Sunday, November 22, 2015

Some Valuable Learnings from Amazon Fire Phone failure

This is more of a recent failure. For more reasons than one, i was keen to explore this case further to figure out the possible reasons why Fire Phone failed (Significant number of Fire Phone remained unsold) to cause an impact. Amazon, under Jeff Bezos, have really made some big, bold bets in the past and atleast from outside, it appears to have a culture in which failing is not treated as a sin. This case is even more interesting considering that Amazon has had a reasonable run of success with Amazon Fire Tab. Agreed, a phone is a different animal than a tab when it comes to nuances related to its development, usage and adoption but it (and Amazon's past success with Kindle and its variants) does tell that Amazon was no novice in the area of building hardware product. Read on to know more-

Customer focus gone wrong:

If i try and think about why an organization like Amazon would want to venture into building a phone, i can certainly think of Amazon want to own the starting point of customer experience to access its online retail services. Apple, for instance, takes 30 percent of all revenue generated through apps, and 70 percent goes to the app's publisher. It means that even though Amazon may be selling e-books using Kindle app in iOS, it won't get its full share. Controlling the starting point of buying experience (i.e. owing a smart phone) can have other benefits too where Amazon could have had its own services that could have helped them sell more stuff. So, venturing into phone wasn't a bad idea at the first place. Some analysis that led into analyzing the failure of Fire Phone also led to the fact that it lost out on customer focus. This finding is a bit intriguing given the fact that Amazon is known for its customer centricity. Below are some useful insights from a Fast Company

 "Bezos’s guiding principle for Amazon has always been to start with the needs and desires of the customer and work backward. But when it came to the Fire Phone, that customer apparently became Jeff Bezos. He envisioned a list of whiz-bang features,....Perhaps most compelling was Dynamic Perspective, which uses cameras to track a user’s head and adjust the display to his or her vantage point, making the on-screen image appear three-dimensional."

 And team members simply could not imagine truly useful applications for Dynamic Perspective. As far as anyone could tell, Bezos was in search of the Fire Phone’s version of Siri, a signature feature that could make the device a blockbuster. But what was the point, they wondered, beyond some fun gaming interactions and flashy 3-D lock screens. "In meetings, all Jeff talked about was, ‘3-D, 3-D, 3-D!’ He had this childlike excitement about the feature and no one could understand why," recalls a former engineering head who worked solely on Dynamic Perspective for years. "We poured surreal amounts of money into it, yet we all thought it had no value for the customer, which was the biggest irony. Whenever anyone asked why we were doing this, the answer was, ‘Because Jeff wants it.’ No one thought the feature justified the cost to the project. No one. Absolutely no one."

If this is to be believed, Jeff Bezos vigorously backed some features which didn't make much logical sense to the team. Apparent lesson is that CEO shouldn't necessarily become the customer himself or herself but CEO should rather take the role of the best representative of the business.

Eric Schmidt, the former CEO of Google, brings in an interesting perspective in his book- "How Google Works". He doesn't eat his words when he says "Don't listen to HIPPO". Who is an HIPPO? Read on the excerpt from his book to appreciate this point more-
From the book- "How Google Works"

Lack of App ecosystem:

Keeping platform style thinking at the forefront, it is imperative that a product should be able to build an ecosystem of developers (and consumers), who can help extend the product's capabilities further and make it more useful for the consumers. As this Time article points out, 

Amazon’s app store has about 240,000 apps, compared to more than 1 million in the Google Play store.

As Apple's success had proven, to be successful- it is imperative for the Smart Phone companies to have an app ecosystem that helps its users. On the contrary, as the not-so-wide adoption of Windows phone have proven too, the apps or lack of it, really is one of the key factors. Windows, since its leadership change, has started to take the corrective actions in this regard by announcing the iOS and Android bridge projects for Windows OS.  These projects, if successful, would make it easy for developers to port Android and iOS apps to Windows. To me, releasing a smart phone without adequate app support is a fundamental flaw. It would have been accepted in 2007 (when iPhone was launched), not now when already precedent has been set with so many players already in the market.

Micro-management- the root of all evils? Nah.

There are also some apparent references to Bezos' micromanaging the entire project, which might or might not have been true. Even if it were true, i would rather look into this with a balanced mind. What i mean by this is, if we choose to blame Bezos' micro-management as a reason of failure of Fire phone, we should also be open to appreciate where his apparent micro-management worked and delivered a blockbuster product. My take on micro-management is that it is not as bad as it is often made out to be. Micro-management, like empowerment is a management strategy, which is necessary in some situation where there is a need to monitor the situation closely. It is probably bad if it's an inherent trait of a person. It isn't bad if it is used only in situations where it's used is justified.

Begin with the end in mind:

Ok, this one is not a negative learning. One of the things that i read about the how Amazon Fire phone development effort was started was particularly interesting. It said-

Like every product created at Amazon, the Fire Phone began on a piece of paper. Or rather, several typed, single-spaced pieces of paper that contained a mock-up of a press release for the product that the company hoped to launch some day. Bezos requires employees to write these pretend press releases before work begins on a new initiative. The point is to help them refine their ideas and distill their goals with the customer in mind.

Visualizing the impact that the product is bound to make even before its development has commenced didn't seem like an everyday idea to me. This approach has certain freshness in the times when many product organizations start with a formal product requirements document. With this end clear, reviewed and approved- it has the capability to become a sort of oracle against which product specific decisions could be made. Another notable aspect is the fact that Jeff Bezos' act of involving his employees to write the same. With all the flak that Bezos have been getting regarding Amazon's work culture of late, this seem like a perfect counter-argument.

This point also proves that when a product is a failure, it doesn't mean that everything that happened during its inception was wrong.

What's your take on these points? Please do share in the comments.



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