“Amazon is a technology company. We just happen to do retail”
So much insight in this fascinating talk from Werner Vogels, Amazon CTO, at the recent HackFwd event in Berlin. Werner essentially tells the story of how Amazon Web Services (their cloud infrastructure offering) came about but in doing so makes the point that many of the principles talked about around Lean Start-Up are ones that remain central to the way in which Amazon operates.
Scaling quickly had always been the key priority for Amazon, more of a priority than maintaining a coherent architecture, which led them to developing services based around APIs rather than direct database access. This in turn leant itself nicely to an organisational structure focused around small teams typically comprised of 8-10 people ('Two-Pizza' teams – the number of people who can be fed easily with two large pizzas). There are currently around 800 such teams in the business behind 800 different services which go to comprise the wider Amazon offering (calling the home page requires about 200-300 such services to construct the page for you). Teams of 8-10 people are able to stay in touch with what each of them are doing, whereas meetings would be required to do this for larger teams.
This decentralised structure has several major benefits. It is a structure that is built for speed. They can bring a new service or product to market in 10-15 days. But it also means that they inherently design for flexibility, for on-demand and, where appropriate, for automation. Processes are distilled into their simplest form because they have to be. It means that they can enable a culture of continuous innovation ("Amazon Web Services looks like a collection of 15 or 20 or 40 startups") and a relentless customer focus (benefits from additional scale are passed on to customers, innovation is focused on the things that don't change, those that will always be important to people). Amazon Web Services launches a continous stream of new products, each with minimal features sets. More features are launched only through close co-operation with cutomers.
At the recent Google Firestarters event, Mel Exon talked about how the new agency OS might be characterised by small, nimble, networked, task-based teams (as Nigel Bogle had put it "Big is a collection of smalls"). Despite building a huge business, Amazon have been able to retain the flexibility and adaptability of a start-up. In a world increasingly characterised by the need to respond to and design for on-demand, there's a lesson in that for all of us.