Where is Alexa Plus and how is the battle to bring you a personalized AI assistant shaping up? We'll talk about it with Amazon's head of devices and services right after this.
Welcome to Big Technology Podcast, a show for cool-headed and nuanced conversation of the tech world and beyond. We're joined today by Panos Panay, the head of devices and services at Amazon, who is here in studio with us to talk about the state of Alexa Plus, where the battle of AI assistants is heading, and plenty more. It's great to see you, Panos. Welcome back to the show.
Thanks, man. It's great to see you, too.
So, we spoke last in the spring.
March, when you just had your March event. And the promise at that event was within a month we were going to see Alexa Plus.
What is the state of the rollout? Because we've had folks who have listened to that episode on this show who have said, "I'm waiting." All right, send me a note. If you're listening, send me a note.
Who do they send it to? Where do they send it to?
All right, I can't, I've got to be careful giving out my email. I think you might get me going. I'll give it to you, you give it to them. You can write to
[email protected] and I will forward it. Do it. And anyone who wants access, we're giving access. Over 10 million people have access right now. But, you know, that's out of what's been reported to be 500 or so million devices.
Large numbers, very large numbers. Yeah, so yeah, the first 10 million, but it's a rollout. So, we call it early access. It's been pretty extraordinary. Like the people that use it, it's been fun to watch getting the feedback both ways. Like, you know, where it can be better but also just the energy around the usage, how it's being used, has been pretty remarkable.
And you know, you kind of learn, you think about Alexa, we're rolling it out slowly for, I think for reasons that we just have to make sure our current customer base, you never want to abandon your current customer base, you just can't. And while it will work on 97% of devices out there right now in people's homes, we still want to do it in a way where when we switch people over because they choose to, that they feel great about it. And so it's right now because early access is, hey, ask for it, we'll give it to you. It's that simple.
End of October though, just so you know where it's at, we're going to be rolling it out to everybody. If you buy a new Echo device, we launched four new Echo devices yesterday. We're pretty pumped about it. Or I'm pretty pumped about it, maybe. But all those folks will get it right out of the box.
This show will air right around then. Everybody will get Alexa Plus if your device is compatible or if you buy a new device.
Yeah, you'll opt in if you want it. Like, we're not going to just give it to anyone because, you know, people love their classic Alexa and we want to just serve our customers like the way they want to be served. But I think everybody should get it. So, I think it's good that everyone's going to get it.
Or have the option to. I want to ask about this sort of gap in time because we watched the live demo on stage in March. And then the notion was it was going to come out the next month.
And I read that at least as everybody was going to get it in a month, not a small section of people. And was there a difficulty in getting the technology to work that led to that delay? Or was it you saying we just need to test a little bit more? What happened?
Well, the way what we had done, we had asked for if you wanted to get it, you know, email me when ready type of thing, like create a list and we're going to give access to customers as they go.
And then as the product continued to develop and finish, it was then rolling it out slowly to make sure because you have to learn that all environments are so different. And so the whole concept and construct was learn as we release. And so we had basically tranches of customers that you release to that were on this list. And we got it to everybody who's asked for it at that point.
And then that list continued to grow and then we continued to release it. But it really was about, yeah, making sure the product was refined to a point that when we did put it in people's homes that they were both excited about it but then can use it for everything that they're already using it for. There's some nuance on how you would use it and you're kind of learning to use the new Alexa, not complicated, just nuanced. And so it was just a little bit more methodical.
I would say we rolled it out as we intended but also it did feel a little bit slower than I think what people expected. So, maybe it was about how to balance the expectation versus what we delivered.
I was listening back to our conversation from March and a topic came up and I was like, "Wow, I can't believe I didn't ask a follow-up on that."
And you've already brought it up now.
Which is that you have to think about... And then I came back for more.
You're back for more. I'm so... By the way, I have to say, no, it's great that you're here. Sometimes there's some people who would probably think, don't do it. Don't do it.
No, but we should say it's great that you're here. For many years we didn't hear from Amazon executives in the way that you're having a conversation today, so I'm thrilled that you're here and I'm thrilled we're able to talk about it.
This is not... And you've been doing this 5 years.
5 years. Doing this 5 years, we just celebrated our 5-year anniversary.
Rad. I mean, and I think that's cool. 5 years in. I'm sorry I couldn't make it last night but that's a very cool thing.
But I was also, I mean, I was covering Amazon long before that as a reporter and wrote this book called Always Day One. And this is why I was upset that I didn't follow up. And it's not a gotcha. It's actually I want to learn a little bit about your product philosophy.
Always Day One is something Jeff Bezos popularized within Amazon. To me it always meant you build as if you're a startup. And the nice thing about being a startup is you don't have a flagship product to maintain. And I think the message from Bezos, if I read it right, was a lot of big companies spend their entire existence trying to maintain their flagship product and they don't build for what the market needs at that moment. And that's the nice thing about being a company on day one, you just build what the market needs.
You can start from zero. Yeah. And so that sort of brings us into this conversation of how you approach the Alexa customer. You said in our last conversation and just now, you have to be careful about the way that the current customers are using the product when you're introducing something new. And there's that leadership principle within Amazon, customer obsession. You obsess about what the customer...
Yeah. And that's where that comes from.
And then there's that balance between...
And believe me, by the way, if you don't do that...
You just... you lose trust.
Right. But then lose trust with the customer, you lose it overnight, Alex. Like at a level that they don't come back. You know, if they didn't ask for it and even if they did and you didn't give them what they wanted, you lose trust and that's such a big deal.
And if you're going to be obsessed, but go ahead. There's a dichotomy here, I got it. I think you see where I'm going because this is like a core question about Amazon in the age of AI. Is can you hold that customer obsession, people who love your current flagship product, and that Always Day One value together and have them work in sync?
You can. You absolutely can. But, you know, one of the most incredible parts of Amazon is there's a level of patience to construct like where are we headed.
And a lot of time invention takes time. It doesn't mean you're not being relentless. It doesn't mean you're not acting as if it's day one. Like with Alexa Plus we are being relentless. If you just look at the breadth of what it can do, with the amount of APIs it can call, with the amount of experts that are embedded, the fact that you can be a full conversational assistant and call them, this takes time.
And you know, when you have hundreds of millions of customers, the things that they do, the things that they connect with. I think we talked about this last time. I don't necessarily want to get into that, but I think you can still be relentless and you can still act as if it's day one and never dismiss or not put your customer first. It's very real.
And I think that's what we're doing right now. So, when we're building, when we're creating, when we're focused on the product that we're just getting after, it is relentless. Like we are going as if we're not like year three, slow down, where is the... or year five or year 10, where is the customer at? Let's just look at the data. None of that's happening. Right now it's full speed. What does the customer need? Are we sure we know what the vision is? Are we locked in? And then the team pushes. Like we're really clear where we need to go.
Then there's the commitment to the current customer. But by the way, you're also relentless about that. And this is one where, you know, I see that dichotomy like, well, you have to serve your customer. That doesn't mean it's not day one. It just means every day you wake up worried, thinking, understanding, learning about the customer but then acting with, you know, the same passion and relentless focus you need to move the ball. And I see that happening on Alexa right now.
But okay, so let's go one level deeper. And I could be wrong about this but I'll give you my read of what Bezos was saying with Always Day One. And since you're in the company, you can help me get to the truth.
I don't know. I mean, you know, this will be tricky. I'm not sure I can get in the minds of everybody but I'll do my best.
So, I came into my reporting, I wrote a book titled Always Day One. I came in thinking that Day One mentality meant that you just kind of work 24/7 and you have that relentlessness. And after spending time reporting on the culture of the company, my perspective shifted a little bit and it was a message to me, it really meant it was a message to the company: don't worry about what got you here at this point.
Yeah. Flip when you need to.
And one example is amazon.com, which was this first-party marketplace, flipped effectively to a majority third-party marketplace, which, you know, caused real disruption with the first-party vendors who were used to, you know, working with a certain system and now found internal competition. Now for the customer, on the customer side, you never really realized or saw that disruption because it was all taking place effectively on the back end. But with AI it's different because, you know, if you have a system where you're like, all right, it doesn't matter what got us here, let's build what the market needs, the customer can feel that disruption.
Yeah, I think they can for sure and that's where the patience comes in. But I still, even as you say it, I go, but the mentality remains this relentless day one.
You know, for the first, think about it with activating the first 10 million customers, it's a switch. It's not... we literally build, go, take it, move. And that engagement happens, we learn as fast as we can and then we're continuing to iterate. So I feel like the spirit of it remains.
But I don't think you ever abandon your customer. I don't think that would ever happen. If you're acting in a kind of day one mindset, you're serving the customer.
Right. And so the change is okay. Your example, I wasn't there for the transition, but I will say, let's just use Alexa as an example. Right now, you know, we are building on the spirit of like when they're ready, go. And they meaning the customer when they want it. You know, day one is about building, creating, knowing where you're headed, starting from zero, making it great, and then, you know, part of that is bring your customer along. It has to be, you just never leave them behind.
But to your point, I think your example might be perfect. I'm sure there's a team that was going full speed. I don't know the details so I can't... I got to be careful, I never want to be presumptuous, but now you end up in this place where if it serves the customer, then serve them. And I think that's what happened.
Again, I wasn't that close to it, but when you think about Alexa, the same thing's happening right now. I'm not even trying to obfuscate. I mean, as you say it, I'm like, I think that's exactly where we are.
And I'll say that humbly because I always worry like, oh, I'm overstating it, or I'm like, you know, I take so much like, Alexa should be this much better and it should have been done, you know, you should have known this. And you're like, okay. We have a team that's pretty passionate, they know what they're getting after. But I'll never leave, we just won't leave the customer behind. I just won't do it.
Yeah, I think it's one of these things that's happening with a variety of big tech companies today which see the promise of generative AI, see the bumps of generative AI, and are deciding how quickly to bring it forward in their products without alienating those who love their flagship products. Like we had the people who were running search at Google in here a couple weeks ago, a couple months ago, and it's that balance of like you have this great traditional search product, people use it, a lot of people use it every day, and then when do you decide to flip it and make it AI mode?
And I think it's very interesting to see all these companies going through this moment of when is it time to flip that switch to generative AI because like you mentioned when we spoke last, a startup can do it quicker because they don't have to worry about their current customers.
Yeah, and I think you can... it doesn't mean they build it quicker, it's just they don't... you know, you start from zero and you build up. You know, versus starting from hundreds of millions and handing it over. I think that's just reality. But it doesn't mean we're not fast or not... that's where I take exception to like when I hear it. I flip your perspective on it. Like, what's taking you so long? Like, wait, hold on.
There's no other agent out there or kind of assistant that's using, you know, tens and tens, 70, 100, I won't give you the amount of experts, but those experts also all of them looking across, calling hundreds and hundreds of APIs and being able to serve. There's no other expert out there that I can send...
My daughter, you know, she's 15, man, she's amazing and she's trying, she's learning, she's playing on the golf team at school, which is kind of a weird thing. She's just... and I just wanted to see, like, I want to get to a match. And so she sent me a picture of her schedule.
It was a picture, you know. And she's like, can you come? I'm like, yep. So I take the picture, I just share it with Alexa. All right, in that moment, Alexa sends me a notification, I open the app, the app says, do you want me to download everything here or do you want me to add everything to your calendar or do you just want some of these things? And in the future, it's a very smart, it's just a gentle nudge and it's like, do you want me in the future, do you want me to add them all or do you want me to ask you again?
I said, just in the future, add them all, thank you, add everything. My calendar populates with the location, the name of the school they're playing against, a link to directions, and, you know, basically the calendar entry. And then it comes back and says, here's a few conflicts just so you're aware, maybe you want to resolve them, and here's what I suggest.
Okay, what just happened?
Not to me. You added a calendar event.
No, I gave it a picture. And now, of course, it can read the picture, but in most cases it just spits out, here's the summary. That's not what it does. Here's the summary and then went and took action. And then updated the calendar and then Mary, my wife, got the updates on her calendar.
And so now all of a sudden I think for the first time in like our kids' high school career we actually have the kids' like sports calendar on our personal calendars because it's always so hard, you know, it's like over here, over here, over there, you have to manually enter it, nobody's going to do that.
Yeah. Yeah, it's like doesn't happen and then there's just like an argument, it's Monday, like, are you going to go see... is this on Thursday? I'm like, I didn't even know it existed, like, why didn't you tell me? Like, well, you don't... you remember the mail, you know, you're like in this place.
But now it's all solved like that. But what happened there was an expert, the calendar expert, there was a communications expert, there was an understanding the document expert, then there was APIs called where you're turning on calendar entries, then checking against old calendar entries, and then updating others. And when you start seeing that all happen, yeah, that's pretty... it's incredible work, but I look at it and go, no, it's just not happening anywhere else.
It's not a simple piece, but it's so delightful when it does happen, you know. And back to your original point, like that is a great feat of engineering at speed and just kind of product making that we're pretty proud of. And then you start seeing it and when we say like being day one, like there's nothing that holds that back. There's just nothing. You're starting from zero to create that.
And then that's when you're serving a customer and that's an added value to something they didn't have before.
Right, you shared some stats about those that do have Alexa Plus using it much more often.
Yeah. Three, what is it? Can you talk about...
I mean, I have it written down somewhere.
