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:
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.
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.
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.
As we do every Friday, we’ve collected our best stuff from the past week for your weekend reading pleasure.
How creative hobbies make us better at, well, basically everything.
If we constantly think “failure is good” what does that make the CEO who cuts over 10,000 jobs?
In the “Information Age” everything gets measured. So how can we stay sane? “The real work,” Brain Pickings founder Maria Popova says, “is how not to hang your self-worth, your sense of success and merits, the fullness of your heart, and the stability of your soul on numbers.” Read the rest of our conversation with the internet’s hardest working curator.
Post-its made for your phone, a Stay Home Club tee, and the best headphones for those 12-hour days. Every now and then we round up our favorite tools that make us want to get to work. Get your wallets ready, kids.
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It’s said that the average “prime” of a creative career is just 10 years. After that, the ideas dry up and with them the motivation to work outside the box. How can we extend our creative potential to last 20, 30, or even 50 years? Over at Wired UK, John Hegarty shares his insights on the matter:
Remove the headphones. Inspiration is everywhere — you just have to see it. If you accept that creative people are “transmitters” — they absorb all kinds of stimuli, thoughts and ideas and they reinterpret them and send them back to the world as pieces of inspiration — then it’s obvious that the more you see, connect and juxtapose, the more interesting your work will be.
The more you stay connected and stimulated, the greater the relevance of your work. By walking around in a digital cocoon you push the world away; great creative people constantly embrace it. You need to nourish your soul and your imagination.
Headphones—whether metaphorical or literal—block out the very stimulus that keeps us inspired as creatives.
While blocking out the world and focusing on our work allows us to accomplish more, it also hinders our ability to receive new input and utilize the world around us for generating even more creative ideas.
Hegarty explains how taking off your headphones isn’t the only way to strengthen (and lengthen) your creative career though. If you want to have a long and productive career as a creative, you need to avoid cynicism and its ability to undermine belief in your work, Hegarty explains. It’s also important to mix with the best creatives around us, to not hide our work or ideas.
Ed Catmull, cofounder of Pixar, shared with Harvard Business Review how to create a work environment that encourages creativity in everyone. The interview is long, and well worth the read, but his three main takeaways are:
Anyone can talk to anyone: Individuals from every department should have the ability to speak with each other without having to ask for permission. Keep the communication lines open so people can learn and be inspired by each other.
Everyone has ideas: Learn to give and receive feedback in a positive way on unfinished work. Early criticism provides the freedom to try new things because it doesn’t have to be perfect the first time. Ensure that every department, regardless of discipline, has the opportunity to comment.
Build subcultures: Break up formal departments by creating new ones. Pixar University offers classes for people to try a new discipline or something unrelated (like pilates or yoga). You never know what may come from a chance encounter with another department.
Barriers between people can easily spring up in any industry. Catmull warns that, “in a creative business like ours, these barriers are impediments to producing great work, and therefore we must do everything we can to tear them down.”
On photographer Chase Jarvis’ blog we get a look at how to best schedule our days in order to utilize what Tony Schwartz calls “strategic renewal.” It’s the concept of participating in short activities throughout the day in order to energize us both physically and mentally:
The theory boils down to the fact that we can’t increase the hours in the day, but we can increase the energy with which we make the most of those hours. Taking short, scheduled breaks throughout the day rejuvenates and restores us physically and mentally, helping us plow through those assignments and to-do lists in a third of the time.
Inspired by Schwarz and the studies he cited, I created a Daily Schedule that broke up my day into 90-minute Work Blocks, separated by 30 minute Breaks and, in the middle of my day, a 2-hour lunch. I know some of you just spit your coffee out. But you read that right.
While your Daily Schedule blocks may be different from what is set in the article, the concept remains the same: break your day into 90 minute blocks (which research has shown is the ideal length of time for any focused activity), then sprinkle in a few short chunks of restorative activities. Activities can include everything from walking, working out, a short nap, or anything that gets you away from the work for a short while.
For more information on how to schedule your ideal day to achieve strategic renewal, read the full write-up on the concept over on Chase Jarvis’ blog.
Related: How to Accomplish More By Doing Less
Work conflicts are inevitable regardless of the size of the team. At your office, perhaps the marketers and developers can’t agree on a launch date. Or as a freelancer, perhaps an irate client is strong-arming you into another round of design revisions. But before we try to deal with a conflict, Mark Gerzon, the author of Leading Through Conflict: How Successful Leaders Transform Differences Into Opportunities, asks us to stop and consider the following question:
Is the conflict hot or cold?
Hot conflict is when one or more parties are highly emotional and doing one or more of the following: speaking loudly or shouting; being physically aggressive, wild or threatening; using language that is incendiary; appearing out of control and potentially explosive.
Cold conflict is when one or more parties seem to be suppressing emotions, or actually appear “unemotional,” and are doing one or more of the following: muttering under their breath or pursing their lips; being physically withdrawn or controlled; turning away or otherwise deflecting contact; remaining silent or speaking in a tone that is passively aggressive; appearing shut down or somehow frozen.
Gauging the temperature of the conflict allows us to deal with the particular situation’s needs. Gerzon suggests that cold conflicts need to be warmed up and that hot conflicts need to be cooled down:
If the conflict is hot: You don’t want to bring participants in a hot conflict together in the same room without settings ground rules that are strong enough to contain the potentially explosive energy. For example, if you are dealing with a conflict between two board members who have already attacked each other verbally, you would set clear ground rules — and obtain agreement to them — at the outset of your board meeting before anyone has a chance to speak.
If the conflict is cold: You can usually go ahead and bring the participants or stakeholders in the conflict together, engaging them in constructive communication. That dialogue, if properly facilitated, should “warm up” the conflict enough so that it can begin to thaw out and start the process of transformation. But you will still need to be vigilant and prepared. Conflict is often cold precisely because so much feeling is being repressed. So you need to skillfully know how to warm it up without the temperature unexpectedly skyrocketing.
As our teams grow, so do the opportunities for conflict. “Conflict resolution, like cooking, works best at the optimal temperatures,” Gerzon says. “You want to bring conflict into a temperature zone where it can become useful and productive.”
For an innovative company like 3M, who invented masking tape, Thinsulate, and the Post-it note, stifling creativity was a major concern after a series of “efficiency boosting” techniques were implemented. On BusinessWeek, Brian Hindo discusses how they’ve struggled since with balancing creativity and productivity. As 3M’s past CEO George Buckley elaborates:
Invention is by its very nature a disorderly process. You can’t put a Six Sigma process into that area and say, well, I’m getting behind on invention, so I’m going to schedule myself for three good ideas on Wednesday and two on Friday. That’s not how creativity works.
Ideas need room to breathe. Researcher Steven Boyd found innovation hard to find when asked to analyze everything from commercial application to manufacturing concerns on his projects. This was a huge departure from 3M’s traditional method of allowing the research department to pursue a wide avenue of topics, engage in long testing periods and provide funding for personal projects. Remember to standardize your process, not your innovation.