Every organization has limitations that stunt long-term growth. There are important lessons that can be learned from how Amazon approaches eliminating its blockers for growth.
In my last blog post, I shared that when Acquia was a small startup, we were simultaneously focused on finding product-market fit and eliminating barriers to future growth.
In that light, I loved reading Eugene Wie's blog post called, Invisible asymptotes. Wie was a product leader at Amazon. In his blog post he explains how Amazon looks far into the future, identifies blockers for long-term growth, and turns eliminating these growth barriers into multi-decade efforts. As Amazon shows, eliminating barriers to growth remains very important long after you have outgrown the startup phase.
For example, Amazon considered shipping costs to be a growth blocker, or as Wie describes it, an invisible asymptote for growth. People hate paying for shipping costs, so Amazon decided to get rid of them. At first, solving this looked prohibitively expensive. How can you offer free shipping to millions of customers? Solving for this limitation became a multi-year effort. First, Amazon tried to appease customers' distaste for shipping fees with "Super Saver Shipping". Amazon introduced Super Saver Shipping in January 2002 for orders over $99. If you placed an order of $99 or more, you received free shipping. In the span of a few months, that number dropped to $49 and then to $25. Eventually this led to the launch of Amazon Prime in 2005, making all shipping "free". Members pay $79 per year for free, unlimited two-day shipping on eligible purchases. While a program like Amazon Prime doesn't actually make shipping free, it feels free to the customer, which effectively eliminates the barrier for growth. The impact on Amazon's growth was tremendous. Today, Amazon Prime provides Amazon an economic moat, or a sustainable competitive advantage – it isn't easy for other retailers to compete from a sheer economic and logistical standpoint.
Another obstacle for Amazon's growth was shipping times. People don't like having to wait for days to receive their Amazon purchase. Several years ago, I was talking to Werner Vogels, Amazon's global CTO, and asked him where most commerce investments were going. He responded that reducing shipping times was more strategic than making improvements to the commerce backend or website. As Wie points out in his blog, Amazon has been working on reducing shipping times for over a decade. First by building a higher density network of distribution centers, and more recently through delivery from local Whole Foods stores, self-service lockers at Whole Foods, predictive or anticipatory shipping, drone delivery, and more. Slowly, but certainly, Amazon is building out its own end-to-end delivery network with one primary objective: reducing shipping times.
Every organization has limitations that stunt long-term growth so there are important lessons that can be learned from how Amazon approached its blockers or invisible asymptotes:
- Take the time to correctly identify your long-term blockers for growth.
- Removing these long-term blockers for growth may look impossible at first.
- Removing these long-term blockers requires creativity, innovation, patience, persistence and aggressive capital allocation. It can take many initiatives and many years to eliminate them.
- Overcoming these obstacles can be a powerful strategy that can unlock unbelievable growth.
I spend a lot of time and effort working on eliminating Drupal's and Acquia's growth barriers so I love these kind of lessons. In a future blog post, I'll share my thoughts about Drupal's growth blockers.
— Dries Buytaert
Dries Buytaert is an Open Source advocate and technology executive. More than 10,000 people are subscribed to his blog. Sign up to have new posts emailed to you or subscribe using RSS. Write to Dries Buytaert at firstname.lastname@example.org.