Amazon’s ‘Working Backwards’ Process is the Key to Their Success

In the ever-evolving world of e-commerce, one name that stands out as a pioneer is the global giant Amazon. Founded in 1994 by Jeff Bezos, Amazon began as an online bookstore in a garage in Bellevue, Washington. Over the years, it has transformed into the world’s largest online marketplace, offering various products and services. And it’s all because of a business strategy that has remained unchanged over the years. So, what is the secret behind Amazon’s successful business? It’s the ‘Working Backwards’ methodology! Read the article below to learn more about this process.

Working Backward – Transforming the way you work

Most of Amazon’s major products and initiatives since 2004 have one very Amazonian thing in common – they were created through a process called ‘working backwards.’ Amazon pioneered this methodology under the leadership of its founder, Jeff Bezos. Jeff believed that the key to Amazon’s success was its relentless focus on the customer, which led to the development of the ‘Working Backward’ practice. This approach has been a cornerstone of Amazon’s business strategy and has been instrumental in its growth and success.

Working Backwards is basically a problem-solving and product development approach to create new products, services, or features. The method is applied in the following format:

• Begin with the customer: Understand the customer’s needs, pain points, and the experience you want to deliver. Then, define the customer’s vision for success.
• Determine the end outcome: Identify the ideal end state or final outcome, both for the customer and the business. This serves as a guiding light to move forward.
• Work backward: Break down the end outcome into smaller, actionable steps or sections. Each step should move you closer to the desired outcome.
• Prioritize and iterate: Prioritize the steps and iterate on the plan while simultaneously seeking feedback. This will help you refine the approach as needed.
• Build and execute: Develop and execute the plan with a focus on customer-centricity.
• Measure, observe, and improve: Continuously measure, learn, and adapt based on customer feedback and data to upgrade, innovate, and polish the solution further.

Using the Working Backwards approach requires the team to address difficult discussions early on. This includes fully understanding the product’s value proposition and how it’ll be presented to the target customers.

Example of the ‘Working Backward’ Method in Action

This method has been used by the tech giant to develop many of its most successful products and services. Amazon Prime is the best example in action. Amazon recognized that customers need fast, free shipping and started working backward from this need to develop a subscription service that offered this benefit. This service was successfully accepted and has become  the greatest driver of growth for the business model.

Available in 23 countries worldwide, Amazon Prime now has over 200 million members. Sales during Prime Day on Amazon reached $12.9 billion in 2023. The average Prime subscriber spends about $1,400 per year.  Whereas, nine out of ten people get an Amazon Prime subscription only because of its free shipping.

The core benefits of working backward

While it may sound illogical to start a project from the endpoint, the results can be extraordinary and exceptional. Some of the benefits of Working Backwards are listed below:

The focus remains on customer experience

Starting with the end goal provides clarity and a clear sense of purpose for all team members. The process immediately puts each team member in the shoes of the customer right from the time the idea is launched. It ensures everyone understands ‘why’ they are developing a product, and not just ‘how’ to create it.

Saves time

The working backward process involves a huge amount of work, however it helps save time later.  With this process, you can recognize a mismatch at an early stage, which will help you take action and make changes accordingly. It’s designed to save a lot of work later and ensure everyone is building the right thing from the start.

Fosters innovation

This method offers a conducive environment for nurturing innovative thinking, enabling individuals and teams to explore unconventional solutions and approaches. It embraces long-term thinking and empowers teams to create a thriving and sustainable business.

Using the Amazon method: Tech leaders need to be prepared

Working backward is an iterative process. Hence, as a CTO, don’t expect your team members to get it right the first time. Instead, be encouraging. Even if the project has a lot of work or you gave a lot of course corrections, give it in a positive tone and encourage the team members to act on the feedback and come back. This way, you will build a creative team and let more people generate new ideas.

Also, when reviewing the solution, look for opportunities to simplify and enhance it. A solution that solves 90 percent of the problem in a simple, neat way is much more likely to be effective in the market than one that solves 100 percent of the problem but is complex or time-consuming to understand and use. Remember, as long as there is progress, things will be good.

Lastly, to conclude, the ‘Working Backward’ method is not exclusive to Amazon. Many other companies have adopted this approach in their product development processes, by recognizing the value of starting with the customer. This approach has been successful and proves to be fruitful in the long term.

In brief

The Amazon method has been instrumental in driving the company’s success, and for good reason. The practice serves as a guiding light throughout the project/product development process, ensuring that all decisions and actions are aligned with the original vision, further helping the team to stay focused on what truly matters: ‘creating a customer-centric product’.