6 1/2 things to learn from the failure of the Amazon Fire phone

Successful people rack up their share of failures too. The Fire phone is the most recent, but certainly not the only example of an Amazon product flopping. What can we learn about making products from Amazon’s experience on the Fire Phone?

Correct in the past doesn’t mean correct in the present
Just like in stocks, past successes do not positively correlate to future endeavors.

This doesn’t mean that Amazon shouldn’t have tried it
There’s no way to predict the future. Companies must risk failure to grow. It’s the same reason why investors expect a return on their money – because part of the deal is that your money could be lost, all of it, all at once if the company takes on too many risky projects and loses too much money. And so you expect to be compensated for your risk by growth. Apple had never made a phone before, and people called them brilliant after they released the iPhone (based on phenomenal sales). Amazon is being criticized for ‘not having experience making phones’ and yet this happens all the time. Companies need to learn somehow, and sometimes they get it right, and sometimes they fail.

And, successful people get a pass on vetting their ideas
We ascribe most success and failure to intelligence. Even when the overwhelming evidence is that success is as much a result of luck, class, family background. This bias leads us to conclude that successful people are more intelligent. We also assume they can predict consumer sentiment, and market behavior. Even as the Fire team had strong and grounded doubts about the phone’s chances, the project went ahead – pushed forward by Amazon’s CEO, Jeff Bezos, according to this article in Fast Company. The culture of Amazon, and of most companies, doesn’t allow workers voicing contrarian opinions to be adequately heard.

Failure now doesn’t mean failure later
Amazon could go on to refine its phone. It could make a totally different product based on what the company learned from the product. A failure then, isn’t always a Failure, capital F. Calling something a failure is a perception. Losing money is a reality, but we don’t yet know what the outcome of that money lost is. It might end up as much of an investment as a failure.

If you work in a hierarchical organization, you’ll probably be a part of a project like this
You might not be a part of a team that loses $170 million. The probability is high, however, that you’ll see a disaster coming, and be powerless to prevent it. The simple fact is that leaders consistently overestimate their knowledge and ability to execute. Good leaders build in safeguards to prevent against this. But even the best leader can be blinded, or fail to heed advice. Moving at a fast pace means that companies are at risk of not being able to catch a disaster before it goes out the door.

Everyone says ‘fail fast’ what they really mean is ‘fail quietly’
We all invest in stocks knowing the risk. And we all howl and rush for the exits when the risk profile increases (aka failures/loses increase). Silicon Valley pays homage to ‘failing fast’ but the leaders who are rewarded the most are the ones who’ve been lucky enough to succeed. Amazon was more or less a golden child until this happened. Suddenly it’s part of a narrative of slowing growth rates, low profits margins, an out-of-touch CEO and on and on. The company is more or less the same as it’s always been. Perception is changing around it, driven by the scent of blood in the water.

To my view, making the phone wasn’t exactly a poor decision – it was a predictable one, given Jeff Bezos’ string of successes. It’s predictable that a CEO, especially one so outspoken, would eventually stop listening to people who told him he is wrong. The poor decision, in my opinion, is changing the organizational structure inside of Lab 126 in the aftermath of the Fire’s release. People learn a lot from failure. Replacing them removes that learning. It also punishes people for something that was pretty clearly the result of poor decisions in leadership. Nobody, not Jeff Bezos and not anyone below him, should suffer for this. It’s the price a company pays to learn about a new space. The punishment will only reinforce the culture of not questioning Jeff Bezos. Which of course is the whole problem with hierarchical organizations. The same structure that gives us fantastic growth also makes such failures inevitable.