Dan Rose Profile picture
12 Sep, 11 tweets, 2 min read
Amazon launched in July 1995, and every Xmas was a near death experience for the first 7 years. I joined in ‘99 and got to experience this first hand. Starting in late Nov, all corporate employees were shipped to fulfillment centers to pack boxes for 6 weeks. Here’s what I saw:
Despite efforts to plan ahead, the company literally couldn’t keep up with holiday demand. 40% of all annual orders would come through in 6 weeks from Thxgiving through New Years. Ops teams would start planning in Jan, but by Sept they were always massively behind.
As “earth’s most customer centric company,” failing to deliver presents for Xmas would have been like Santa missing his deadline. But when demand exceeds even your most aggressive forecasts, it’s a physical world problem that requires physical world solutions - ie human bodies.
Xmas ‘95, every employee including Bezos packs boxes for 6 straight weeks, then vows to never let that happen again. 1996 - corporate staff joins warehouse staff and they barely squeak through. Same story in ‘97 and ‘98. By the time I joined in ‘99, it was an annual tradition.
Picking items, packing boxes, wrapping gifts for 10 hours / day x 6 days / week is fucking hard work. I have immense appreciation for the people who do these jobs. Your legs ache, your eyes go blurry. Repeating monotonous tasks over and over again w no natural light. Exhausting.
Also extremely disruptive to the business. Imagine if every engineer, salesperson, finance and HR, etc from your company left the building for 6 weeks. All at the same time. Year after year. If you don’t do it, the business could die. If you do it, the business might die anyway.
This became an existential problem for Bezos. He hired a bunch of ops execs from Walmart to fix it, but they kept failing. Then in 1999 he hired an exec who came out of manufacturing, not retail. Jeff Wilke had 2 major insights that stopped the bleeding within a few years:
1/ Shipping individual boxes to individual homes looked more like manufacturing than retail. It required a full re-think on workflows and process engineering. This is when Amzn started referring to their warehouses as fulfillment centers (FC) rather than distribution centers (DC)
2/ When corporate employees from Seattle parachuted into FCs for 6 weeks and then disappeared for 11 months each year, it was massively de-motivating for FC workers. Wilke put on a flannel shirt and talked about growing up in a blue collar family. He empowered and inspired them.
By Xmas ‘02, not a single corporate employee was required to pack boxes. Hooray! Wilke was worried corporate employees would lose their connection to this vital part of the business, so he created a program where every employee would some spend time in the FCs or customer support
The annual fire drills ended, the existential threat was conquered, and the rest is history. Several years later, Wilke was promoted to CEO of Amazon Retail. Last month he announced he’ll be retiring in January 2021, after the company gets through one more holiday season. Legend.

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More from @drose_999

17 Oct
In 2004 I had an offer to join the new Kindle team at Amzn and I jumped at the oppty. I was on our retail team at the time -> Kindle was new/sexy. But a week before I was scheduled to start my new job, I was told to stay put and I learned an important lesson. Here’s the story:
2 years earlier I had been given P&L responsibility for Amzn’s cell phone store. We sold phones + plans (like Car Warehouse and Best Buy). This was Amzn’s highest margin biz, but it was tiny and not growing and I was told it could get shut down. I had 6 mos to turn it around.
The industry model at that time was give phones for free w/ service plan attach. I reinvested the service plan margin to make phones less than free, and rev growth exploded. GM % plummeted, but profit $ went way up. My little biz was our fastest growing segment at Amzn!
Read 10 tweets
3 Oct
In 2008 Facebook’s user growth hit a wall at 80M and we were having serious debates about whether any social network could ever reach 100M users. 2 years later we had doubled our user base and not long after that we reached 1B users. Here’s how we did it:
I joined FB in summer ‘06 when we had 7M users and were adding 5k/day. Over the next 18 months, Zuck shipped News Feed, Open Registration, Platform and community-led translation. By end of ‘07 we had 70M users and it seemed like we couldn’t be stopped.
Towards end of ‘07 I helped raise our Series C at $15B valuation. We had <400 employees and only $250M revenue, but we had explosive user growth and powerful network effects. Our entire valuation was based on how fast people were signing up for FB all over the world.
Read 13 tweets
19 Sep
May 18, 2012 - there was a crisp blue sky at FB’s campus as we rang the opening bell. Emotions ran high as we took a brief moment to celebrate our hard work. The stock traded up for the first few hours. Then it traded down for the next 12 months...
Facebook’s IPO coincided with a paradigm shift in technology. The majority of our usage and revenue transitioned from desktop to mobile practically overnight. Facebook’s journey to a mobile-first company started with a strategic error and ended with a pivot. Here’s the story:
Mobile initially presented us with a number of challenges, and our instinct was to innovate our way around them. The heart of our strategy was HTML5, which turned out to be a flawed approach. We spent 2 years sprinting down the wrong path before reversing course. Why?
Read 16 tweets
4 Sep
I dropped out of b-school to join Amazon July ‘99. By Dec Amzn’s stock had doubled, Jeff was Time Man of the Year. Then March ‘00 internet bubble popped -> my stock options were underwater and Amzn faced bankruptcy. Yet dropping out was the best decision I ever made. Here’s why:
I needed a pattern interrupt. My life had been conformist up to that point - straight A’s, awards, Harvard, b-school. But business is messy, life is messy. I knew deep down I needed to mess stuff up, get outside the box. I’ve tried to maintain that mentality ever since then.
Shortly after I started my internship at Amzn, I asked CFO Joy Covey if she thought I should drop out of b-school to stay on full time. She said I would learn more on the job than in school (she had dropped out of high school). She was right, you can’t learn biz in a classroom.
Read 8 tweets
21 Aug
In 2002 I was working in Amazon’s retail division. We were organized by department - books, CDs, electronics, etc - and a separate dept for products sold by 3rd parties. Then Bezos decided 3rd party should appear next to 1st party on the same product page. Here’s what happened:
Amzn launched 3rd party biz right after I joined summer 1999. Started w auctions, competing directly w eBay. Added fixed price when eBay acquired Half. Despite a ton of cross-promo, nobody visited the 3rd party store. eBay had buyer/seller network effects. Amzn couldn’t compete.
By 2002 most people thought we should shut down 3rd party biz. It wasn’t working, consumed a lot of resources, good people were on it, big distraction. At the same time, core retail biz had decelerated to single digit growth after we raised prices to stop bleeding cash.
Read 12 tweets
8 Aug
A few months after I joined Facebook in 2006, we shipped the 2 most important products in FB’s history: News Feed + Open Registration. A lot of smart people thought these moves would destroy FB. Instead, they transformed the company and cemented Zuck’s leadership. The backstory:
News Feed shipped first. In 2006 there were no feeds (other than RSS), NF was a novel product idea. Websites were measured on page views back then, and NF was designed to reduce PVs by eliminating the need to click around profiles. Less PVs = less ad impressions, seemed crazy.
Mark described FB as a utility, and NF was central to his vision. It showed info you could already see on people’s profiles, but organized efficiently on the home page. And stories would be ranked based on what people found most interesting. This was a massive change.
Read 10 tweets

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