61 Lessons from Amazon Finance
61 Lessons from Amazon Finance
Ever wonder how shadow overlord Bezos designed his bean counting systems? Wonder no more! That and more in this sassy exposé exploring what I learned while working at Amazon Go.
I got a lot of value out of spending a summer crunching numbers with the team at Amazon Go even though I ultimately turned down the offer.
Sometimes the real treasure is the lessons we learn along the way…
I actually had a really good time working some really sharp people during my summer internship at Amazon Go during between the first and second year of my MBA at HBS.
I didn’t say no to my team. I said no to Amazon and the job and the career progression. I actually immensely respect and continue to learn from Amazon’s strategic philosophies, Leadership Principles (legitimately the most comprehensive and precise list of leadership principles I believe to exist in the corporate world), and elements of Amazon’s culture. I fully believe it would’ve been a solid career and personal option, I just ultimately wanted to go my own way.
I’ll actually specifically say thanks to Molly Cochran (my boss) and Ting Chen (my boss boss) for making my time really pleasant and intellectually challenging me to drill deeper (and deeper and deeper) into my financial modeling assumptions. While I sorta think the field of finance is usually mostly completely made up performative kabuki theater and an exercise in futility that is legally required by public markets, I’m much better at it now as a result of their guidance! They’re still at Amazon doing big things so try to hire them away if you want some excellent athletic financial minds. Also, huge thanks to Jonté Harrell as well for being a consistently thoughtful mentor to me about the daily Amazon experience and beyond to this day. He’ll invest in you so reach out to him!
In my working life I have a rule.
I try to write down one thing a day I explicitly learned that I didn’t know before or hadn’t thought about deliberately or hadn’t fully realized until that day. This essay is the slightly redacted, chronological brain dump of my lessons from the pre-COVID summer of 2019 internship where I spent my IRL days trying to make Amazon Go better in South Lake Union (in which Amazon buildings totally dominate the Seattle cityscape btw). I mean, Amazon’s campus really eats A LOT of Seattle. But I digress.
This rule makes me better.
It helps me actively listen throughout my day because I’m always trying to find that thing that makes me go “hmm” and realize something new about the world.
For context, I did this during my spent the summer writing my own version of the infamous 6 Page Memo made famous by Bezos after supposedly hearing an intricate powerpoint presentation from a particularly gifted public speaker. For the uninitiated, the story goes that he realized after the talk that he didn’t retain any actually meaningful content from the presentation and henceforth all important proposals required the publication of an internal research paper thoughtfully and quantitatively analyzing the ideas proposed.
In reality, it’s not so rigid as all that, but the writing culture is real and I’m honestly a pretty big fan (said the writer lol). When done well, it does force you to focus, segment, and distill your ideas into razor sharp points with which you can attack your enemies (uh…I mean solve problems for customers). It also (when organized well) works as a phenomenal way to preserve institutional knowledge, is v effective as an evangelical cultural primitive, and facilitates the compounding value of building with idea legos.
My actual task was atypically vague for Amazon. I was to figure something out about Amazon Go that could be improved and convince leadership of how it could be better. While I’m not going to go into details about my paper here because it’s not my baby to call ugly, I do believe my ideas added some value to the discussion. I got some feedback after I left that my proposals were used in a meeting with the also infamous S Team which I was pretty pleased by and I also got a full time offer so it probably wasn’t complete garbage. Either way I had fun writing it.
Also for context, I worked from 8 to 6 most days. Not crazy. And it was pretty typical (or more) than most of the people I interacted with. I also wandered a lot of the other buildings just to see what was going on there (yes I’m an operational security nightmare) and saw empty desks there that supported this type of schedule seeming to be the norm as well. Definitely a far cry from the reports of misery Amazon is known for, but maybe I just missed it.
Also ALSO for context, I didn’t really work on the paper for more than like 3 hours a day (sorry Molly). I discovered my first week that Amazon had a deep and varied intranet, internal wiki, and hours upon hours of resources put together to develop, educate, and explain the various parts of Amazon and how they win. So I spent about half of every day just watching videos about supply chain philosophy (what else would you want to learn directly from Amazon??), negotiation tactics, dynamic pricing strategies, the internal history of AWS, and every variety of interesting little tidbits and write ups that an internet native loner nerd child could just be subsumed by. Yes I already acknowledged I’m a security nightmare. It’s all in my head though. So a lot of these daily lessons I recorded are influenced by that as well.
Without further ado - the list:
Day 0 - Massive people movements can be scary efficient. Onboarding and getting my laptop was wild compared to how slow the military can sometimes run. Set the standard ultra high and people will deliver.
Day 1 - It's important to reserve judgment (all judgment) about your leadership until you really observe reality. Some people have a ton of value hidden just below the surface.
Day 2 - You can run effective meetings without face to face communication. You just have to set the criteria first and execute hard.
Day 3 - Metric selection really drives decision-making. Figure this piece out first before you make any real commitments or iterate constantly to actually get good.
Day 4 - Delivering succesive wins is usually more useful than one big win, especially in the context of the Summer internship or business in general
Day 5 - Rough Comp for this role is $180K all-in, 1 year 50k cash, 1 year 40k 12 month split, 4 year vest (5%,15%,40%,40%)
Day 6 - Think about if the diversity of your team reflects the diversity of your customers (helps you make better decisions). Also Amazon's operating margin is only 5% WHAT
Day 7 - Your metric prioritization should change with your level and scope. Tactical decision makers need to think about different metrics than strategic decision makers. Everyone should be universally aware, but should have different focuses/cares
Day 8 - UX Testing needs real people going through it. You can't find all the bugs without someone who isn't close to the project. If you're too close you automatically do the workarounds and miss the root problems.
Day 9 - All jobs at Amazon at the MBA level are really limited in scope. This is not limited to the Finance role. Think about that in your career planning
Day 10 - Isolate price negotiation participants. Information asymmetry is your friend
Day 11 - Figure out your talent feeder pipeline fast. Amazon and University of Washington is such a good, symbiotic fit
Day 12 - Don't just think about customer needs in the abstract. Ground it in the context of a situation, event, or scenario (like sitting on the bus vs at your home). Use the 5 Questions to really zero in on your answer
Day 13 - Anecdotal data can be just as (if not more useful) than numbers, especially in a data starved or new environment
Day 14 - It takes 5-7 years at Amazon to get to a position where it makes sense to jump externally and continue upwards (think about this difference at other orgs)
Day 15 - You have to network internally if you want to find your next job rather than having to wait until it finds you.
Day 16 - A short list of 5 things that you actually complete every day is infinitely better than a massive to do list you don't chip away at. Plan, do, check, adjust process
Day 17 - Figure out what you're not passionate about and hire someone to complement that weakness. Those things get neglected. It's just as important as knowing your weaknesses
Day 18 - When reporting and critiqueing, figure out what's actionable today vs long term so you can prioritize your direction giving rather than just complaining/criticizing
Day 19 - Utilize your reporting requirements not just to keep tabs on the business but to incentivize the behaviors you want your staff to do. If you report on instock, they're going to care about instock, always a tension there with shrink
Day 20 - Remember to ground your plans in reality (remember that you fucking Lieutenant). Always overestimate the work required and underestimate your ability to accomplish the task in the time alloted, otherwise you'll be scrambling towards the end.
Day 21 - Remember to define all meetings you go to in terms of your goals and desired end states. When talking numbers and metrics remember the most important thing to get across is the story that the numbers are supposed to be saying. You do the analysis for others to digest.
Day 22 - Don't hide behind basis points to avoid solving your real problems and when thinking about recommendations/COAs always take a breath and think (and explain) "What do I need to believe for this result to be possible or true?". This frames your analysis with logic and forces you to acknowledge your assumptions
Day 23 - Balancing the bet big/financial prudence tension is all about diversifying project risk, have wide open eyes about what is a "long term project", the nerve to stick I through, and truly knowing what is a "one way door" vs a "two way door"
Day 24 - People at Amazon have a lot of great skills, but the big flaw from here (or working anywhere huge) is that you miss out on practicing how to manage risk in an existential way. Nothing you do will kill Amazon if it fails.
Day 25 - If you can build and own a system that your competitors have to use, you can get valuable data from that system on benchmarking against them. You own the system, you own the data, you own the future <- lol this one is funny to read back
Day 26 - If you can create the sense of motivation that you get from the military, but within a job that actually lets you live a balanced life you will have people that will work for you for 100 years (how do you create true believers)
Day 27 - A lot of people have great intentions, but you can't rely on them. Build mechanisms to turn intentions into complete process that are implementable and inspectable. For example, the interview process is set up to evaluate candidates on the leadership principles. The Bar Raiser's sole job is to be a steward of the leadership principles and aren't motivated to hire fast- they're motivated to hire well.
Day 28 - If you're in a customer facing role and your customer is happy, nobody can fuck with you. The performance metrics are way fuzzier. That's the difference between front and back office roles.
Day 29 - Complacency sows its own destruction. Laziness on the front end with formatting now results in more work on the back end, destroying the chance for future complacency. Way to go, past Cameron. Asshole.
Day 30 - If you aren't doing what you love, the interesting parts will eventually run out and you're going to get bored/depressed…
Day 31 - Amazon is really automated for financial reporting…but also really not. There are multi-billion dollar businesses that people have to track by hand. Figure out how to automate everything and you dramatically reduce your need for institutional knowledge.
Day 32 - Always remember which audience you are presenting to and always present things with a clear story. Everyone loves a good story and it conveys your ideas much more clearly than if you just dump facts and conclusions.
Day 33 - Some days will be a grind. Remember structured procrastination to keep getting things done even if they're not exactly the right things to get done.
Day 34 - People are really impacted by a surprise extra cost and surprise extra steps. Try to have everything presented up front so there are no surprises with things like shipping costs or creating an account(#1 and #2 reasons for abandoned purchases at checkout)
Day 35 - Don't get comfortable with your workload because it can change instantly
Day 36 - You have to be attached to your laptop or email because people will still send you things even if you're sick
Day 37 - The grit it takes to finish a ruck march is very different from the grit it takes to finish a crushingly dull paper or analysis or financial model.
Day 38 - Corporate Finance is just guessing and estimation with a ton of detail oriented analysis to "back up" the estimation…but it's still just hand waving.
Day 39 - Always be thinking about "Have we or someone else dealt with this type of thing before". It can save tons of heartache and struggle re-inventing the wheel. Amazon is not great at this. Most people are not great at this.
Day 40 - Always remember that if there is even a 0.01% chance of a negative outcome, you will put yourself in a position of regret if you make your choice based on assuming it won't happen to you and it does (Remember the Army)
Day 41 - Sometimes (or often) I work better when I have multiple projects to juggle and time manage. There is a limit to this, but having a blank white space day or two can really eat into my productivity.
Day 42 - Do a basic visual analysis (like a scatterplot) whenever you create something that someone seems interested in. It will make you look great and put together when you can instantly respond when they ask for something.
Day 43 - Backwards Planning should be done earlier than you think and updated more often than you think.
Day 44 - Figure out where your organization is silo-ed and why. Is it an Org problem? Change the Org. Is it a leader problem? Fix the Leader. Is it a mindset problem? Fix the employee.
Day 45 - Look at your "Dirty Laundry" List: Over-estimated sales, Unstandardized formats, Providing services customers ask for, but won't actually buy, over-automated but failed to simplify processes (wasted effort), long development timelines, over-hiring. These are MBA and entrepreneurship 101 mistakes. Never got cocky. Your shit still stinks.
Day 46 - Stop being lazy. Prepare for meetings thoroughly. Use your resources, learn the audience who will be there, don't fucking do it live if you can help it. After working as an IC for a while you're going to get out of practice at public speaking
Day 47 - Your wording is too harsh. You are still communicating like you’re dealing with military folks and they can't handle the bluntness. You have to be more political and kind. Otherwise people won't listen to you.
Day 48 - If you only plan on staying somewhere temporarily (like an internship) really make an effort to develop the relationships that you can take with you. Prioritize them over the more transient pieces.
Day 49 - Always have a succession plan. Otherwise you could leave unexpectedly and have never had the thoughts, conversations, and debates you need to keep your team effective for long after you leave. Plan in advance so you never are caught with your pants down when asked to change jobs, are promoted, or leave. You owe it to your team to give them a quality next boss.
Day 50 - Don't have too many people review your projects. Everyone has their own little nitpicks. Once people start seeing your stuff and they start primarily criticizing the formatting then you know you've gotten pretty close to where you want to end up. Seek focused feedback at that point so you don't get bogged down.
Day 51 - You always want to write business documents in a way that people feel smarter after reading them, not dumber. This means you have to bring your audience along for the ride, no matter how technical the subject.
Day 52 - If you can find a business where you can turn variable costs into fixed costs, then with scale you will be more profitable than competitors who retain variable costs. Also remember that your first job in a company sets your reputation within that company for better or for worse.
Day 53 - For financial and business reporting, there are certain points of the year where you fall into a rhythm, everyone "knows" the story, and you start assuming the trends. Find ways to break up this rhythm because otherwise people assume they're right without actually looking at the data.
Day 54 - When designing reports for senior leaders, drill down into what is actually important for them to know and design the doc or slide or whatever to visually show them what they should be looking at. This reduces the cognitive load on leaders and everyone else who uses the charts, dashboards, etc.
Day 55 - Figure out wherever you can turn a cost into a profit. Don't let your imagination limit the ability to flip a negative into a positive
Day 56 - Focus your efforts on work that will continue to pay dividends. If your strategy is based on transient characteristics of the world then you'll have to be transient with your strategy. If you can tap into unchanging (or steadily changing) characteristics then you can reap the rewards of your efforts for decades. Think of Amazon working to deliver things faster. People will never want their items delivered LESS fast. Therefor every dollar spent now on speed investment returns more the faster you can spend it.
Day 57 - Get better at python. It's not rocket science. Just put in 50 more hours and boom you have a bigger toolbox at your disposal forever
Day 58 - Don't forget to take advantage of the non-work related benefits the your job gives you. I should've gone out more in Seattle.
Day 59 - If an employer can vertically integrate the "get job, find living quarters, furnish them, and transition into full time work" for college kids many will just accept their offer because it’s the path of least resistance
Day 60 - Don't fumble the corporate offboarding. Ceremony matters. If someone feels like they just "fade away" from their experience, their good feelings about it might fade away too.
I’ll give some of these a deeper treatment in the future, but for now I think this is plenty to chew on for all of us. If confused about any of these recorded lesson or you want to know more, just reach out!
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