Behind-the-scenes story: Why did the Amazon mobile phone dominated by Bezos fail?

Note: The original text is from FastCompany and compiled by Tiger Sniff.

"What the hell is going on?"

It was/kloc-a cold day in downtown Manhattan in early February. Amazon CEO Jeff? Before Bezos was seated on the stage, the people who participated in the group interview couldn't wait to throw out their own questions. This is the problem that 400 participants in this science and technology conference talked about. Nevertheless, the scene is still awkward. Bezos was vague and tried to prevaricate, but his questioner was Henry, editor-in-chief of BusinessInsr. Henry blodgett just wouldn't let go and asked again, "So, Jeff, what happened to the FirePhone?"

The ambitious release of FirePhone last summer was widely regarded as a fiasco. The original price of this machine, which is designed to compete with the iPhone head-on, is $65,438+099 (contract required), and now the price is only $99. Amazon's book impairment has reached $65.438+$700 million, largely due to a large number of unsold FirePhone inventory machines. Although Bezos finally answered this question, this is basically the reason that investors, customers and experts expected him to say: Amazon will invest more resources in mobile phone products. Bezos dismissed FirePhone as a "bold bet", explaining that the model "will have many updating iterations" and it will take "several years" to improve. In other words, just as Amazon started selling products other than books in the late 1990s, and launched Kindle reader and cloud computing business AWS around 2005, Amazon will invest in the future, unfortunately, short-term stock investors. This set of rhetoric has made Bezos very useful in recent years, which well explains the status quo that although the company has developed into an e-commerce giant, it has almost no profit.

But this answer has not satisfied Wall Street recently. Last year 10, Amazon's quarterly report showed a net loss of $437 million, the highest since 14, which shocked investors. Although revenue reached $20.58 billion in the quarter, the company's growth rate is slowing down, which was once a bright spot for those who were worried about Amazon's insufficient profits. Expectations for the fourth quarter are not much better. At the time of writing this article, the fourth quarter has ended: in the past five years, the year-on-year growth rate of Amazon in the fourth quarter has gradually decreased, from 42% in 2009 to 20% in 20 13-20 14, and it is expected to be between 7%- 18%. David, a hedge fund manager, said: "For years, the story that investors have heard has been that Amazon is not profitable now because it is growing too fast." . In a letter to investors from GreenlightCapital, which he manages, DavidEinhorn said, "Now the growth is slowing down, but it has not released higher profit margins. The lower growth rate leads to greater losses. The main bullish assumption supporting many companies' stock bubbles is that the company is growing too fast to achieve high profits. We think Amazon is just one of many companies that hold this view and will eventually prove to be a failure. "

These are serious and harsh criticisms, especially for the benchmark enterprises in the Internet era. But Bezos has made critics like Enjo eat their words. In the past, once there were similar complaints against Amazon-this time may be no exception-the company will fight back and prove the skeptics wrong. Calling Amazon another "bubble stock" will be considered short-sighted or even reckless. Betting on Bezos will never end well.

But is something new happening in Amazon? Is it something new and dangerous? Or is this the latest statement that Bezos has always insisted on Amazon: Amazon's vision, operation and potential are so different that companies should judge it in different ways? This time, critics have skipped the past saying that Bezos is not in a hurry to make an immediate profit, but is more willing to invest heavily in businesses that may boost revenue in the future. This time, critics say Bezos got the core point wrong. This time, they said, Bezos pursued total domination at the expense of losing the continuous driving force to improve the customer experience. "Kindle, Prime, AWS, these businesses and Amazon's assets are absolutely reasonable," said Scott, an Amazon analyst at StifelFinancial, a research institution. Devit said, "But are they still engaged in the business with high success rate and high long-term financial return as before? This is where there are more problems than before, and where you start scratching your head. The growth rate slowed down, and there was no breakthrough in other new businesses. As an investor, you have to ask yourself, is this company going too far? "

It doesn't just dominate online retailing. This is a company that now provides express delivery of spare parts in San Francisco and Los Angeles. The TV series produced by JohnGoodman and gael garcíaBernal；; AWS's customer list includes NASA and Netflix; ; Recently acquired Twitch real-time game video company, about $654.38+0 billion. In China, Alibaba's home country, it is fighting it with all its strength; In addition, last year1February, we launched our own brand of environmentally friendly diapers. It may even launch a hotel reservation service in the near future. How does Amazon's increasingly segmented market business work together? What is Bezos' strategy? These problems are now thrown to this company, which used to be famous for its dedicated business and high efficiency.

Bezos once said that his job is to encourage more "bold bets" and embrace the failure caused by the pursuit of greater achievements of the company, because these efforts can "make up for dozens of projects with (or without) effects". This motivation and willingness to explore makes Amazon a terrible opponent; Eric, chairman of Google's board of directors? EricSchmidt has said that he thinks Amazon will become the most dangerous rival of the search giant. The same is true of Apple, which is now competing with Amazon's new projects in e-commerce, iCloud and even electronic devices. But did all these adventures of Bezos pay off in the end? "They don't make a penny!" Former Microsoft CEO Steve? SteveBallmer shouted in a recent TV interview, "In my eyes, that's not a real business. I can understand not making money for a year or two, but Amazon, how long, 2 1 year? "

In many ways, FirePhone is a concentrated expression of these negative impressions of Amazon. It also has all the things that supporters like about the company-brave exploration and daring to take risks-and all the things that critics laugh at: huge R&D expenditure, random follow-up of a utopian vision in return for bold bets, and the inability to create a truly fashionable thing. Understanding the process of Amazon smartphone production and the reasons for its failure may be the best way to understand the company's changing goals and values. Because FirePhone, as the most important innovation project of Amazon, is directly controlled by Bezos. As a person in charge of the project founding team said, "This mobile phone is Bezos' child. "

Like all products created by Amazon, FirePhone started with a blank sheet of paper. Specifically, it is a few single-spaced printing papers with the contents of the press release issued by the product printed on them. Bezos asked employees to write these mock press releases before starting a new project. The purpose is to help them take customers as their own responsibility, improve their ideas and refine their goals. The FirePhone program is particularly ambitious. According to sources, even at that time, a series of goals of FirePhone seemed unrealistic.

The program code-named "Tyto" is a bird name of the genus Cynodontidae, which was launched on 20 10, about the time when Apple launched the iPhone4. Amazon wants a mobile phone product of its own, and the reason is convincing enough. Under the global mobile tide, an Amazon mobile phone can achieve direct contact with users. Nowadays, consumers often use iPhone or Android devices to access Amazon. Without the control of the hardware, there will be problems. For example, users can't buy e-books on the iPhone through the Kindle app, because Apple will take away 30% of the sales-this withdrawal will endanger Amazon's already meager profits.

Bezos knew that Amazon phones would be immediately asked a question: Why do people buy Amazon phones instead of iPhone? This is why he asked the team to take a simple and bold route from the beginning: surprise consumers with something special and different. This is not from an executive who is busy managing other business of the company; When interviewing more than 30 former and current Amazon employees, most of whom were involved in the FirePhone mobile phone project, the author concluded that Bezos had controlled all aspects of this product from the beginning. (Amazon declined to arrange for Bezos or other executives to comment on this report. )

Bezos' guiding principle for Amazon has always been to start from the needs and desires of customers. But on the FirePhone issue, the customer mentioned here has obviously become Jeff? Bezos. He imagined a series of vivid functions, and then the Tyto team began to try a number of technologies: near-field communication of mobile payment, interactive operation using actions, and components that can give different feedback to pressure. Perhaps the most attractive thing is "DynamicPerspective", which uses a camera to track the user's face and adjust the display according to the direction to make the screen display 3D.

The Tyto project is highly valued in Lab 126, which is Amazon's R&D offices in Sunnyvale and Cupertino, California, only a short walk from Apple's headquarters. Who is in charge of Lab 126? GreggZehr, former vice president of Apple, likes to talk about guitar and loves classic style. "He will pass on old jackets in the lab, but it doesn't seem strange," said a former colleague. Mark, who once served as vice president in Lab 126? Mark Randall recalled, "The first time I went to his house, I said to him,' God, Glegg, this is like an Apple store.' (Zell declined to comment on this article. )

In the industrial design studio of Lab 126, employees sit in their seats, with Apple monitors and Dell notebooks on their desks. Sonos stereo is playing songs. Few Amazon employees can enter here. Besso Si Tong often stops here for a day or two on his way to Seattle. When FirePhone was about to be released, he visited more frequently: he worked in Lab 126 for almost a month. According to sources, Bezos is the "product manager" of FirePhone. A research scientist called it "super product manager". "Even the smallest decision needs to go through him," said a former senior employee who was involved in the development of the FirePhone camera. He recalled that Bezos personally insisted on using13 megapixel camera instead of 8 million pixels.

Bezos is deeply involved in hardware and software research and development. "I would see him discussing novel ideas with the industrial design team, or discussing font size and interoperability with the UI team," recalled a top designer working in Lab 126. "I think this is a CEO who cares about design; This is a good place to work. " In the end, however, the designer was depressed, and so were others. "Basically, we are not designing mobile phones for customers-we are designing mobile phones for Bezos," the interviewee said. Bezos controls every key decision, and team members begin to doubt their decisions and try to guess how Bezos will react.

Some designers expressed anger at Bezos' intervention and privately questioned his taste, while others liked Bezos' approach and praised his insight. In any case, Bezos' powerful control has made the team used to it.

Bezos is particularly embarrassing to the team in one function: dynamic perspective, which may be the most representative problem of FirePhone. The challenge of designing dynamic viewing angle is to realize multi-angle 3D display without glasses. The key is facial recognition, which allows the mobile phone camera to track the user's line of sight and adjust the 3D effect accordingly. Just after the first batch of people in charge of this project failed, finding a successor became a continuous recruitment work. "I want this feature," Bezos said, telling the team that no matter how long it takes or how expensive it is. Finally, a solution is found: four cameras are placed at the four corners of the mobile phone, and each camera can recognize facial expressions, whether in complete darkness or wearing sunglasses. However, doing so has caused this mobile phone to face the problem of serious battery shortage.

Team members really can't figure out what the really useful application of dynamic perspective is. At most, people think that Bezos is looking for the FirePhone version of Siri, an iconic feature that can make it sell well. But they always want to know what's the use of this except some interesting game interactions and attractive 3D lock screen images. "At the meeting, Bezos said' 3D, 3D, 3D!' He was as excited about this function as a child, and no one knows why, "recalled a former Amazon engineer team leader who has been focusing on the development of" dynamic vision "for several years. We have invested incredible money, but we all feel that it is worthless to consumers. This is the most ironic place. Every time someone asks why, the answer is,' because Bezos wants it.' No one thinks this function is worth spending so much money. No one. Absolutely not. "

In Brad? In Si Tong's book TheEverythingStore, Bezos wrote a memo called "Amazon.love" a few years ago, in which he described that he wanted to transform the Amazon brand into a brand that was "widely loved by customers and even considered cool" like Apple, Nike or Disney. Brands like Wal-Mart and Microsoft are "disliked". He also listed the characteristics of these companies in the memo: "It's cool to do risky things and think big problems. It's cool to expect the unknown Keeping up with the strategy is not cool. "

From Bezos' memo, it is not difficult to find the idea of leading the FirePhone project. Amazon is one of the most respected brands in the world and has always been among the best in customer satisfaction. But Amazon is still a website used by hundreds of millions of users to buy goods, those boring products-cheap toilet paper, not mobile phones with a price of 199. This also explains why Bezos wants FirePhone to have these features. On June 8, 2065438+April, in Seattle, Bezos showed the design and "dynamic vision" function of this mobile phone on the stage.

At the end of July, FirePhone finally went on the market, and it didn't take long for Amazon to find that consumers didn't buy it. Commentators violently criticized this product, especially "dynamic vision", and found it the most useless and distracting. Criticism also includes FirePhone's mediocre industrial design and disappointing application ecosystem; Amazon doesn't have an app store or service that matches Apple. But they say that Amazon's biggest failure is the price: the FirePhone is too expensive for consumers. According to three sources familiar with Amazon's sales data, only tens of thousands of FirePhone were sold during Amazon's sale. The book impairment1.700 million also cited the failure of this product release.

Obviously, Amazon has not become a "cherished" brand as Bezos said in the memo. No matter how much money they spend, fans of Apple, Nike and Disney are willing to experience their products and culture. But Amazon is really not as cool as Bezos hoped.