Let’s do a “Jeff Bezos”!

Ny bild (23).pngWe aim high with this course and hope you share our ambition. Like Jeff Bezos once did, we will teach you how to analyze mega trends to find new potential goldmines, what value networks to aim for and how to create value within targeted roles. View the old interview with Jeff Bezos and analyze the approach he used to find and leverage on a potential value network role and market opportunity. Give your views below as a comment. Please use your real name (or an alias so we can understand who you are, like Pelle K or Stina R) and use a real and active e-mail (will not be publicly visible). The first comment you do here will need approval, so it may take a few hours before you see the comment.

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30 responses to “Let’s do a “Jeff Bezos”!

  1. Jeff Bezos created a business plan from a simple market analyse and started creating “real value” for the customer. The result – generation of the biggest online shopping platforms currently existing.
    I hope to stumble across such an potential value in the future as well to create my own business.

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  2. From the interview, it is inferred that he used a quantative approach to find the “potential goldmine”. Through analysis, he observed and acted on a tremendous projected growth of a market niche by trying to figure out how one could capitalize and “ride” on that trend. By bringing a market space to the growing platform (internet was by no means defined by its commercial proposition value at that time), he – in a sense – created a value network rather than “hitch on” to one for exploitation.

    As evident, Amazon did greatly by observing that some market spaces on demand were constrained in a physical sense, but made possible through the opacity that the internet provides. (The customer needn’t worry about networks of whole salers or distributions. They are only exposed to the “click-n-buy” store front). By selling more titles than what’s possible in a physical store, Amazon.com instantly positioned itself as an important player in terms of “ease of use”, as you could provide all types of literature from one point of purchase.

    In summary, I believe it was a data driven discovery coupled with a great sense of how to exploit current market weaknesses through new innovation that propelled Amazon.

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  3. Jeff Bezos saw the business opportunities that came with the rapidly growing user base that internet brought. He also saw the benefits of e-commerce, such as not having their own warehouses. With that, I think he is a good example of what bussines creation is.

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  4. Worth highlighting is that Jeff in a sense describes that a great product and costumer value also has a time dimension. That it has to act coherently with global trends and industries.

    So in a core sense he owes the success of Amazon not just to the possibility of creating a new market place, way of shopping, and distribution network, but by doing so in a timely fashion thanks to data regarding mega trends.

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  5. Jeff Bezos approach was to make use of extraordinal high statistical market growth linked to a high propability to be a future mega trend with a business plan suitable to that specific market.
    Therefore, it was necessary to analyse what makes this market so innovative and disruptive. This gave him the opportunity to model a business that fulfils customer needs which were not able to be satisfied before. In this case giving the opportunity to get almost every single book from one (internet) platform, wherever this person is, by disconnecting from a physical space.
    A good indicator to evaluate the high costumer value is in this case that amazon was distributed fastly by viral marketing.

    Important for the success of Jeff Bezos was that he did enter the market in an initial state.

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  6. Besos identified that the potential value network online was tremendous by the growing online usage statistics. He then used a simple business analysis to identify the best type of product to sell online. The analysis seemed to be centred on which product that could create more value by being sold online instead of in physical stores, i.e. which product that had the best potential value network. The result was books, and an online business model that actually did build a new type of value network. This business model consequently resulted in one of the largest online shopping platforms of today.

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  7. Jeff Bezos could by the help of statistics identify internet usage as a growing trend. He then did analysis on what product would be most beneficial to sell online, identifying two important factors: being able to sell large volumes and adding value to the customers. And if one analyses how the news about Amazon spread, it becomes clear that his approach on finding and leveraging on a market opportunity was very successful.

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  8. The interview describes how Bezos identified a huge surge in internet usage, and realized that this sudden (and ongoing) increase meant that new business ideas could flourish.

    Perhaps more interesting than the story of how he then went of to start Amazon is what he mentions around the 4:20-mark. He talks about online marketing and how it offers great potential in that it allows for tracking and statistics on a new level. Google was founded 1 year later, but didn’t introduce their ad-network until 3 years(!) after this interview.

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  9. After coming over the statistics that web usage was rapidly growing he set his mind on finding a business plan with a web based platform. Bezos stated in the interview that “if something can be done the traditional way, then it should”. By having an online book store he could do what no physical book store could do and sell more book titles, making his idea unique. His idea was new and innovative which lead to a customer value.

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  10. By identifying the internet mega trend and anticipating its future impact on society Jeff Bezos decided to build a new type of value network. He analysed the market regarding which products required this larger network, i.e. where this new network/marketplace would add the most value, and relied on scale (and being early on this market) to make it profitable. He chose books as his primary product but the product range of Amazon today is enormous. The network gave so much value to its customers that Amazon could rely on the network to do much of the company’s initial marketing.

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  11. In 1997, the web was not globally known and used, thus Bezos may have seen this as a perfect time to seize the opportunity to create a business that was different, even evolutionary. Cool, but what? And somewhere along the way books may have seemed to be a product that fit well into the specific characteristics that online shopping requires and where its especially beneficial. Possibly it all started with a thorough analysis of what product could be applicable to the conditions of online shopping, how they come about and all the way to how they end up in the hand of the consumer, which ended up being books. Combining a well known product and a new way of distribution seemed to provide more efficient structures, create synergies and possibly(most probably) open up opportunity to outrun the current competitors and become the worlds best book provider.

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  12. The formula for Bezos approach to launching Amazon.com can be summarized in the following three steps:

    1) Identify a strong trend (Web growth)
    2) List 20 products that can be exposed to the trend (books, cd’s etc.)
    3) Identify the product best suited for the trend (a book store with millions of titles can only exist online)

    Other interesting principles:
    Bezos did not launch a site selling all 20 products, not the top 3 products. He went for the number one and focused all his efforts on that.

    The best marketing is word of mouth. If you deliver something innovative and truly valuable, people will tell their friends and newspapers will write about you.

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  13. Jeff Bezos saw the potential of the growing web and chose to start his web-based business with a product that he found had unusual advantages.

    By using a wide network of distributors, he build a business model satisfying all customers’ needs which no one else did during that time. He created something new and innovative. Through this, he captured attention and a value network arose and his business was spread through word of mouth and resulted in success.

    Nowadays, he finds add advertisement being successful, with its ability to track the add’s effectiveness. With the obtained statistics, the advertisement and also the products can be developed further to better fit the customers demand.

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  14. It was by mere coincidence that he stumbled across those numbers however, he was very clever to act upon their potential. That is probably what differs most entrepreneurs from the rest, seeing possibilities and not letting opportunities slip away because of risk. Another thing that really helped his success as he mentioned was the free growth thanks to the word of mouth. It is extremely hard competition on the digital market since the information spreads fast, especially when there is a good idea on the rise. By creating real customer value and therefore saving a lot of money on otherwise expensive growth campaigns one can channel all the budget on their value creation instead which puts them on an advantage compared to competition.

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  15. The founder of Amazon.com, Jeff Benzo, developed the business idea by using statistical data to identify a huge trend that was emerging, the rapid growth of web usage. This unexplored market hold a lot of potential which he wanted to take advantage of. He then made a list of products that could be sold online and based the selection criteria on currently unfulfilled customer demand. Products with lot of varying and unique types for example books or music were suitable for this market opportunity. This kind of products are hard to have a large inventory of because there are so many. Based on this knowledge Benzo created a business plan where customers could order any book that they find suitable online and have it delivered. This was a new and innovative approach to book selling and satisfied a previously unfulfilled market niche.

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  16. Through analyzing trends, Jeff Bezo was able to distinguish a great business opportunity, which although needed some innovative thinking to optimize the execution. By being creative in combining his knowledge about different markets, he was able to execute a business venture based on existing ideas, but in a way which was not ever used before. He did not invent internet, online stores nor books, but his constellation of these ideas ended up in this innovative business approach. By developing this business model and adapt it into a successful online book store he almost pivoted when he started to sell several other products and initiated partnerships. This consequently led him to a position where growth in terms of revenues grew rapidly as well as the net losses which although could be considered as logical due to the mere nature of company growth where necessary acquisitions might generate large short term costs. However could one suggest that the decisions regarding the future of Amazon, were based on the same logical reasoning as they were in the very beginning.

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  17. I believe that the biggest takeaway from the interview is timing. You can have an awesome idea, but it’s hard to make it work if your timing is bad. And Jeff’s timing couldn’t be more precise. He started Amazon.com during a period of time where the web usage was increasing drastically and he was able to create convenience and value for customers by offering something different. Jeff took the simple concept of a physical book store and made it pretty much infinite. He could offer millions of books that where just a click away. I also thought that it was cool when he talked about “almost in-time inventory”, where Amazon was able to receive books from wholesalers and within a day they would be able to ship them from their dock. But I’m curious to why Amazon isn’t relying on dropshipping instead. Maybe it’s to keep an even quality throughout the whole organization?

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  18. Jeff Bezos saw a market opportunity arise with the increasingly growing internet use and acted on it. More people using internet means more potential customers. Bezos chose to exploit the fact that the category books contain more items than any other product category, which gave his internet store an advantage vs physical bookstores. He built a store that couldn’t exist in any other way than the form he created. The best selling books was in Amazons inventory but the rest could be delivered fast from wholesalers and distributors and in more rare cases even directly from the publishers. This close and actually quite unique network of suppliers provided the customers with real value and therefore amazon could be spread by word of mouth. They also started using online advertising which was a relatively new thing and was a form of marketing nirvana where the customer’s clicks could be directly connected to company profit.

    As a whole Bezos saw that the electronic commerce was growing and he owns some of his success to the timing on which he acted.

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  19. Bezos stated that he saw tremendous growth in the usage of the Internet and judged it as a trend, and basicly found a way to make money out of the growing traffic online. While it can seem obvious in retrospect, there is never at the time a failproof way of telling what’s a fad and what’s going to be a revolution of sorts. Bezos correctly found not only what was a true trend, but also succesfully analyzed on with what to start with (books) and what to pursue later.

    Combine this analysis with successful logistical arrangements and amazon was an early winner. The second part of this must not be overlooked, the world is full of early visionaries who failed at the more mundane tasks.

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  20. Bezos stated that he saw tremendous growth in the usage of the Internet and judged it as a trend, and basicly found a way to make money out of the growing traffic online. While it can seem obvious in retrospect, there is never at the time a failproof way of telling what’s a fad and what’s going to be a revolution of sorts. Bezos correctly found not only what was a true trend, but also succesfully analyzed on with what to start with (books) and what to pursue later.

    Combine this analysis with successful logistical arrangements and amazon was an early winner. The second part of this must not be overlooked, the world is full of early visionaries who failed at the more mundane tasks.

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  21. Bezos saw a new potensial market and took the opportunity to create something traditional in a totaly new way. He was smart and took a category with many items-books. With his relative small inventory in perspect to how many books they have in their “calatlouge” they can keep a big catalouge with low inverntory cost, smart! Also he realized that value for the customer is really important.

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  22. Jeff Bezos realised that internet and web usage was growing in a remarkable pace and figured that he could use that as his advantage to create a business. By analysing the market he realised that selling books online could be done in a more effective way than the traditional way. Bezos emphasises that it is important to focus on something that has real value for the customers. If it has real value, the customers will talk to each other about the business and you can then take advantage of “word of mouth” to advertise your business which worked well during the late 20th century. What made Jeff Bezos business plan successful was the fact that he analysed the existing market and created a new more effective market on the internet that could not be done in a traditional way. He took advantage of the way of thinking in the late 20th century and could therefore create real value for the customers.

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  23. What got Jeff’s mind going was the realization of the growing macro trend – the internet. Combining this with the insight that internet can be used for e-commerce, Jeff started out analyzing the potential in 20 different products that could be sold through this new marketplace.

    What he quickly realized is that the market size for books is dire. Its sheer size combined with the unexplored benefits of e-commerce (such as limited physical stock) meant that great customer value could be created. The latter is also something he highlights as critical for organic growth.

    I believe Jeff’s method for success can be summarized in three steps:

    – Identification of macro trend
    – Identification of product exposed to said trend. E.g through looking at market size.
    – Business conceptualization with outset in product and macro trend. Trying to create customer value with said product through leveraging the trend.

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  24. Bezos identified a gap in the market, where a demand existed (even if it was never clearly stated). By identifying this, in addition with the rapid expansion of the internet enabled a new form of business opportunity, which Amazon became an example of. Timing and capitalising the opportunity is the key. What I find to be the most interesting remarks, is how they managed to grow so fast using only word of mouth in the beginning. That just shows how powerful this method can be if you create a strong product with high value.

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  25. Bezos realised that what you sell, and where you do it is the most important, but rather that you connect the right product(s) with the most fitting place to sell them. I am confident that selling books was not a long time dream of his, but it was during this time, the product that he thought would provide the most success. Bezos started with identifying the huge potential that e-commerce had, and still has, before deciding on the product. By realising and taking advantage of the fact that he could create a unique store with more titles in the catalouge than any other physical store could possibly have, he created a very successful business.

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  26. In agreement with above comments, Jeff Besos was able to correctly identify a macro trend in the growth of internet usage. He leveraged this knowledge by cleverly creating a online store with a range of products not found in any pre-existing store. This enabled him to re-draw the market and position Amazon in a unique way compared to the contemporary competitors. Combined with the convenience of online shopping in general, Amazon was able to create value not previously available to customers.

    While the identification of the trend and the development of Amazon is fascinating, there is a quote in the video that is more interesting than the rest. Besos states “..attention is a scarce resource at the end of the 20th century”. It might have been true back in 1997 but it is also an amazing foreshadowing of today. Here, in 2017, we are exposed to new exciting ideas and products daily but somehow there is a sense that we never see them come to fruition, or even fail to remember them at all. Our attention span to a singular idea or product is so short that we fail to register any commercial interest for it. And this begs the most interesting question of them all. What’s required in the early 21th century to capture the attention of customers long enough to be able to capitalize on a new innovation?

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  27. When coming across the statistics of how fast web-usage was growing Jeff understood the potential of the market. He decided he wanted to make a profit from this trend through creating an electronic commerce. He found his niche in selling books. The large number of tiles meant that only a web-store could gather them all at one place. Through Amazon Jeff created a network with wholesalers, distributors, and publishers making it possible for customers to access books in a completely new way. There are a lot of factors that have to be right to succeed with a business. One thing is to capture a market trend but another is to stay competitive in the long run. Amazon was good in timing but also had a value-offer that worked over time.

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  28. Bezos came across statistics that the internet was growing rapidly in the early 1990s and tried to utilize that growth to create a business. He then identified different products to sell and eventually chose to sell books online. One of the main reasons was that the number of items were far greater than in other markets. You could “store” a far greater number of books compared to traditional book shops and therefore get a competitive advantage. This strategy/development might sound easy and straight-forward today but Bezos was very clever when he chose to start with books after identifying the macro trend. Amazon has since continued to develop and added more product to create a bigger value and is now the biggest internet retailer in the world by total sales and market cap.

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  29. It is clear that Bezos’s main goal was to add real value to peoples lives and not just creating a business for the sake of it. By adding real value, the customers will come to you and the customer base will expand due to the word of mouth and media exposure. Bezos also mentioned that Amazon was doing something “new and innovative”. He realized that innovation drives adaptability and long-term survivability. He demonstrated this in the yearly years of Amazon by not going from 250 000 titles in an analog bookstore to 300 000 titles in an analog bookstore. He went to 2 500 000 titles in a digital bookstore, essentially transforming Amazon to a data company in order to solve problems that didn’t exist at the time.

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  30. Pingback: Major future business opportunities – final presentations | Business Creation 2017·

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