Amazon Is Huge Because It Started With A Great MVP
Whenever you talk to someone about launching a business, they have these dreams of starting a massive company. Their product is going to be the next Instagram or SnapChat or Uber.
Maybe it will be, maybe not. That depends on their timing, execution skills and a host of other factors. The problem is that most first time CEO’s won’t let the world see their product until it’s as polished as the tech giants of the day.
And that, my friend, takes time. Years of work with a lot customer feedback and a lot of money. If you want to launch your startup on day one with hundreds of features to directly compete with the Facebook’s of the world, you’re never going anywhere.
Hell, you’ll probably never even launch.
You need to start somewhere, and you need to launch at some point. Some point way before you’re competing on the same level as a billion dollar public company. Look at Amazon. They are the largest retail outlet, ever, accounting for over half of the Cyber Monday transactions. They basically mint money with Amazon Web Services, the backbone for most of the internet.
Now, when you look back at the history of Amazon, they didn’t just hit the scene with all of this. Not even close. When Amazon started, it was just an online book store. “Books on the internet” was the entirety of Amazon when they launched.
Jeff Bezos had this vision of building a massive empire, “The everything store” as we now know it, but he’s a smart guy who knew that was an impossible thing to successfully do on launch day. In an age when people didn’t trust the internet, and not everyone had an email address, it was a lot to ask for.
Not to mention the significant lack of a supply chain for entire product categories. So Bezos and team chose something simple to get started: Books. Easy to buy, easy to ship, not a big investment for the consumer. Really, a great MVP -- minimum viable product.
So Amazon.com was born with a product listing of tons and tons of books. When you ordered, they bought straight from the distributor and shipped it to you.
They got it launched and earning some money, then in the true spirit of a minimum viable product, they kept iterating on it. They made it better and better and better, each time driving costs down and margins up. Each time, delighting more and more customers. Each time, growing bigger and bigger.
Eventually this evolved to the everything store that we know and where we spend a ton of money.
Amazon got so good at iterating on their products to make their operations more efficient that they decided to sell access to some of those tools to other tech companies that needed that sort of thing. Boom! Amazon Web Services was born.
It started with a single offering (S3, or Simple Storage Service) and ballooned into a monolith that basically mints money by powering a majority of the internet. There are competitors to AWS now, but it’s still the single most valuable tool in the modern CTO’s toolbox.
The moral of the Amazon story is you have to think big and dream big, but that’s not enough. You need to thoroughly plan your MVP, and you need to build it. Then launch it to the world, get feedback and keep improving until it’s exactly what you dreamed of.
Doing too much will leave you in the graveyard with Pets.com. Being smart about your MVP, well, you know how big that can take you.