Latest news with #FirePhone
Indian Express
2 days ago
- Business
- Indian Express
Xbox cofounder joins Amazon to lead ZeroOne in an attempt to create ‘breakthrough' consumer products
Amazon is once again taking a shot at creating revolutionary consumer products—this time more seriously—with a new team called ZeroOne, led by J Allard, who helped create the Xbox game console. According to CNBC, Allard has been tasked with developing 'breakthrough' consumer products. The ZeroOne team is spread across Seattle, San Francisco, and Sunnyvale, California, and is focused on both hardware and software projects, based on multiple job postings. Listings for the ZeroOne team at Amazon include senior roles in applied science, product marketing, and customer insights. The description for the applied scientist role notes that the position will work on 'a new smart-home product,' while the product marketing role vaguely refers to work on 'an Amazon device.' Amazon has a mixed record when it comes to creating hardware products, with more misses than hits over the years. While the company has delivered knockout successes like the Kindle and Echo smart speakers, it has also produced flops such as the Fire Phone, the Halo fitness tracker, and the Astro household robot in recent years. The e-commerce giant has a separate devices unit responsible for creating hardware products such as Kindles, Fire TV Sticks, and Echo speakers. In fact, many of Amazon's successful devices have come from Lab126, the company's hardware research and development unit based in Silicon Valley. Two years ago, Amazon brought in Microsoft alum Panos Panay to lead its Devices & Services (D&S) business. Panay had been with Microsoft for over 19 years, serving as Executive Vice President and Chief Product Officer, where he led the Windows + Devices division. During his time at Microsoft, he played a critical role in the development of Surface computers—Microsoft's answer to Apple's Mac. Panos's move to Amazon surprised many in Silicon Valley. He replaced Amazon's former hardware chief, Dave Limp, who became the CEO of Jeff Bezos' other company, the aerospace outfit Blue Origin. Under Panos, Amazon's only major new hardware releases have been the updated Kindle lineup announced last year, including a version with colour e-ink. Panos was the face of the product launch event, and earlier this year, he appeared again during the debut of the long-delayed Alexa Plus voice assistant. Today marks the anniversary of a gaming revolution! 🎮 On November 15, 2001, the original Xbox was released in the USA, bringing us iconic games like Halo and changing the landscape of console gaming forever. Here's to the console that dared to innovate and brought online gaming… — Nova's Nostalgia & Tech (@Nostalgia_Nova) November 15, 2024 Allard has joined Amazon after spending 19 years at Microsoft, where he was most recently the technology chief of consumer products—a role he left in 2010—at a time when the Seattle-based tech company desperately needed a new hit hardware product that could match the success of the Kindle. Allard was a key architect of the Xbox game console and also worked on Zune, a new type of MP3 player from Microsoft that ultimately failed to compete with Apple's iPod. Allard has experience in creating new hardware, though it remains to be seen what he will do next at Amazon. It's also unclear when a product from ZeroOne might actually be shipped to consumers. Allard's joining Amazon comes at a crucial time, as the company's devices unit has faced layoffs over the past few years. This year alone, Amazon laid off 100 employees from the devices unit. Anuj Bhatia is a personal technology writer at who has been covering smartphones, personal computers, gaming, apps, and lifestyle tech actively since 2011. He specialises in writing longer-form feature articles and explainers on trending tech topics. His unique interests encompass delving into vintage tech, retro gaming and composing in-depth narratives on the intersection of history, technology, and popular culture. He covers major international tech conferences and product launches from the world's biggest and most valuable tech brands including Apple, Google and others. At the same time, he also extensively covers indie, home-grown tech startups. Prior to joining The Indian Express in late 2016, he served as a senior tech writer at My Mobile magazine and previously held roles as a reviewer and tech writer at Gizbot. Anuj holds a postgraduate degree from Banaras Hindu University. You can find Anuj on Linkedin. Email: ... Read More
Leaders
15-05-2025
- Business
- Leaders
Startup Wars: When Data Said No, Anghami Said Go!
In 2012, the MENA region's digital landscape looked challenging for any new music startup. Music piracy was widespread, digital payments were clunky, and most people preferred free content. But two founders, Edward Maroun and Elie Habib, saw a chance where others saw problems. They launched Anghami, a music streaming service built for the unique tastes and challenges of the Arabic-speaking world. Betting on Culture, Not Just Numbers From the beginning, Maroun and Habib made a bold choice: invest early in expensive music licenses and a hybrid free/premium model. The data didn't support their vision. Studies suggested MENA users wouldn't pay for digital content, but their instincts told them a culturally focused platform could succeed. They were right. By February 2017, Anghami had 33 million registered users, and in March 2021, it went public on NASDAQ through a SPAC, achieving a $220 million valuation. The Gut vs. Data Dilemma Every entrepreneur faces the same question: trust the numbers or follow your instincts? This can be shown in a simple 2×2 matrix, where the horizontal axis represents the amount of data you have, and the vertical axis measures the strength of your gut feeling. Low Data, Low Gut: Guessing in the dark—like Amazon's failed Fire Phone, which sold fewer than 35,000 units in two months and lost the company $170 million. Guessing in the dark—like Amazon's failed Fire Phone, which sold fewer than 35,000 units in two months and lost the company $170 million. Low Data, High Gut: High risk, high reward. Steve Jobs ignored market studies when launching the iPhone in 2006, changing the mobile industry forever. High risk, high reward. Steve Jobs ignored market studies when launching the iPhone in 2006, changing the mobile industry forever. High Data, Low Gut: Safe but often slow. Think of Borders, which had the data to see the rise of e-commerce but outsourced its online sales to Amazon, leading to its downfall. Safe but often slow. Think of Borders, which had the data to see the rise of e-commerce but outsourced its online sales to Amazon, leading to its downfall. High Data, High Gut: The sweet spot for innovation. Netflix made a bold bet with House of Cards in 2013, using deep viewer data without even filming a pilot episode. The takeaway? Big breakthroughs often happen when strong instincts meet solid data. The key is knowing when to trust each. Real-World Gutsy Moves Talabat's Local Banner Experiment Talabat's marketing team tested animated banners (which data suggested would boost conversions by 172%) against a simple image of a traditional Middle Eastern feast. Despite the numbers, they trusted their gut and chose the feast image, which improved conversions by 23% and lowered acquisition costs by 15.5%. Careem's Grocery Gamble In early 2020, Careem noticed a spike in grocery orders during lockdowns. Instead of just focusing on ride-hailing, they quickly launched Careem Quik. By 2022, monthly grocery orders had grown 26 times, proving the power of quick, gut-driven decisions. Choosing the Right Methodology Based on Your Stage Choosing the right approach depends on your startup's stage. Here's a quick guide: Ideation Stage (From Idea to Concept) First Principles Thinking: Break problems down to their basics, like Elon Musk does at SpaceX. MNT-Halan, Egypt's first unicorn, used this approach to rethink financial services. Break problems down to their basics, like Elon Musk does at SpaceX. MNT-Halan, Egypt's first unicorn, used this approach to rethink financial services. Design Thinking: Focus on real user needs and creative problem solving, used by IDEO and Apple. Jawwy by STC used this method to create a personalized mobile experience for Saudi youth. Focus on real user needs and creative problem solving, used by IDEO and Apple. Jawwy by STC used this method to create a personalized mobile experience for Saudi youth. Blue Ocean Strategy: Create new markets instead of competing for the same customers, like Cirque du Soleil. MNT-Halan also did this by combining ride-hailing with fintech in Egypt. Building Stage (From Concept to Product) Lean Startup: Test ideas quickly with Minimum Viable Products (MVPs) to avoid wasting time on the wrong thing. Zain Innovation Campus (ZINC) in Jordan uses this approach to help startups. Test ideas quickly with Minimum Viable Products (MVPs) to avoid wasting time on the wrong thing. Zain Innovation Campus (ZINC) in Jordan uses this approach to help startups. Jobs to Be Done (JTBD): Focus on the core job your product does for customers. Careem expanded by understanding what its users really needed beyond just rides. Growth Stage (From Product to Scale) AARRR (Pirate Metrics): Measure key metrics like Acquisition, Activation, Retention, Referral, and Revenue. Instabug, an Egyptian startup, uses this to keep its users engaged. Measure key metrics like Acquisition, Activation, Retention, Referral, and Revenue. Instabug, an Egyptian startup, uses this to keep its users engaged. RICE Scoring Model: Prioritize projects based on Reach, Impact, Confidence, and Effort. Vezeeta relies on this model to decide which features to build. Prioritize projects based on Reach, Impact, Confidence, and Effort. Vezeeta relies on this model to decide which features to build. OKRs (Objectives and Key Results): Set clear, measurable goals. Wuzzuf, Egypt's leading job platform, uses OKRs to guide its growth. Scaling Stage (From Growth to Market Leadership) Cohort Analysis: Track how groups of users behave over time. Talabat uses this to improve customer retention. Track how groups of users behave over time. Talabat uses this to improve customer retention. OODA Loop: Make fast, repeatable decisions. Aramex uses this to stay ahead in the fast-paced logistics industry. Sustainability Stage (From Leader to Legacy) Cynefin Framework: Choose the right approach for different types of problems. STC uses this for strategic planning. Choose the right approach for different types of problems. STC uses this for strategic planning. OKRs: Keep setting ambitious goals as your company scales. (now Amazon MENA) used OKRs to fuel its rapid growth. Your 5-Step Battle Plan Identify two ideas you believe can drive real impact. Gather quick data (mini tests, customer interviews) within a week or two. Trust your gut: What insights surprised you? What still feels right despite the numbers? Run hybrid experiments that blend both your data and intuition. Track a single key metric (like sales or retention) to measure success. Conclusion: The Leap of Faith Numbers are powerful, but so is your instinct. Don't let spreadsheets stop you from seizing the moment, and don't let gut feelings blind you to the facts. Maroun and Habib leaped when data said no, and today, Anghami stands as a testament to the power of intuition in the face of uncertainty. What leap will you take next? Short link : Post Views: 2
Time of India
26-04-2025
- Business
- Time of India
Amazon founder Jeff Bezos' major setbacks: How failed ventures and financial struggles paved the way for the tech giant's success
Amazon founder Jeff Bezos has been confronted with various challenges on his path to turning a garage business into one of the biggest companies in the world. During his early days, Bezos faced doubts from investors and the public regarding the potential of e-commerce. He grappled with scarce resources and stiff competition from traditional retailers. As Amazon expanded, Bezos encountered logistical and operational challenges in expanding the business worldwide, keeping customers satisfied, and making timely deliveries. Despite these challenges, his vision, risk-taking attitude, and single-minded obsession with customer experience enabled him to turn Amazon into a global technology giant. Explore some of the major challenges being faced by Amazon founder Jeff Bezos and how he overcame them. Challenges faced by Jeff Bezos Amazon Fire Phone One of Jeff Bezos's most infamous failures is the Amazon Fire Phone, released in 2014 was Amazon's initial foray into the smartphone industry, challenging titans Apple and Samsung. The phone came equipped with flashy technology such as Dynamic Perspective (a 3D-like motion interface) and Firefly (a feature that could scan objects in the real world to immediately purchase them on Amazon). Though ambitious, the phone was obviously made more to promote purchasing than to offer a fantastic mobile experience. Consumers found it gimmicky, pricey, and without essential features. Large app makers avoided it, and the phone became obsolete in no time. Amazon had to drop its price from $199 to 99 cents within months and eventually wrote off $170 million worth of unsold goods. The Fire Phone flopped so badly that it retarded Amazon's hardware plans — but Bezos took it in stride, terming it as a necessary failure along the innovation path. Crucible (Video Game) Amazon in 2020 launched "Crucible," its first AAA multiplayer video game. It was one of a series of moves by Bezos to make Amazon a gaming industry powerhouse. Created by Amazon Game Studios, Crucible was destined to be a huge success, rivaling such games as Fortnite and Overwatch. But the initial release was nothing short of calamitous. Unfocused, littered with errors, and a failure to pull in a fan base, only one month post-launch did the game get put back into closed beta — unheard of in video games — and a few more months later it was outright cancelled. Although the precise cost of development wasn't disclosed, typical AAA games are in the order of $60–$80 million, a significant reputational and financial loss. Though there was a failure, Amazon went on investing in other games as well, such as the ultimately successful "New World," indicating Bezos's failure-to-learn strategy. Haven (Healthcare Venture) Amazon, JPMorgan Chase, and Berkshire Hathaway launched Haven in 2018 as an ambitious joint venture. It was intended to transform American healthcare for the workers of the companies and eventually, possibly, the general market. The vision was to lower the cost of healthcare and enhance results through technology and innovation — classic Bezos thinking. But the healthcare system was too complicated. The company faced fuzzy objectives, leadership turnover, and minimal concrete progress. By early 2021, Haven quietly closed. It never rolled out a product or shook up the system as intended. For Bezos, this was a stark reminder that even ambitious, well-capitalized projects can fail when attempting to reform industries with entrenched inefficiencies. During the dot-com bubble, Bezos invested big in startups that shared Amazon's ecommerce vision. One of the largest flops was in which Amazon had a large stake. Launched with great fanfare — including a Super Bowl commercial that starred a sock puppet — the company vowed to bring pet supplies to your doorstep. But the business model was flawed: shipping heavy pet food was costly, and the company sold it at little markup and with free shipping. As losses accumulated, confidence dwindled. When the dot-com bubble burst in 2000, folded. Amazon lost millions in the process, and the sock puppet became a lasting symbol of dot-com failure. Bezos admitted the error but attributed it to a risk necessary in pushing the limits of ecommerce. Another dot-com failure investment was which guaranteed one-hour delivery of items such as DVDs, snacks, and magazines. Amazon invested more than $60 million in it, thinking ultra-fast delivery was the future. Kozmo's product was novel but unsustainable — no minimum order quantity, and free delivery. The firm grew too rapidly and went out of money. It collapsed in 2001. The irony is that this same concept — speedy delivery — would later prove to be one of Amazon's greatest assets in the form of Prime. But at the time, the infrastructure was not in place, and Bezos's dream was premature. Amazon WebPay Amazon's initial serious foray into the peer-to-peer payments market, WebPay, was introduced in 2009. It enabled users to send money from their Amazon accounts, going head-to-head with companies such as PayPal. However, the service failed to gain traction. Its interface was awkward, and consumers had no incentive to move from more established sites. Amazon closed it down by 2014. The failure demonstrated that even with the Amazon name behind it, badly implemented financial tools wouldn't work without actual innovation or consumer incentive. LivingSocial According to the reports, Amazon invested $175 million in LivingSocial, a daily deals site intended to compete with Groupon, in 2010. Early on, the business expanded briskly, but the daily deal format started declining. LivingSocial attempted to revamp by providing tickets to events and staging experiences in neighborhoods, even going as far as expending millions redeveloping an historic building into a venue. Those efforts could not revive expansion. LivingSocial was purchased in 2016 by Groupon for zero dollars — $0. Amazon's investment in terms of large dollars was gone, and the arrangement was broadly agreed upon as not succeeding. Amazon Local Register In 2014, Amazon tried to rival Square and PayPal with its own payment device: the Amazon Local Register. It was an app and card reader designed for small businesses. But it didn't catch on — the device didn't have competitive features, and small business owners didn't use it. Amazon discontinued it in 2015 and closed it down completely in 2016. Similar to WebPay, it demonstrated that entering a space without a clear benefit to the user wouldn't be sufficient to capture market share. Askville Askville, introduced in 2007, was Amazon's take on Yahoo! Answers or Quora — a Q&A site where users could pose questions and receive community answers. While it amassed a respectable user base, it never really found its market or achieved mainstream fame. As years went by, Amazon lost enthusiasm for keeping it going, and in 2013 the site was closed. The endeavour never merged with Amazon's overall business and is today a relic of its early Web 2.0 days. Amazon Destinations It debuted in 2015, and Amazon Destinations was Amazon's foray into the travel sector by providing short getaway hotel bookings. But the site had no competitive offers, didn't provide flights, and wasn't sufficiently enticing to shake up large travel websites such as Expedia or In a mere six months, Amazon shut it down. Bezos never made a public comment on the failure, but it was a textbook example of a company attempting to reach too far beyond its area of expertise without providing something new or better. MyHabit Amazon's flash fashion sale website, MyHabit, opened in 2011 as flash-sale retailers such as Gilt and Rue La La gained popularity. It was designed to provide fashion enthusiasts time-limited offers on high-end clothing and accessories. But the idea didn't pan out as shoppers grew weary of flash sales, and competition within the fashion sector increased. MyHabit was discontinued in 2016, with Amazon choosing instead to merge clothing sales under the Amazon Fashion banner. It was a move away from niche fashion experiments, but a shift towards wider, long-term thinking. Books removed from Kindles (1984 Scandal) In 2009, Amazon removed unauthorised copies of George Orwell's "1984" and "Animal Farm" from customers' Kindles remotely. While the move was within the law — the books were available for sale by a third-party who did not have the right to distribute them — it generated public outcry. The removal of content from individuals' devices was itself Orwellian in nature, and critics charged Amazon with digital censorship. Bezos apologised in person, labeling the action "stupid, thoughtless, and painfully out of line with our principles." The affair hurt trust in Kindle and made clear the dangers of digital overreach.
Time of India
26-04-2025
- Business
- Time of India
Amazon founder Jeff Bezos' major setbacks: How failed ventures and financial struggles paved the way for the tech giant's success
Amazon founder Jeff Bezos has been confronted with various challenges on his path to turning a garage business into one of the biggest companies in the world. During his early days, Bezos faced doubts from investors and the public regarding the potential of e-commerce. Tired of too many ads? go ad free now He grappled with scarce resources and stiff competition from traditional retailers. As Amazon expanded, Bezos encountered logistical and operational challenges in expanding the business worldwide, keeping customers satisfied, and making timely deliveries. Despite these challenges, his vision, risk-taking attitude, and single-minded obsession with customer experience enabled him to turn Amazon into a global technology giant. Explore some of the major challenges being faced by Amazon founder Jeff Bezos and how he overcame them. Challenges faced by Jeff Bezos Amazon Fire Phone One of Jeff Bezos's most infamous failures is the Amazon Fire Phone, released in 2014 was Amazon's initial foray into the smartphone industry, challenging titans Apple and Samsung. The phone came equipped with flashy technology such as Dynamic Perspective (a 3D-like motion interface) and Firefly (a feature that could scan objects in the real world to immediately purchase them on Amazon). Though ambitious, the phone was obviously made more to promote purchasing than to offer a fantastic mobile experience. Consumers found it gimmicky, pricey, and without essential features. Large app makers avoided it, and the phone became obsolete in no time. Amazon had to drop its price from $199 to 99 cents within months and eventually wrote off $170 million worth of unsold goods. The Fire Phone flopped so badly that it retarded Amazon's hardware plans — but Bezos took it in stride, terming it as a necessary failure along the innovation path. Tired of too many ads? go ad free now Crucible (Video Game) Amazon in 2020 launched "Crucible," its first AAA multiplayer video game. It was one of a series of moves by Bezos to make Amazon a gaming industry powerhouse. Created by Amazon Game Studios, Crucible was destined to be a huge success, rivaling such games as Fortnite and Overwatch. But the initial release was nothing short of calamitous. Unfocused, littered with errors, and a failure to pull in a fan base, only one month post-launch did the game get put back into closed beta — unheard of in video games — and a few more months later it was outright cancelled. Although the precise cost of development wasn't disclosed, typical AAA games are in the order of $60–$80 million, a significant reputational and financial loss. Though there was a failure, Amazon went on investing in other games as well, such as the ultimately successful "New World," indicating Bezos's failure-to-learn strategy. Haven (Healthcare Venture) Amazon, JPMorgan Chase, and Berkshire Hathaway launched Haven in 2018 as an ambitious joint venture. It was intended to transform American healthcare for the workers of the companies and eventually, possibly, the general market. The vision was to lower the cost of healthcare and enhance results through technology and innovation — classic Bezos thinking. But the healthcare system was too complicated. The company faced fuzzy objectives, leadership turnover, and minimal concrete progress. By early 2021, Haven quietly closed. It never rolled out a product or shook up the system as intended. For Bezos, this was a stark reminder that even ambitious, well-capitalized projects can fail when attempting to reform industries with entrenched inefficiencies. During the dot-com bubble, Bezos invested big in startups that shared Amazon's ecommerce vision. One of the largest flops was in which Amazon had a large stake. Launched with great fanfare — including a Super Bowl commercial that starred a sock puppet — the company vowed to bring pet supplies to your doorstep. But the business model was flawed: shipping heavy pet food was costly, and the company sold it at little markup and with free shipping. As losses accumulated, confidence dwindled. When the dot-com bubble burst in 2000, folded. Amazon lost millions in the process, and the sock puppet became a lasting symbol of dot-com failure. Bezos admitted the error but attributed it to a risk necessary in pushing the limits of ecommerce. Another dot-com failure investment was which guaranteed one-hour delivery of items such as DVDs, snacks, and magazines. Amazon invested more than $60 million in it, thinking ultra-fast delivery was the future. Kozmo's product was novel but unsustainable — no minimum order quantity, and free delivery. The firm grew too rapidly and went out of money. It collapsed in 2001. The irony is that this same concept — speedy delivery — would later prove to be one of Amazon's greatest assets in the form of Prime. But at the time, the infrastructure was not in place, and Bezos's dream was premature. Amazon WebPay Amazon's initial serious foray into the peer-to-peer payments market, WebPay, was introduced in 2009. It enabled users to send money from their Amazon accounts, going head-to-head with companies such as PayPal. However, the service failed to gain traction. Its interface was awkward, and consumers had no incentive to move from more established sites. Amazon closed it down by 2014. The failure demonstrated that even with the Amazon name behind it, badly implemented financial tools wouldn't work without actual innovation or consumer incentive. LivingSocial According to the reports, Amazon invested $175 million in LivingSocial, a daily deals site intended to compete with Groupon, in 2010. Early on, the business expanded briskly, but the daily deal format started declining. LivingSocial attempted to revamp by providing tickets to events and staging experiences in neighborhoods, even going as far as expending millions redeveloping an historic building into a venue. Those efforts could not revive expansion. LivingSocial was purchased in 2016 by Groupon for zero dollars — $0. Amazon's investment in terms of large dollars was gone, and the arrangement was broadly agreed upon as not succeeding. Amazon Local Register In 2014, Amazon tried to rival Square and PayPal with its own payment device: the Amazon Local Register. It was an app and card reader designed for small businesses. But it didn't catch on — the device didn't have competitive features, and small business owners didn't use it. Amazon discontinued it in 2015 and closed it down completely in 2016. Similar to WebPay, it demonstrated that entering a space without a clear benefit to the user wouldn't be sufficient to capture market share. Askville Askville, introduced in 2007, was Amazon's take on Yahoo! Answers or Quora — a Q&A site where users could pose questions and receive community answers. While it amassed a respectable user base, it never really found its market or achieved mainstream fame. As years went by, Amazon lost enthusiasm for keeping it going, and in 2013 the site was closed. The endeavour never merged with Amazon's overall business and is today a relic of its early Web 2.0 days. Amazon Destinations It debuted in 2015, and Amazon Destinations was Amazon's foray into the travel sector by providing short getaway hotel bookings. But the site had no competitive offers, didn't provide flights, and wasn't sufficiently enticing to shake up large travel websites such as Expedia or In a mere six months, Amazon shut it down. Bezos never made a public comment on the failure, but it was a textbook example of a company attempting to reach too far beyond its area of expertise without providing something new or better. MyHabit Amazon's flash fashion sale website, MyHabit, opened in 2011 as flash-sale retailers such as Gilt and Rue La La gained popularity. It was designed to provide fashion enthusiasts time-limited offers on high-end clothing and accessories. But the idea didn't pan out as shoppers grew weary of flash sales, and competition within the fashion sector increased. MyHabit was discontinued in 2016, with Amazon choosing instead to merge clothing sales under the Amazon Fashion banner. It was a move away from niche fashion experiments, but a shift towards wider, long-term thinking. Books removed from Kindles (1984 Scandal) In 2009, Amazon removed unauthorised copies of George Orwell's "1984" and "Animal Farm" from customers' Kindles remotely. While the move was within the law — the books were available for sale by a third-party who did not have the right to distribute them — it generated public outcry. The removal of content from individuals' devices was itself Orwellian in nature, and critics charged Amazon with digital censorship. Bezos apologised in person, labeling the action "stupid, thoughtless, and painfully out of line with our principles." The affair hurt trust in Kindle and made clear the dangers of digital overreach.
Forbes
01-04-2025
- Business
- Forbes
How To Manage Innovation Budgets With Risk-Managed Frameworks
Worried senior businessman listening presentation with coworkers during business meeting at office Businesses are struggling to meet their innovation goals, with only 3% of companies in qualifying as "innovation ready," according to the Boston Consulting Group, BCG, Annual Innovation Report. Yet, without embracing the risk of failure, companies risk becoming laggards in a fast-pacing market. Daniel Kang, an entrepreneur and author of The Super Upside Factor, highlights the challenge of managing innovation budgets, noting that many organizations prematurely terminate promising projects after initial failures. Kang argues that this approach runs counter to how successful innovation should function. Amazon founder Jeff Bezos underscored this mindset in his 2015 shareholder letter. Bezos emphasized in a 2015 shareholder letter that many organizations shy away from failed experiments, even though 'outsized returns often come from betting against conventional wisdom.' He argued that given 'a ten percent chance of a 100 times payoff, you should take that bet every time,' despite the risk of failure. This sentiment raises a key question for business leaders: How should they allocate funding for innovation while managing the inherent risks? In his book, Kang identifies three core principles for effectively managing innovation investments: Successful innovation often requires frequent experimentation and allows for failure within budgetary limits. Kang advises allocating funding with a 90% failure rate in mind. For example, a $10 million innovation budget could support 20 projects at $500,000 each. Leaders should anticipate that only one or two of these projects might deliver a significant return. Critically, organizations must avoid depleting their entire budget on a single initiative. Amazon exemplifies this resilience: Despite its $170 million loss on the Fire Phone, the company continued to innovate, leading to successful products like Alexa and Kindle. Given that most innovation initiatives will fail, the successful projects must generate returns that justify the overall investment. Unlike traditional strategic initiatives, which often target return-on-investment rates of 20%-50% due to their lower risk, innovation projects should aim for at least a return of 10 multiples. For instance, Amazon's initial foray into cloud computing with AWS in 2006 was a bold departure from its e-commerce roots. The investment has since yielded extraordinary results, contributing $90 billion in revenue in 2023 and accounting for 16% of the company's total revenue. According to Kang, investment in innovative projects should inform how the company should move forward. Each failure should inform the rest of the company and create learnings to make advancements. An example he shares is on how Amazon Auctions was meant to compete with eBay, but customers preferred fixed pricing over bidding wars. Instead of abandoning the idea of third-party sales, Amazon learned from the failure and pivoted to Amazon Marketplace, where third-party sellers could offer products at set prices. Marketplace now accounts for over 60% of Amazon's retail sales, generating billions in revenue annually. Organizations that adopt risk-managed frameworks like Google and Netflix tend to drive innovation forward. Google X embraces high-risk moonshots, funding multiple bets like Waymo and Project Loon, knowing most will fail. They celebrate fast failures and reinvest learnings into future projects. Netflix applies the same model to content, using data to iterate on audience preferences. Even flops refine algorithms, fueling megahits like Stranger Things and Squid Game. Failures aren't losses—they're investments in what works next. When combining these frameworks—budgeting for failures, targeting transformative returns, and building feedback loops—business leaders can adopt a systematic, sustainable approach to innovation. As Kang notes, "It's easier to build a hard company than an easy one," highlighting the importance of prioritizing bold, ambitious projects over incremental improvements.
