I always find Jeff Bezos speech very rich and everytime he speaks, he comes with new metaphors and relates growth of amazon to ideas that prevail/prevailes all around. The graphical outlines that he used at the Legg Mason(unfortunately link not working!) is a solid example of his deep thought process framework.Venky Ganesan blogs about recent Jeff Bezos presentation at Stanford Entrepreneurship conference 2005. Excerpts :
Jeff Bezos of Amazon talked about historical innovations and innovators.Some of his examples were:
1.The guy who invented toilet paper
2.The woman who invented windshield wipers - prior to her invention people just stopped every mile or so and wiped the windshield
3.The woman who invented "white out" - she was an executive assistant who made a lot of mistakes while typing and was annoyed there was no quick way of correcting her mistakes. By the way "white out" was nothing but white paint - just shows you don't have to always invent cutting edge stuff to be successful.
Then he talked about Amazon and the culture of "innovation' within Amazon. He said the two important factors that help drive innovation at Amazon are:
•Cost of Experimentation is low - its easy to run experiments in an online business and check to see effectiveness. Amazon runs experiments all the time and evaluates which of his innovations are more effective
•Cost of failure is low - again another terrific element of online businesses is that the cost of failure can be controlled since you can run these experiments without a significant cost if it fails.
The combination of these two factors also result in an open non-hierarchical organizational culture at Amazon.Even front-line folks can run a experiment since the cost of doing and the cost of failure is low.
Venky points out that these two factors are not unique to Amazon, they apply to all online businesses and good online businesses take advantage of them. I agree - we have seen several reports of google encouraging employees to indulge in their pet projects and offerings like gmail are said to be a direct output of such efforts.