

I want to talk about the one strategy Bezos used to make Amazon worth $1.7 TRILLION:

Customer-centered decision-making.

In today's issue, we'll talk about the decision-making framework Amazon uses to prioritize which products/businesses to launch. Spoiler: the customer is in the middle of it all.

We even found Amazon's templates so you can use it yourself.

Let's get into it:

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Businesses exist to provide solutions to customers

The business that provides the best solution to the customer's pain will win. Period.

Most companies like to say they care about the customer, but few have customers as the primary focus in their company culture and processes.

One company has gone above and beyond to engrain the customer into everything they do:

Amazon.

In fact, Amazon is OBSESSED with their customer. And it's the secret to how they've become one of the most valuable companies in the world.

Jeff Bezos is customer obsessed

Just count the number of times he says the word "customer" in this famous interview with CNBC in 1999.

The interviewer grills Bezos about his business model and you sense Bezos' frustration - everyone is so focused on the business model all he wants is to provide the best customer experience:

But... Bezos had a problem.

He had a rapidly growing company with unlimited ideas for growth. How does he make sure everything Amazon builds creates better customer experience?

They work backwards.

For every product/business they want to launch, Amazon creates the future press release (and FAQs) they would want to see.

Then, they decide which initiatives to launch based on which press release creates the best customer experience.

How does Amazon work backwards?

Thanks to Ian McAllister (director of Amazon's Delivery Experience), we have insight into how they make products backwards (article here).

The first step?

Write the final press release and FAQs (PRFAQs) that you want to see when you launch your product! Starting at the end is why Amazon calls it "working backwards."

Continue to iterate on the PRFAQs until the customer is ecstatic with what you've built and your solution is the best at solving their specific problems.

Prioritize the initiatives that position their business to solve the customer's problem better than anyone else.

Here's how your business can work backwards

1) Write your PR and FAQs before you decide to prioritize building a new product or business

Then, write down how customers will react. Tweak your PRFAQs until your target customer is ecstatic with how your solution solve their problem better than anyone else.

Here's the Amazon template (with an example) that you can use for your business.

2) Understand who your target customer is

You can't write a press release with your customer's reaction if you don't know who your customer is.

Get an in-depth understanding of your target customer:• Demographics (e.g., industry, revenue, income level, age range, personality traits)• Jobs to be done (e.g., customer needs to send an email)

Demographics tell you who your customer is, but they don't tell you why your customer is buying from you. "Jobs to be done" helps you segment your customers by what they are trying to accomplish.

Here's an HBR article from Clayton Christensen explaining how to Know Your Customer's Jobs to be Done.

3) Understand your customer pains (better than anyone else)

You can't build the best solution for your customer's problems if you don't understand their pain better than anyone else.

A few ways to understand customer pain:

1) Read customer complaints on social mediaCustomers love to complain about companies online. Typically directly at the company itself.

To find them: write down your competitive alternatives and write down keywords related to your pain. In case you missed it, here's a previous issue to help you think through all competitive alternatives.

Use sites like these to search for your problem and competitor to find complaints:• Twitter• Reddit• Quora• Yelp

Here's a sample customer complaint on Twitter from Tesla:

Look for a similar complaint about your competitor. Competitor complaints are your opportunity.

2) Interview customersMost people ask customers questions in a way that gets them to respond with misleading information.

You'll think you're getting strong signals from customers that they want to buy and you'll end up building the wrong product!

Ask these questions to your customers to make sure you're understanding their pain.Make sure you're interviewing a representative sample across your different customer segments.

3) Online surveysUse a tool (like Typeform) to send customers questions about their pain.

Keep in mind for both interviews and surveys, customers won't see what's in it for them so you'll need to reward them.

Consider giving them gift cards or offer a credit for your product/service.

Ready to focus your business on prioritizing the customer?

Great!

If you want help, reply to this email with "I'd love help with my growth" and I'll point you to resources to help.

I read every email and will answer your questions in future content.

If you enjoyed it, please forward this email to friends looking to grow their business.

See ya next week,

Brian