I’ve been really inspired by Amazon lately. They’re great at what they do, but I’m really charged-up by their recent acquisitions of Zappos and Woot! . Both companies are healthy and admirable, but from all accounts Amazon was mostly interested in them because they had a great company culture (which leads to great customer service, and from that a solid business.)
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The thing that’s inspiring to me is that you rarely read about a company being bought because it has a great culture. Bankers and M&A people don’t really know how to value a company’s culture that well. And if you can’t value something, it’s hard to price it – everything gets messy in the valuation, so you usually a stick with things that are more numbers-oriented. Companies usually like to pay for things they can count: market share, channel access, IP, scarce resources, etc. Cisco is a great example. From the late-90’s to mid-00’s, Cisco was on a major buying spree to pick up any patents or technologies in their space. They usually bought technology cheaper than they thought they could build it, they rolled it into a product road map and slowly, consistently grew the orb.
That sort of acquisition strategy works great if your a tech company, but not if you’re an online retailer. There’s almost nothing you can do to force customers to come back to your site over and over except serve them better than anyone else can. Amazon gets this, and I think they also get that good service starts with strong culture. Tech companies buy other companies because many times they need some technology they coolant manage to build themselves. By that same logic, culture seems even harder to create (and maybe more valuable) than some of the most brilliant IP. Getting the right culture is like catching lightning in a bottle. It’s the right people at the right place at the right time. You can invest in R&D to build specific IP, but it’s almost impossible to invest with the same intention and build a great culture.
All of this thinking on company culture lead me to one last thought. If traditional retail was all about location, location, location (can your customers find you), and if the early days of the web were all about access, access, access (can you offer all the long tail of goods your consumer could possibly want), retailing on the web now is about personality, personality, personality (brands than connect deeply with how their customers think and feel). Let’s face it, if in three clicks or less we can find anything our hearts desire, isn’t the next frontier buying those things under terms that are personal to us? (Think Zappos and their shoe returns, Woot and their one-item-a-day geekfest, or Amazon and their Prime shipping).
As the internet gives us more and more options, we seem to create more and more fractions in an attempt to create meaning in this ever-expanding sea of access. That’s happening everywhere online; content, services, networks, you name it. Today, it seems perfectly normal to go to the same (online) store everyday just to check out the one item they’re selling at a discount. This sort of evolution can’t come from a well constructed sensical strategy that makes good business sense, it has to come from a company with personality and a culture that’s just crazy enough to try.