- Amazon's customer reviews and ratings technology was built to solve one of the online giant's first big problems: convincing people to buy without physical verification.
- Former Amazon executive Dan Lewis, who now runs trucking logistics company Convoy, says the solution worked, but the team ended up being too protective of it.
- Thinking of a problem as being endless, and recognizing that the solutions will change as technology does, is critical to success.
Dan Lewis, CEO of trucking logistics start-up Convoy, spent many years at Amazon before founding his own company. Among the biggest projects he worked on as Amazon's general manager of new shopping experiences was helping to build an online ratings and reviews model. It was a big problem from the online retail giant in its early days.
"The original problem we were trying to solve at Amazon was customer confidence. You can't touch, see, smell — how do you get confidence to buy?" Lewis explained at the recent CNBC Technology Executive Council summit in New York City.
Peer reviews, with a rating of one to five stars, solved the original customer confidence problem. But in that success, Lewis says he learned a key lesson about setting oneself up for failure, a lesson he vowed he would not repeat at his new company. In a nutshell: falling in love with solutions rather than never-ending problems.
"We didn't name the group that works on the problem the 'customer confidence team.' We named it the ratings and reviews team," Lewis said.
Amazon employees like Lewis who worked on the original solution became convinced their job was to make ratings and reviews better, instead of thinking of other solutions, and newer technologies, that could solve the problem better. It took other teams within Amazon disrupting them internally to build new solutions, such as ways for buyers to ask questions of merchants before making purchases, for Lewis to realize the magnitude of the problem. Amazon disrupting itself was a success — it just was not a success that was spearheaded by the original team problem solvers.
"Oftentimes you protect the thing you built versus remembering the existential problem you are trying to solve. Problems are evergreen. They tend to last for a long time, but the solutions that come along to solve them change and depend on the latest technology, and the thing every team at our company is trying to do is solve a problem, not make their solution successful."
"We've changed how we've gone to market several times in five years," Lewis said.
The approach is working for Convoy. On Wednesday, it announced a $400 million funding round co-led by Al Gore's investment firm that nearly tripled the start-up's valuation — from $1 billion to a reported $2.7 billion.
"It's in the operating principles for how we run our business," said the co-founder and CEO of Convoy, which was named to the 2019 CNBC Disruptor 50 list.
In fact, he said the concept of loving problems is among the operating principles built into everything Convoy does, from how it writes job postings and interviews job candidates to performance evaluations and product testing.
"We created this specifically to hedge against the innovator's dilemma," he said, referencing an idea made famous by Harvard University business school professor Clay Christensen who was one of the early academic thinkers on the topic of business disruption.
"We we when write job descriptions, we encourage those writing them to say we are hiring people to solve these problems for us, not do X,Y, and Z tasks. We make sure teams don't fixate too much on A/B testing, perfecting the solutions they built and forget about the original problem they were trying to solve," Lewis said.
Access to entertainment is an example of the "evergreen" problem throughout history that he used to explain the concept to technology executives at the CNBC event — evolving from stories around a campfire to theaters, movie theaters, home entertainment, VCRs, DVDs, and streaming.
"If you think about this each one was solving the exact same problem: How do I get entertainment? But the solution changed based on technology over time. So often companies forget to go back to the original problem. Teams are so motivated to make the solution they created work, they forget that."
Convoy does not have a back-end tech team or apps team or iOS team. It has teams that focus on the experience for truck drivers, the shipper experience, even a "reducing-empty-miles" team.
"Those teams are constantly asking every quarter, is there a new solution, a new technology, that can help me solve the problem better, and help us from falling into a world of not disrupting ourselves."
Waste in trucking — the root problem that Convoy is tackling — was originally solved by companies trying to plan routes better, by loading trucks better. Then people started building better relationships with truck drivers and loading docks, human-to-human interactions. Planning was how people solved for efficiency in trucking for a long time. And then the smartphone came along.
Around 2014, when all the telecom companies started providing a free phone upgrade option — the iPhone 5C or cheaper model of the Samsung Galaxy — with unlimited texting and data, "that's when truck drivers started to get smartphones," Lewis said. "They start buying into it and we could see where the trucks were, and we could directly connect with shippers, say 'this is right truck for this job, instead of 200 miles we can find one 20 miles away and stitch together two jobs as one.'
Figuring out the right job, or jobs, for the right truck, was a solution to the waste problem.
"We're constantly thinking about how to innovate and remembering the problem is reducing waste and endless capacity. Zero waste is a never-ending problems for us," Lewis said. "At any stage, any size company, recent or not, the mindset of orienting teams and employees around problem-solving and stepping away from being in love with the last solution they created frees people up to disrupt themselves instead of protecting what they've built, to change the way they are doing thing and pick new technology and feel successful."
Lewis shared Convoy's list of core values at the CNBC Technology Executive Council event.
The slide Lewis shared did reveal one lesson about ways to solve problems — in this case the problem of effective communication — that he didn't take from Jeff Bezos. The Amazon founder and CEO has been very clear about how much he hates Microsoft Powerpoint.