How to Negotiate Like an A-hole: Amazon Edition

91jQbQf8lTL._SL1500_In the book The Everything Store, Brad Stone takes an inside look at the rise of Jeff Bezos and Amazon. Bezos is notorious for his belief in the long term, which leads to the company sacrificing short-term profits to help fuel future growth. The company also has a maniacal focus on customer satisfaction, often at the expense of relationships with vendors, clients, and (sometimes) employees.

Stone reveals several anecdotes where these two factors meet to led to some ultra-shrewd business moves by Bezos and his team. Some examples:

The Kindle

When wrangling publishers to offer their books for the Kindle, Amazon purposefully never mentioned price. The publishers found out with the rest of the world at the Kindle launch event. From the book:

Among the gathered publishing execs at the Kindle press conference, there was confusion. Was the $9.99 price a promotional discount for the launch?

Finally the grim reality set in and publishing executives kicked themselves for their own gullibility

[One publishing executive said,] “If I could rewrite history I would have said, ‘Thanks so much, I love the idea of the Kindle, but let’s have an agreement that says you will not sell below the cost.’ I feel like I was asleep at the tiller.”

The new price made digital cheaper than paperback, which made customers buy more books, which made the publishers more dependent on Amazon. The company purposefully capitalized on the publishers lack of understanding about the new medium to provide the best value and make the book industry further reliant on Amazon. 

UPS

In 2002, Amazon’s contract with UPS was up for renewal and the shipping company was ready to play hardball. Amazon was in a weak negotiating position. It wasn’t using FedEx at all, and the Postal Service was barred from negotiating rates. Six months before negotiating, Amazon moved to improve its positioning:

Over the course of six months [Amazon employee Bruce] Jones traveled to FedEx’s headquarters in Memphis, integrating their systems and quietly ratcheting up the volume of packages. Amazon also increased its shipment injections with the U.S. Postal Service: company employees drove Amazon’s trucks to the post office and inserted packages directly into the flow of federal mail.

Then, when UPS refused to lower their rates, Amazon “flipped the switch” and stopped using UPS cold turkey:

“In twelve hours they went from millions of pieces a day to a couple a day,” says Jones.

UPS execs caved and gave Amazon discounted rates.

Toys “R” Us

In its early days Amazon would partner with various retailers to keep its site stocked with items from markets it didn’t understand or couldn’t fit in its warehouses. One of the company’s earliest partners was Toys “R” Us, and Bezos ratcheted up the theatrics:

The negotiations were, as was often the case when Jeff Bezos was involved, long and, according to Jon Foster, “excruciating.” When both teams met for the first time, Bezos made a big show of keeping once chair open at the conference-room table, “for the customer,” he explained.

They two companies ended up striking a deal after being at an impasse for months.

While Bezos and company weren’t so kind to their negotiating partners, no one can argue with the results. You can buy the book here.

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How to Deal (or Not Deal) with Phone Calls

No Phone by Scott Lewis from The Noun Project

No Phone by Scott Lewis from The Noun Project

Do you get pissed off whenever someone asks you to setup a “quick call” to chat? Gary Vaynerchuk bets that you do:

We have gotten to a place where everything happens on our time. You watch the TV show when you want to watch it, not because it airs on Wednesday at 8 (7 central). You text because you can respond to that person on your time.

In a thoughtful tirade against phone calls, Dharmesh Shah, founder of HubSpot, left some important takeaways for how to deal with phone calls (and by extension, meetings), including:

To avoid the awkwardness around small-talk, try to outline what the topic of the conversation is going to be.  It makes you feel less guilty for transitioning into the purpose of the call.

Use email to get your high-level thoughts communicated first, and then use a phone call to add a personal touch or to have a higher bandwidth conversation.

If your work requires phone calls, that’s understandable. But remember that more often than not, synchronous communication puts you in a reactionary state. Don’t feel obligated to answer the phone every time it rings; what’s urgent isn’t always important.

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Learn the Rules & Then Break Them

dp_wrongtheory4_f

Scott Dadich’s spread for an article on Ridley Scott in Wired Magazine.

Editor-in-chief of Wired Magazine Scott Dadich says it’s time to start getting it wrong. In the field of technology design, we have figured out how to do it right. We have beautiful, sleek devices that are an ease to use – and it’s getting boring:

…once a certain maturity has been reached, someone comes along who decides to take a different route. Instead of trying to create an ever more polished and perfect artifact, this rebel actively seeks out imperfection—sticking a pole in the middle of his painting, intentionally adding grungy feedback to a guitar solo, deliberately photographing unpleasant subjects. Eventually some of these creative breakthroughs end up becoming the foundation of a new set of aesthetic rules, and the cycle begins again.

Dadich emphasizes that it’s not about throwing out design rules and starting from scratch. You need to master the rules so you can effectively break them. In his work for Wired Magazine, Dadich would apply his ‘Wrong Theory’ in small ways by only breaking one or two rules to regain visual interest. He would make large images small, overlap graphic and type and put headlines at the end of stories. Our future lies in failure as Dadich states, “…only by courting failure can we find new ways forward.”

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Use the Restroom Test to Make the Most of Conferences

Toilet Paper designed by Collectif Intro from the Noun Project

Toilet Paper designed by Collectif Intro from the Noun Project

Being shy or introverted doesn’t mean you can’t network like a pro at events. Over at Atomic Spin, Phil Kirkham gives us three tips on how to get the most from a conference or event. Our favorite is The Restroom Test, a way to check how well you’re doing at mixing and mingling with your fellow event-goers:

Take a walk to the restroom and back and see how many people that you did not know previously nod in recognition or say Hi. By the second day of the conference, I could count on getting at least 5 nods of recognition during my walk.

Even if you’re not overly shy, conferences can be intimidating thanks to the sheer number (and talents) of those around you. If at the end of the conference, you still find yourself among only strangers, it’s a good indicator that you’re not making the most of your time there. At the heart of it, Kirkham’s Restroom Test is a great way to not only help measure the number of new people you’re meeting during the event, but also to strengthen your memory of them. 

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Paul Jarvis: Find Your Rat People

rats

Illustration of Paul Jarvis’ rats

Web designer and author Paul Jarvis wants you to find your “rat people.” These are the people who are passionate about the same things as you, in Jarvis’ case, that’s pet rats. Not everyone is going to have the same interests and that’s perfectly alright. However, stay away from those who insult you because of who you are.

The ones who think your work is useless or worse, disgusting don’t truly matter. Their dissension should fall on deaf ears because they’d never support you, pay you or join your secret club. When you give up trying to please everyone your work becomes much more focused and valuable to the people that matter.

Your rat people get what you do and love it. These are the people you should look for as clients, have on your mailing list and friend on social media. Too often we let the client decide if we are the right designer for them when we should be questioning if they are the right client for us. Jarvis reminds us, “for your creativity to support you, you need to find your 1%. Your rat people.”

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Recover from Failure with a Deep-Tissue Post-Mortem

Stones by Roberto Notarangelo from The Noun Project

Stones by Roberto Notarangelo from The Noun Project

Creative professionals who practice rapid iteration believe in the mantra of “fail fast, fail often.” And while quickly bouncing back from mistakes is essential to accelerated progress, not adequately reflecting upon failure can prevent complete recovery. Sometimes, deeper reflection is needed.

Founder and CEO of “failure consultancy” Fail Forward, Ashley Good, recommends performing what she calls a “deep-tissue post-mortem” to thoroughly recover from failure:

Our tendency in times of failure is to try to figure out what caused it, fix it as soon as possible and move on. That undermines the depth of learning that’s possible.

Good suggests asking the following questions to get started:

Try to figure out why the failure happened. What assumptions were made? What experiences led to it? That really deepens what you can learn from the experience. Also, listen to other perspectives on what happened. I often bring together different stakeholders in the failure to talk about it. If you bring five people together, you’ll get five different stories about what went wrong.

Don’t just sweep the failures under the rug and move on. Take some time to sufficiently prepare yourself for when you will, inevitably, fail again.

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For Better Ideas, Use Your Blank Space

Outline designed by Diogo Trindade from the Noun Project

Outline designed by Diogo Trindade from the Noun Project

Intentionally leaving part of an idea blank can actually make it more engaging. Over at Harvard Business Review, author Matthew E May describes the benefit leaving intentional spaces in our work creates:

When we respect the white space — or when we intentionally create by removing just the right thing in just the right way — we allow others to fill the void, adding their own interpretation and impact. In fact, I’d argue that some of the most engaging ideas have something purposefully missing. Limiting information engages the imagination

There is nothing more powerful than the ability of the human mind to create meaning from missing information. Whatever form your idea takes–strategy, product, service, startup–if you want it to “tip,” you might just want to make it more about less.

A great example of this strategy in action would be working on a story — for a novel, or a project storyboard — and creating only the beginning and the ends. Presenting the story to your peers allows them to generate their own ideas for what happens in-between, ultimately creating a more powerful story than if you had otherwise come up with it entirely, from beginning to end, on your own.

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