What is Customer Obsession?

Uncategorized

Sep 4

Written By

Back in September, I wrote a post titled, Want to Start a Company? Work at a Big One First with the intent of exploring the Amazon Leadership Principles from a startup’s perspective.

What I realized soon after writing that post, that my customer was me, and so I obsessed over myself for a bit, focusing on mental and physical health, and time passed.

A bit more time than I meant. Ah well, things happen…

What are the Amazon Leadership Principles?

They are 14 guiding principles by which every decision is made at Amazon. They permeate the language and actions of every Amazonian. Ever wonder why Amazon seems to out innovate everyone (sometimes even startups)? Look no further than the Leadership Principles.

Does that mean you should copy them or create your own?

Hell if I know. They work for Amazon, and there are lessons to be learned for every founder out there. Remember, they have been built and designed and rewritten and deleted and added over 20 years. Just in my time at Amazon they underwent a couple of changes.

What I do suggest is copying the purpose: providing your team a guide.

Customer Obsession

Customer Obsession is the only Leadership Principle that is slotted based on importance. It is first, the rest are just there.

Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.

Notice the first word: leaders. The very first word of the very first (and most important) leadership principle is LEADER. That is how Amazon wants it’s employees to see themselves. A leader makes decisions. A leader takes ownership. A leader has responsibilities.

Also, notice it never says the customer is always right. They aren’t. What’s more important than pleasing a customer? Earning and keeping their trust.

Look at the first sentence. “start with the customer.” When making a decision, what does a leader do? They begin with the needs of the customer and work backwards. This concept is the one that most founders miss. We explore problems that we believe need solutions. We scratch our own itch. We look at market sizes and trending technologies. As Aviel, who is one of the best investors in the Pacific Northwest says:

[embed]https://twitter.com/aviel/status/1036447406198386688[/embed]

It’s easy to assume that Amazon knows it’s customer. It’s everyone, right? But it’s not. AWS has a different customer than retail. Each retail item has a different customer. Advertising, devices, video and each product line has a different customer. How does Amazon solve for that?

“Working Backwards vs. Skills Forward”

There is a belief at Amazon that if you can correctly identify a customer need, you can build the right solution and always innovate.

In Jeff Bezos’ 2008 Shareholder Letter, he wrote:

If we can identify a customer need and if we can further develop conviction that that need is meaningful and durable, our approach permits us to work patiently for multiple years to deliver a solution. “Working backwards” from customer needs can be contrasted with a “skills-forward” approach where existing skills and competencies are used to drive business opportunities. The skills-forward approach says, “We are really good at X. What else can we do with X?” That’s a useful and rewarding business approach. However, if used exclusively, the company employing it will never be driven to develop fresh skills. Eventually the existing skills will become outmoded. Working backwards from customer needs often demands that we acquire new competencies and exercise new muscles, never mind how uncomfortable and awkward-feeling those first steps might be.

This is a common fail point for startups. We are resourced constrained, so we look to do with what we have. A bunch of iOS developers? Build an app. Founder has built three fintech companies? Do that. We tend to start with the skills we have at hand, rather than work backwards from the customer need.

Amazon has built a process for this, often called Working Backwards:

[embed]https://www.youtube.com/watch?v=7ALs7i-2eaQ[/embed]

Obsessing on Customers vs. Focusing on Competitors

Inherent in the last sentence of the leadership principle is focus:

“Although leaders pay attention to competitors, they obsess over customers.”

So often, we spend our time worried that we are going to get beat by an unknown competitor or big company. We have all these sayings about speed: Fail Fast. Go Fast and Break Things. Do More Faster. First Mover. We use Sprints to build product. Race metaphors abound.

The message here is simple. If you understand your customer’s needs and focus on them to the point of obsession, you 1) don’t have time to obsess on the progress of your competitors; and 2) don’t need to. Why? Because you will capture and retain your customers by giving them what they need. Simple.

What are the lessons here for startups?

Everyone on your team is a leader, and should be expected to act like one;
The customer isn’t always right; focus on their needs;
Working backwards from the customer versus forward from your skills drives innovation and long-term success;
Spend your brain power on your customers, not your competitors.