Dan Rose discusses Amazon near death experience

Dan Rose, former Director, Business Development at Amazon, has taken to Twitter to discuss the e-commerce giant’s early years.

Rose spent seven years at Amazon and was the first member of the Kindle e-book team, leading content acquisition and product management.

“Amazon launched in July 1995, and every Xmas was a near death experience for the first seven years. I joined in ‘99 and got to experience this first hand. Starting in late Nov, all corporate employees were shipped to fulfilment centres to pack boxes for six weeks,” he tweeted.

Amazon launched in July 1995, and every Xmas was a near death experience for the first 7 years. I joined in ‘99 and got to experience this first hand. Starting in late Nov, all corporate employees were shipped to fulfillment centers to pack boxes for 6 weeks. Here’s what I saw:
— Dan Rose (@drose_999) September 12, 2020

Rose, who went on to join Facebook and these days is Chairman at Coatue Ventures, went on to list his key takeaways from those years, including “picking items, packing boxes, wrapping gifts for 10 hours/day x six days/week is fucking hard work.”

“I have immense appreciation for the people who do these jobs. Your legs ache, your eyes go blurry. Repeating monotonous tasks over and over again with no natural light. Exhausting.”

This, he added, was also extremely disruptive to the business. “Imagine if every engineer, salesperson, finance and HR, etc from your company left the building for six weeks. All at the same time. Year after year. If you don’t do it, the business could die. If you do it, the business might die anyway.”

This became an existential problem for Amazon boss Jeff Bezos. “He hired a bunch of ops execs from Walmart to fix it, but they kept failing. Then in 1999 he hired an exec who came out of manufacturing, not retail. Jeff Wilke had two major insights that stopped the bleeding within a few years.”

Firstly, shipping individual boxes to individual homes looked more like manufacturing than retail. It required a full re-think on workflows and process engineering. This is when Amazon started referring to its warehouses as fulfilment centres rather than distribution centres.

Secondly, when corporate employees from Seattle parachuted into FCs for six weeks and then disappeared for 11 months each year, it was massively de-motivating for FC workers. “Wilke put on a flannel shirt and talked about growing up in a blue collar family. He empowered and inspired them,” Rose noted.

As a result, by Christmas 2002, not a single corporate employee was required to pack boxes. Wilke was worried they would lose their connection to this vital part of the business, so he created a programme where every employee would some spend time in the FCs or customer support.

“The annual fire drills ended, the existential threat was conquered, and the rest is history. Several years later, Wilke was promoted to CEO of Amazon Retail. Last month he announced he’ll be retiring in January 2021, after the company gets through one more holiday season. Legend,” Rose concluded.