MAKING BIG CHANGES IN TIMES OF BIG CHANGE - ( or Why Amazon Created the Kindle )
Entrepreneur magazine|March 2021
Entrepreneurs are defined by how they adapt during crises. In this exclusive excerpt from their book WORKING BACKWARDS , longtime Amazon execs COLIN BRYAR and BILL CARR reveal how the company dealt with massive disruption…and transformed itself as a result.
COLIN BRYAR and BILL CARR

STEVE JOBS INVITED JEFF BEZOS OVER FOR SUSHI.

It was the fall of 2003, which were consequential days for both Apple and Amazon. Only two years earlier, Apple released its first iPod and Amazon turned a quarterly profit for the first time. Now Steve was inviting Jeff, me (Colin), and another Amazon colleague down to Cupertino for a chat.

We arrived and were ushered into a nondescript conference room with a Windows PC and two platters of takeout sushi. Everyone chatted about the state of the music industry while doing some serious damage to the food. After dabbing his mouth with a napkin, Jobs segued into the real purpose of the meeting: He announced that Apple had just finished building its first Windows application. He calmly and confidently told us that even though it was Apple’s first attempt to build a Windows application, he thought it was the best Windows application anyone had ever built. He then personally gave us a demo of the soon-to-be-launched iTunes for Windows.

During the demo, Jobs talked about how this move would transform the music industry. Up until this point, if you wanted to buy digital music from Apple, you needed a Mac, which made up less than 10 percent of the home computer market. Apple’s first foray into building software on the competing Windows platform showed how serious it was about the digital music market. Now anyone with a computer would be able to purchase digital music from Apple.

Steve said that CDs—which Amazon sold many of—would go the way of other outdated music formats like the cassette tape. His next comment could be construed as either a matter-of-fact statement, an attempt to elicit an angry retort, or an attempt to goad Jeff into making a bad business decision by acting impulsively. He said, “Amazon has a decent chance of being the last place to buy CDs. The business will be high-margin but small. You’ll be able to charge a premium for CDs, since they’ll be hard to find.” Jeff did not take the bait. We were their guests, and the rest of the meeting was uneventful. But we all knew that being the exclusive seller of antique CDs did not sound like an appealing business model for Amazon.

Remember, this was 2003. The shift to digital had just begun. No one wanted to get in too early with a product that did not yet have a market. But no one wanted to miss the moment, either, and be unable to catch up. We knew that we’d need to invent our way out of this dilemma by obsessing over what the best customer experience would be in this new paradigm.

Did that meeting with Steve Jobs impact Jeff’s thinking? Only Jeff can speak to that. All we can say is what Jeff did and did not do afterward. What he didn’t do (and what many companies would have done) was to kick off an all-hands-on-deck project to combat this competitive threat, issue a press release claiming how this new service would win the day, and race to build a copycat digital music service. What he did do was take his time, process what he learned, and form a plan that revolutionized the company—and did the exact opposite of chasing Apple into the music-selling business. This is the story of the creation of the Kindle. We were there to help it happen: Colin started at Amazon in 1998, Bill joined in 1999, and we spent decades as senior executives working with Jeff. In developing the Kindle, we learned a critical lesson in business longevity—and in what it takes to define the change around you.

A FEW MONTHS AFTER that meeting with Steve Jobs, in January 2004, Jeff made his first move. He put Steve Kessel, Amazon’s VP of media retail, in charge of the company’s digital business. This seemed strange at first. Steve Kessel had been overseeing sales of physical books, music, video, and more—a core component of Amazon’s business. The company’s digital media business, meanwhile, consisted of a new “search inside the book” feature, plus an e-books team of roughly five people, which generated a few million dollars in annual revenue and had no real prospects for growth.

But there was wisdom here. Jeff wasn’t making a “what” decision; he made a “who” and “how” decision. This is an incredibly important difference. He did not jump straight to focusing on what product to build, which seems like the straightest line from A to B. Instead, the choices Jeff made suggested—even then!— that he believed the scale of the opportunity was large and that the scope of the work required to achieve success was equally large and complex. He focused first on how to organize the team and who was the right leader to achieve the right result.

Steve asked me (Bill) to join him in this new division, leading the digital media business team. I was hesitant. But then Steve explained Jeff’s thinking: Amazon was at an important crossroads, and now was the time to act.

Though the physical media business was growing, we all understood that over time it would decline in popularity and importance as the media business shifted to digital. In the beginning of that year, 2004, Apple announced that it had sold a total of more than two million iPods—and the proliferation of shared digital music files online had already prompted a decline in sales of music CDs. It seemed only a matter of time before sales of physical books and DVDs would decline as well, replaced by digital downloads.

Jeff was a student of history and regularly reminded us that if a company didn’t or couldn’t change and adapt to meet shifting consumer needs, it was doomed. “You don’t want to become Kodak,” he would say, referring to the once-mighty photography giant that had missed the turn from film to digital. We weren’t going to sit back and wait for that to happen to Amazon.

Continue reading your story on the app

Continue reading your story in the magazine

MORE STORIES FROM ENTREPRENEUR MAGAZINEView All

THE NAIL ENTREPRENEUR

“I’d like to see at least 100 The Nail Artistry salons operational across different countries around the world.”

5 mins read
Entrepreneur magazine
April 2021

The Asian Champion - CHATRI SITYODTONG, CHAIRMAN & CEO, ONE CHAMPIONSHIP

Chatri Sityodtong is the Founder, Chairman and CEO of ONE Championship, Asia’s largest global sports media property in history with a broadcast to over 2.7 billion potential viewers across 150+ countries around the world. Through the power of media and the magic of storytelling, ONE Championship is on a mission to unleash real-life superheroes, celebrate values, ignite dreams, inspire nations, and change the world. Chatri Sityodtong has an estimated net worth of US$350 million and will be the star of the upcoming edition of The Apprentice where 16 candidates will be vying to be the protege of one of Asia's leading entrepreneurs. Here’s the Thailand sensation on his self-made journey and how he’s redefining the future of martial arts.

7 mins read
Entrepreneur magazine
April 2021

Entrepreneurship Is a Mindset

I cofounded LinkedIn, invest with Greylock Partners, and host the Masters of Scale podcast. Take it from me: Success in entrepreneurship must begin in your head.

4 mins read
Entrepreneur magazine
April 2021

Credit to SMBs Not A Problem DIGITAL and Faster

Basis, achieving a high level of sophistication, compliance and trust from SMBs

7 mins read
Entrepreneur magazine
April 2021

This Brand Is Your Brand. This Brand Is My Brand?

Can you create a product that references, parodies, or uses parts from another brand? Many entrepreneurs are trying…and then getting sued. But the law is far from settled. This is the story of one startup that fought back and might just help change the way brands are built.

10+ mins read
Entrepreneur magazine
April 2021

This Platform is Enabling Peer-to-Peer Donation Seamless

Co-founded by actor Kunal Kapoor and Varun Sheth, Ketto’s motto is healthcare for all.

3 mins read
Entrepreneur magazine
April 2021

Will Startups IPO Be A Game Changer In 2021?

Securing Initial Public Offering (IPO) is the ultimate sought-after capital extension by startups. Successful IPO opens the floodgates for more capital and improvement in the overall startup economy. Despite the tumultuous times faced by the businesses in 2020 due to the COVID-19, the year 2021 saw some of the biggest runaway success listings so far, thanks to the high liquidity and solid investor sentiment.

5 mins read
Entrepreneur magazine
April 2021

Does Angel Funding Look Promising For Startups In 2021 Amid Ongoing Pandemic?

Ever since the world has been stormed by the coronavirus outbreak, economies across the globe have been in turmoil, with massive layoffs, shutting down of the businesses and cost-cutting measures have come into the light.

7 mins read
Entrepreneur magazine
April 2021

Rise of Social Commerce Startups During Pandemic

In recent years, India has witnessed a massive spike in the usage of social commerce platforms like Meesho, Shop101, GlowRoad and Bulbul

7 mins read
Entrepreneur magazine
April 2021

“Execution is Fundamental to Creating Value; Capital Cannot Substitute Speed and Innovation”

Learnability, having a strong organisational foundation, commanding leadership and thorough professionalism births legendary organisations

5 mins read
Entrepreneur magazine
March 2021
RELATED STORIES

HOW TO TEST-DRIVE VEHICLE TECHNOLOGY

New vehicles are brimming with technology that can enhance convenience, connectivity and driver safety. But the tech can also be unfamiliar to car shoppers, especially those who haven’t purchased a vehicle in the past five years or more. This poses a problem when it comes to the traditional test drive.

3 mins read
AppleMagazine
AppleMagazine #494

DESKTOP VS MOBILE: UPCOMING INNOVATIONS CHANGE THE GAME

Over the past decade, Apple has revolutionized personal technology with the iPhone and iPad, but the Mac range has seen stunted growth as a result. As the giant pivots towards its personal computing arm once more with the launch of the M1 chip, it’s time to prepare for innovations that could change the way you work for years to come.

6 mins read
AppleMagazine
AppleMagazine #494

Think Like a Disruptor

If you want to shake things up, you must have a mindset that’s different from everyone else’s. Here are three ways to reshape your thinking.

5 mins read
Entrepreneur
April - May 2021

BINDI USING NEW BABY TO BUILD EMPIRE!

CROCODILE kid Bindi Irwin and hubby Chandler Powell plan to build a worldwide business empire based on their newborn daughter, Grace, insiders tell GLOBE!

1 min read
Globe
April 19, 2021

How to create strong, secure passwords by learning how to crack them

It gets harder to crack a password if it’s 10 characters or longer—but complexity matters too, of course.

10 mins read
PCWorld
April 2021

Increase Online Engagement

3 Ways to Convert Your Website into a Sales Engine

3 mins read
Home Business Magazine
Spring 2021

Big Shift for Marketers

We’ve Seen the Future and There Are No Cookies

4 mins read
Home Business Magazine
Spring 2021

VOTE COUNTING TO START IN AMAZON UNION ELECTION

Vote counting in the union push at an Amazon warehouse in Bessemer, Alabama, is expected to start as early as Thursday, but hundreds of contested ballots could muddy the outcome if it’s a close race.

2 mins read
Techlife News
Techlife News #493

YOU: INTERFACE DEEPER INTEGRATION IS COMING, JUST FOR YOU

According to a new study from WhistleOut, the average consumer spends an eye-watering nine years of their lives looking at their smartphones, and that’s without mentioning the use of computers, televisions, and other devices that increasingly control our lives.

7 mins read
AppleMagazine
April 09, 2021

Everything We Know About For All Mankind Season 2 on Apple+

Ever imagined what would have happened had the Cold War space race never ended? What would have happened if the Soviets had been the first power to have a successful landing on the Moon? Well, you needn’t trouble yourselves anymore, as Apple TV+’s For All Mankind tells you exactly that. The show, created by Ronald D. Moore, Matt Wolpert and Ben Nedivi, was a hit for Apple when its first season debuted in November 2019. Today, we are discussing the show’s ongoing second season and the information we know about the announced third season.

4 mins read
AppleMagazine
April 09, 2021