Are You Driving an Apple or Amazon Product Strategy?

I grabbed lunch with a well respected entrepreneur / investor on my trip to the Silicon Valley last week. One of the topics we discussed has been on my mind for the last couple years: should startups drive their product strategies more like Apple or Amazon?

The Apple versus Amazon debate goes like this: Apple has shown an uncanny sense for creating new products. They are known for telling their consumers what they want, and delivering it fully functional with high profile launches. Think iPod, iTunes, iPhone and iPad. Amazon is known for delivering incrementally based on customer feedback, with an almost machine-like execution. While no single product announcement from Amazon may give you an iPhone moment, the totality of the body of work is almost always impressive in retrospect. I should note before going further that it's not as though Apple has a strategic vision and Amazon does not - but Amazon is much  more willing to place smaller bets that can be adjusted based on customer feedback.

In the early days of founding my company, I drove an Amazon strategy. As I received customer feedback, I’d quickly respond with a new feature, and then use this responsiveness to gain more feedback from my customers. This was a great way to start building a product, and a natural way to drive a one-person business. But over time as the company grew, I realized placing only small bets based solely on customer feedback was putting at risk our ability to accomplish the big mission for which the company was founded (Henry Ford: “If I had asked people what they wanted, they would have said faster horses”). For a time I switched to the Apple approach, prognosticating what customers would want and delivering features they hadn’t directly asked for but we expected would want. But this too had its issues. In at least one case we delivered a feature too far ahead of the market (e.g. it is just now gaining traction almost a year after we delivered it), and in others we missed the mark entirely.

The right answer is of course somewhere in between. Startups need to have both the bold strategic vision of an Apple and the iterative execution of Amazon. They need to adjust the volume knob between these two approaches as required by the needs of their business. In the early phases, there is no company if you cannot iteratively execute to show value to prospective customers. But as the customer base expands and the company matures, sometimes you need to place a few bigger bets that have great risk and reward.

My SV investors opinion: you don’t build billion dollar businesses executing solely incrementally. Ah, it’s nice to work in SV. ;)

So are you driving an Apple or an Amazon product strategy?