Wednesday, April 27, 2011

Jeff Bezos: Still Innovating

Image representing Jeff Bezos as depicted in C...Image via CrunchBaseJeff Bezos was not having the greatest of time when the dot com collapse happened in 2000. The guy still had a lot of money in the bank, but the press was full of critics who said Bezos has never made a dime for his investors, it was only a matter of time before his money runs out also. Bezos proves the bozos wrong. Not only that, Amazon grew like crazy through the Great Recession. And somewhere along the way he gave the world the cloud: Amazon Web Services. He suggested servers were like electricity. Don't buy your own little generator.

The dude is a visionary, sure.
San Francisco Chronicle: Why I, Jeff Bezos, Keep Spending Billions On Amazon R&D: Random forests, naïve Bayesian estimators, RESTful services, gossip protocols, eventual consistency, data sharding, anti-entropy, Byzantine quorum, erasure coding, vector clocks … walk into certain Amazon meetings, and you may momentarily think you’ve stumbled into a computer science lecture...... Look inside a current textbook on software architecture, and you’ll find few patterns that we don’t apply at Amazon. We use high-performance transactions systems, complex rendering and object caching, workflow and queuing systems, business intelligence and data analytics, machine learning and pattern recognition, neural networks and probabilistic decision making, and a wide variety of other techniques ..... our architects and engineers have had to advance research in directions that no academic had yet taken ...... Service-oriented architecture -- or SOA -- is the fundamental building abstraction for Amazon technologies. ...... Our e-commerce platform is composed of a federation of hundreds of software services that work in concert to deliver functionality ranging from recommendations to order fulfillment to inventory tracking. ...... to construct a product detail page for a customer visiting, our software calls on between 200 and 300 services to present a highly personalized experience for that customer .... our key data services store many petabytes of data and handle millions of requests per second ...... The storage systems we’ve pioneered demonstrate extreme scalability while maintaining tight control over performance, availability, and cost. To achieve their ultra-scale properties these systems take a novel approach to data update management: by relaxing the synchronization requirements of updates that need to be disseminated to large numbers of replicas, these systems are able to survive under the harshest performance and availability conditions. These implementations are based on the concept of eventual consistency. The advances in data management developed by Amazon engineers have been the starting point for the architectures underneath the cloud storage and data management services offered by Amazon Web Services (AWS)...... our Simple Storage Service, Elastic Block Store, and SimpleDB all derive their basic architecture from unique Amazon technologies ..... product data ingestion and categorization, demand forecasting, inventory allocation, and fraud detection ....... advanced machine learning techniques provide more accurate classification and can self-heal to adapt to changing conditions .... The diversity of products demands that we employ modern regression techniques like trained random forests of decision trees to flexibly incorporate thousands of product attributes at rank time...... Technology infuses all of our teams, all of our processes, our decision-making, and our approach to innovation in each of our businesses. It is deeply integrated into everything we do. ...... Whispersync, our Kindle service designed to ensure that everywhere you go, no matter what devices you have with you, you can access your reading library and all of your highlights, notes, and bookmarks, all in sync across your Kindle devices and mobile apps. The technical challenge is making this a reality for millions of Kindle owners, with hundreds of millions of books, and hundreds of device types, living in over 100 countries around the world—at 24x7 reliability. At the heart of Whispersync is an eventually consistent replicated data store, with application defined conflict resolution that must and can deal with device isolation lasting weeks or longer.... We live in an era of extraordinary increases in available bandwidth, disk space, and processing power, all of which continue to get cheap fast..... we have unshakeable conviction that the long-term interests of shareowners are perfectly aligned with the interests of customers...... As always, I attach a copy of our original 1997 letter. Our approach remains the same, and it’s still Day 1.

Amazon's 1997 Letter To Shareholders: uses the Internet to create real value for its customers and, by doing so, hopes to create an enduring franchise, even in established and large markets. ...... We see substantial opportunity in the large markets we are targeting. This strategy is not without risk: it requires serious investment and crisp execution against established franchise leaders. ..... Market leadership can translate directly to higher revenue, higher profitability, greater capital velocity, and correspondingly stronger returns on invested capital. ...... We first measure ourselves in terms of the metrics most indicative of our market leadership: customer and revenue growth, the degree to which our customers continue to purchase from us on a repeat basis, and the strength of our brand. ...... We will continue to focus relentlessly on our customers. ...... We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions. ..... our lean culture. We understand the importance of continually reinforcing a cost-conscious culture ..... At this stage, we choose to prioritize growth because we believe that scale is central to achieving the potential of our business model. ...... hiring and retaining versatile and talented employees, and continue to weight their compensation to stock options rather than cash. We know our success will be largely affected by our ability to attract and retain a motivated employee base, each of whom must think like, and therefore must actually be, an owner. ...... Obsess Over Customers ..... the Web was, and still is, the World Wide Wait. ...... we set out to offer customers something they simply could not get any other way, and began serving them with books. We brought them much more selection than was possible in a physical store (our store would now occupy 6 football fields), and presented it in a useful, easy-to-search, and easy-to-browse format in a store open 365 days a year, 24 hours a day. We maintained a dogged focus on improving the shopping experience ...... We dramatically lowered prices ..... Word of mouth remains the most powerful customer acquisition tool we have ..... Repeat purchases and word of mouth have combined to make the market leader in online bookselling. ...... Sales grew from $15.7 million in 1996 to $147.8 million – an 838% increase. ...... In terms of audience reach, per Media Metrix, our Web site went from a rank of 90th to within the top 20. ..... We established long-term relationships with many important strategic partners, including America Online, Yahoo!, Excite, Netscape, GeoCities, AltaVista, @Home, and Prodigy. ......’s employee base grew from 158 to 614, and we significantly strengthened our management team. ....... Distribution center capacity grew from 50,000 to 285,000 square feet, including a 70% expansion of our Seattle facilities and the launch of our second distribution center in Delaware in November. ...... over 200,000 titles at year-end ..... Our cash and investment balances at year-end were $125 million, thanks to our initial public offering in May 1997 and our $75 million loan ...... Setting the bar high in our approach to hiring has been, and will continue to be, the single most important element of’s success. ..... I tell them, “You can work long, hard, or smart, but at you can’t choose two out of three” .... we are working to build something important, something that matters to our customers, something that we can all tell our grandchildren about. Such things aren’t meant to be easy. ...... 1997 was indeed an incredible year.

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