To Get More Wood, Drop More Acorns
Speaking of gardening...
One of the things that's truly special about Amazon is their ability to build new businesses. You might even say it's their competitive advantage, the ability to build new businesses that seemingly have little to do with the original vision. Much has been written about this phenomenon, so I won't go into too much detail here.
What I wanted to do instead is highlight how different the acorn mindset is. Bezos details that mindset in this terrific HBR interview, but it's this quote in particular I love:
"...Inside our culture, we understand that even though we have some big businesses, new businesses start out small. It would be very easy for say the person who runs a US books category to say, 'Why are we doing these experiments with things? I mean that generated a tiny bit of revenue last year. Why don’t we instead, focus those resources and all that brain power on the books category, which is a big business for us?' Instead, that would be a natural thing to have happen, but instead inside Amazon, when a new business reaches some small milestone of sales, email messages go around and everybody’s giving virtual high fives for reaching that milestone. I think it’s because we know from our past experiences that big things start small. The biggest oak starts from an acorn and if you want to do anything new, you’ve got to be willing to let that acorn grow into a little sapling and then finally into a small tree and maybe one day it will be a big business on its own."
This gets at a fundamental difference in paradigm with many companies. Most companies focus on building businesses where they have business being in business. (read that slowly...) But what's great about Amazon is that they don't ask, "What business do we have competing there?" They're willing to entertain some wildly unexpected directions in the hopes of creating value for the customer, and the metaphor fits perfectly. Instead of only attempting to grow upward (ie more wood on the same tree, build the same business bigger and bigger), the acorn mindset is willing to place side-bets on other sources of growth.
And no, I don't love it just because it's similarly agrarian to the metaphor I mentioned yesterday. But that doesn't hurt, either...
My friend and collaborator Henrik Werdelin, founder of a very successful venture lab called PreHype actually wrote a book based on this very premise called "The Acorn Method." In it he shares PreHypes playbook for building successful ventures inside of an organization.
Or as Bezos would say, planting acorns...
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