Jason Del Rey of Vox — formerly Recode; I haven’t settled on an attribution format yet — interviewed a bunch of people involved in the creation and growth of Amazon Prime, and it’s a fascinating story. I found the following particularly compelling (Vijay Ravindran is the former director of ordering, and Julie Todaro is the former director of finance):
Ravindran: There was a separate set of angst for people on the business side. Shipping revenue was part of the profit margin when Amazon sold goods. If you’re a retail category manager being measured on contribution profit for the quarter, your goals are aligned against that. If only the very best customers at Amazon signed up for Prime and then they took full advantage of free two-day shipping and did not have to pay, then that was going to add up pretty quickly.
Todaro: But the lovely thing about Amazon is that it doesn’t panic and overreact in those moments. Jeff wasn’t surprised. He’s probably the smartest man in the world. So we sort of held firm and kept looking at the shopping behavior.
While it’s an unbelievably analytical company, it doesn’t live or die by what the numbers say. Jeff just saw the strategic benefit of Prime and he saw the value to customers.
Whereas, I think at some companies they would say, “Yep, customers are doing what we want, but it’s a little too expensive. So let’s kill it.”
There’s something about services that operate at the speed of Prime that is completely magical. It truly feels like a promise of the future: whatever you need, delivered in as little time as possible to your door. It is not without its problems — Del Rey cites a designer requiring 120-hour work weeks to meet Jeff Bezos’ deadline for the service, which is unconscionable. But a service like this is so good that I hope working conditions can be improved and antitrust concerns can be alleviated.
Above all, the thing that stands out most to me as captured in the above excerpt is how it’s entirely about how the service feels. It’s a long-term bet, and it sounds financially catastrophic on first blush, but I wish more companies with the ability to do so would aim for a similar feeling of doing the impossible — not just in shopping, but in everything they do.