“Bottoms-Up,” Amazon, and Google: Eyes Wide Open

by MAi Research March 14, 2019

Steve Jobs once famously said:

“People don’t know what they want until you show it to them.”

These words have been quoted and re-quoted thousands of times, often framed as a visionary pronouncement from an idealistic genius. And yet, apart from the perhaps self-deceptive conclusions that many entrepreneurs have drawn from them, they contain an implicit warning: People don’t know what they want.

For every “top-down” product development success story like Apple’s, you have dozens of catastrophic failures. Trying to comprehend the intricate and subtle desires of a vast consumer base, and then to channel that knowledge into some kind of explosive growth, can be likened to driving blindfolded. Sure, you may get to your destination a lot faster; but more likely, you’ll never get there at all.

Woman Holding an iPad Displaying Amazon.com Web Site.

On the other hand, we find Amazon and Google as champions of the “bottoms-up” business development strategy. “Walk, don’t run” may not be a sexy motto, but it can yield staggering results over time. Because Google and Amazon focused on what their customers’ actual needs were, and were disciplined enough to focus on the gradual improvement of their products and services to meet those needs, today they are corporate titans in the online world.

Amazon’s Strategy

Consider Amazon founder Jeff Bezos’ approach to product development. In 1997, his first letter to shareholders included some fascinating insights into Amazon’s long-term strategy. He wrote:

“Today, online commerce saves customers money and precious time. Tomorrow, through personalization, online commerce will accelerate the very process of discovery. Amazon.com uses the internet to create real value for its customers and, by doing so, hopes to create an enduring franchise, even in established and large markets.”

So from the beginning, Bezos was focused not on what Amazon could potentially provide customers, but on what the company already provided: savings and convenience. Richard Koch once wrote that the two kinds of businesses that beat out the competition over time are “price simplifiers” and “proposition simplifiers;” in other words, businesses that offer cheaper products, and businesses that offer better products. Amazon has sought to become both, and its approach has remained consistent throughout the years.

Google vs. Go.com

On the other hand, do you remember Go.com? Don’t feel bad if you don’t; it was only active as a competitor to Yahoo and AOL for about 2 years in the late 90’s and early 2000’s.

During the days of the “dot-com bubble,” Disney set up Go.com as a reaction to the successes of other Web portals in attracting consumers. At the time, “stickiness,” or the measure of how many users would stay on a single page or site, and for how long, was the most desired metric in websites. Disney subscribed to that notion, and poured millions upon millions of dollars into the Go.com venture. Ultimately, it never caught on with Web users, and Disney finally pulled the plug in January 2001. Disney’s “top-down” approach led them to rashly barge into the Internet market as a reactionary measure, without clear ideas on what consumers wanted, or how Go.com could add value to their experience.

Contrast that with Google’s story. Google’s “bottoms-up” approach led them to eschew the commonly held belief that “stickiness” was the most important goal of an online search engine. Google’s developers knew that consumers wanted a fast, helpful search engine, and that’s what they diligently worked to provide, even though it meant users would quickly leave their site. Because of Google’s disciplined and consistent “bottoms-up,” customer-first approach, they are now the premier search engine in the world- and they’ve been able to leverage that expertise to provide a host of other services.

In summary, the “top-down” approach may be the more tempting alternative; but the more realistic, and ultimately more profitable path is focusing on what your customers want and need right now, and then striving to give them the best product on the market. This approach doesn’t preclude innovation; but it also doesn’t make reality subservient to possibility.