Amazon, Messengers and Trader’s Joe
Three stories/books from last week’s browsing:
Messengers by Stephen Martin and Joseph Marks explains all the factors that contribute to why some get heard more easily than the rest. They capture these factors under ‘hard messengers’ and ‘soft messengers’ in the book. I actually ended up taking quite a few notes, and agreed to a large extent with the authors. At the same time, I believe it’s difficult to characterise ourselves neatly into either a hard or a soft messenger. We most likely show traits of both, and those behaviours change depending on our audience. So what are some of the traits of hard messengers? They typically have a higher socio-economic status, competence, and are most likely dominant. For example, in uncertain times, we seek a dominant leader. Doing so, satiates our insecurity, for we favour someone who seemingly knows what to do. In addition, the authors argue that more often than not, we listen better when good looking folks speak to us. They have included charisma and looks under hard messenger effects. Soft messengers leverage their warmth, and trustworthiness, and are more comfortable showing their vulnerability. Compassion and connectedness go a long way in establishing trust. Even simple things such as complimenting someone, or even apologising for something unpleasant (though they may not be responsible for that) build connectedness. Could we select whether we want to be a hard messenger or a soft one? The authors don’t answer that key question clearly, and that’s one limitation of the book. However, being aware of such tricks and traits itself are key to build an understanding of the behaviours we need to emulate if we wish to be heard.
The Economist has done this deep dive on what’s next for Amazon, which has seen a tremendous upside during the current crisis. The question whether the company can continue to grow as fast as it has done in the recent times is at the heart of the piece. The essay argues that much of Amazon’s success should be attributed to Amazon Web Services (AWS), its cloud-computing division, which brought roughly $9bn in operating profit last year (and $35bn in sales). If we take AWA out of the equation, the rest of Amazon’s businesses show modest return. E-commerce, Amazon’s primary sales contributor, is noticing increased competition, while some of its other ventures, such as physical retail is struggling and Prime’s membership is reaching saturation. Often, money from AWS subsidies other parts of businesses, such as Whole Foods acquisition, and was primary source of investment behind Haven and Kuiper. Is it time for Amazon to spin off AWS, and let it continue expanding successfully? There is a strong rationale behind this argument including regulatory pressure. Doing so would however bring some of Amazon’s ghosts out of the closet.
Searching for profiles on businesses, similar to The Economist’s take on Amazon above, I re-read this old piece on Trader’s Joe from 2010 in Fortune magazine. The piece is still relevant, and analyses how this grocery chain manages to stock organic staples which are difficult to find elsewhere and that too at low costs. It’s success is hinged on carrying a ‘small-store vibe’ and following a counter-intuitive retail strategy of stocking fewer SKUs and thereby eliminating consumers’ decision paralysis when faced with multiple options. In addition, not only the grocery chain sources from local farms, but also from big food companies, but those links are rarely trumpeted for two reasons: it hurts Trader Joe’s reputation, and same goes for the big food companies that offer their staples to Joe’s at cheaper prices than it does with similar products to the other retailers. Some speculate that Trader’s Joe has lost its quirkiness in the last decade. Well, I don’t know but I surely plan to visit one in my next trip to the US.
A mental model that I am pondering over:
“A simple question to run your daily decisions through: Will it cost me time or save me time in the future?”
