The $170M Failure That Jeff Bezos Was Able To Turn Into a Multi-Billion Dollar Success Story.
Failure is a springboard to future success.
When you think of Jeff Bezos, you immediately think of the richest man on the planet. You think of the man who founded the world’s largest library with Amazon. Jeff Bezos is indeed a successful entrepreneur who makes dreaming a lot of people. He has created one of the world’s most successful companies in just twenty-five years.
Better yet, Jeff Bezos is the man who never gives up. From a young age, Jeff Bezos has dreamed of colonizing space. His phenomenal success with Amazon has never distracted him from his original goal. This goal, which gives meaning to his life, continues to progress day after day with the company Blue Origin that Jeff Bezos founded in the early 2000s.
To succeed in colonizing space, Jeff Bezos is ready for anything. Every year, he invests hundreds of millions of dollars of his fortune in Blue Origin. Today, no one thinks that Jeff Bezos is crazy to have such a goal. The odds are now in his favor.
You’ve understood that the name Jeff Bezos is associated with success.
However, even Jeff Bezos experiences major failures from time to time. We tend not to remember those failures, because success stories are the ones that sell. No one seems to be interested in failure stories. This is a mistake because there is a lot to learn from your failures, but also those of successful entrepreneurs like Jeff Bezos.
The Fire Phone remains one of Jeff Bezos’ biggest failures
In July 2014, Amazon launched its first smartphone, the Fire Phone. Jeff Bezos believed strongly in this project. He wanted Amazon to establish itself as an important actor in the smartphone industry. In general, when Jeff Bezos wants something, he always ends up getting it.
So Amazon invested more than $170 million in the Fire Phone project. Unfortunately for Jeff Bezos, the Fire Phone was a monumental failure. The smartphone made by Amazon never finds its customers. When you talk about the Fire Phone to people in the smartphone world, the first words you get are not very complimentary: “a debacle”, “a fiasco”, or “a surprising disappointment”.
The Fire Phone has not left any good memories.
Jeff Bezos, however, never blamed Ian Freed, the leader of the Fire Phone program at Amazon. When Jeff Bezos decided to end the Fire Phone program in September 2015, he reassured Ian Freed with these words:
“You can’t, for one minute, feel bad about the Fire Phone. Promise me you won’t lose a minute of sleep.”
A $170 million failure is enough to torment you for a while. For Jeff Bezos, it was out of the question. As someone who is always looking for innovation, Jeff Bezos sees failure as part of the road to great success.
The $170M failure of the Fire Phone did not change Jeff Bezos’ philosophy
Whether the failure is a few thousand dollars or more than $170 million hasn’t changed Jeff Bezos’ philosophy.
For him, it makes sense that failures become more costly as the business grows:
“As a company grows, everything needs to scale, including the size of your failed experiments. If the size of your failures isn’t growing, you’re not going to be inventing at a size that can actually move the needle.”
Taking risks to get to the moon is always worth it for Jeff Bezos.
Once you’ve failed, you need to quickly analyze the causes of your failure and see what you can learn from it to do better when you try to innovate again. This philosophy that Jeff Bezos has passed on to Amazon employees like Ian Freed is exactly what allowed Amazon to turn the failure of the Fire Phone into another phenomenal success.
Jeff Bezos turned the failure of the Fire Phone into a phenomenal success
Among the various software that the Fire Phone was equipped with, Jeff Bezos was fascinated by the voice recognition software. This software could respond to commands by accessing information stored in the cloud.
During a demonstration of this software on the Fire Phone, Jeff Bezos asked Ian Freed a simple question:
“I can ask for any song? What about Hotel California?”
The Fire Phone was able to understand Jeff Bezos’ request, and the song began to play on the Fire Phone. Jeff Bezos enthusiastically turned to Ian Free with these three words:
“This is fantastic.”
Jeff Bezos immediately understood the potential of this voice recognition software. Soon after this demonstration, he told Ian Freed to start a team to build a device with dedicated voice recognition technology to respond to users’ voice commands.
Jeff Bezos’ intelligence was to understand right away that this feature could have an extraordinary impact on the general public. He also understood that Amazon needed to invest heavily in developing its proprietary voice recognition software. Indeed, the software used in the Fire Phone did not belong to Amazon.
The Echo line of devices and Alexa software were born out of the failure of the Fire Phone
A few months later, Ian Freed’s team launched the Echo equipped with Alexa, the voice recognition software of Amazon.
When it was launched, all the experts were enthusiastic about this truly innovative device:
“Amazon has a new product that doesn’t really have any current equivalent form any other tech company — a connected speaker called Echo that’s always-on, listening for commands that its virtual assistant can then respond to with information or by triggering a task.”
While the Fire Phone was disappointing, Amazon was already shining on another front: connected speakers. So the time and money spent building the Fire Phone were not wasted, as voice recognition technology gave the idea to invent the Amazon Echo.
Jeff Bezos went on to explain in a letter to Amazon shareholders that Amazon’s innovation-oriented philosophy had made the difference again:
“While the Fire phone was a failure, we were able to take our learnings (as well as the developers) and accelerate our efforts building Echo and Alexa.”
Final Thoughts
As we are in mid-2024, Amazon has sold more than 500 million Alexa-enabled devices using Alexa Artificial Intelligence to meet user demands. Amazon has already generated several billion dollars with the Echo range of products.
Most interestingly, Amazon is the leader in the field of connected speakers with more than 40% market share ahead of a competitor like Google.
The story of the failure of Jeff Bezos and Amazon with the Fire Phone should inspire you for your life. No matter what failures you go through, you’ll never waste your time and money if you take the time to analyze your failures to take advantage of them in your future endeavors.
That’s how Jeff Bezos came up with the idea to launch Amazon into a whole new field in which the company is now a leader: that of connected speakers.
BlackRock’s Secret Plan to Take Total Control by Marginalizing the Bitcoin Revolution.
Beware of Larry Fink and his financial friends.
Bitcoin Is the Best Money Ever Created.
