Welcome to another special episode of our Capital Ideas Podcast, part of the limited series, The Power of Advice. At Capital Group, we believe individuals are best served through financial advisors, advice that can be critical to protect and grow their assets. Today, we have the pleasure of speaking with Andy Jassy, president and CEO of Amazon and the founder of Amazon Web Services. Andy has led Amazon from strength to strength during his tenure, and we talk about the advice and decisions that shaped his path to becoming CEO and how he fosters a culture of innovation with speed, intentionality and long-term focus. Andy, welcome to The Power of Advice.
Thanks for having me. I appreciate it.
I'm glad you're here. We have a lot of A's to talk about: Amazon, AI, advice. But I want to start with the A for Andy. And I think everyone, or most people listening, are Amazon consumers. I am, I know a lot of people are.
Which is a good thing. It's super user-friendly. What's the one thing that you've bought on Amazon recently that people would say, God, I can't believe the CEO of Amazon bought that?
I don't know if I've bought anything that surprising. Maybe Ruffles potato chips every Sunday. During the football season, I have three friends who grew up in New York who moved to Seattle around the same time I did, and we have this group called Giants Anonymous, and we're New York Giants fans, and we've watched...
You're no longer anonymous.
I know, well, this has been a tough year for us, but we have some pieces, just wait. It's coming, Mike.
We've been watching the games together since 1998. And so, I have to stock the, they're 10:00 a.m. games on the West Coast, so I have to stock it with bagels and then an array of potato chips. People forget we have the third largest grocery business in the U.S. It's a $150 billion business in groceries. I often wake up early Sunday morning and order it, and it's there by game time.
That's a good tradition. Early on for you, you were an athlete. Soccer, tennis, other sports, I'm guessing. What made you say, You know what? I'm going to stop. What caused you to give up on that?
Yeah, I just wasn't good enough. I mean, growing up, I really wanted to be a professional athlete.
That was your goal, then?
That was my, I have a very sports-heavy family. My dad is a sports fanatic. From the time I was three years old, he was taking me every Sunday to the Giants games and to the New York Rangers games. I played as well and I wanted to be a professional athlete, but as I became a teenager, and then I played a little bit of soccer in college, I just wasn't good enough to be anywhere near being a professional. And so, that's why I stopped. But I feel like sports taught me so many amazing lessons that have been so useful in my life. Tennis really taught me the value of hard work, what hard work looks like and what you get from it, and what happens when you don't. And then, I also think that it teaches you how to move on quickly. You can have your best win of the year at 9 a.m. on a Saturday, have lunch, and go out and play a match at 2 p.m., and it's all gone. You lose to somebody you shouldn't and you play terribly. It's totally different from the morning. And so, you have to learn when things go well, you have to move on, because you have another match to play. And when things, when you don't win, which is most of the time, you also have to find ways to get back up and to move on and turn the page and keep moving and take the good from the experiences. And so, I just feel like sports has been incredibly impactful in my life. I wasn't good enough to be a pro, but I'm glad I had the chance to do it.
So, you've tried a bunch of things, and before you got to Amazon, sportscaster, maybe paralegal, investment banking. Is there anything you didn't try that you looked back and said, I wish that was one of the things on the list that I did try?
Well, I did, I tried so many things, and it wasn't really by design. I just didn't know what I wanted to do. And I tried, I wanted to be a sportscaster. Then, I did sports production. I coached, I was the assistant coach of my high school soccer team. I worked in a golf retail store in New York City. I tried sales. I was a paralegal one summer. I did investment banking. I started a couple businesses. I think when, if you don't know what you want to do, it's useful to try. And I think at that age, it's almost as useful to know what you don't like doing as it is to know what you do like doing.
All right, let's move on to another A. Let's start talking about Amazon. When you started working with Jeff, I know there were times where you had to go in there and you're presenting ideas. And at one point, you had a really long deck. And I watched you on another podcast, and it was a really interesting story where there were a few things with the deck that weren't great. So, whether it was the accuracy or whether it was the length, it wasn't the best deck you'd ever presented, but you had a good story behind it. Can you share that with us?
Yeah, at the time, I was co-leading our marketing team. This was before we moved away from PowerPoint to doing narratives. And we had about a, I don't know, maybe a 180-page PowerPoint presentation.
Super long, super long deck.
Crazy, and it wasn't that unusual at that time.
And it was marketing for the whole company. And so, the meeting was a six-hour meeting, and it was our operating plan. And the plan was I was supposed to present the first 80 of these, and then my partner was supposed to do the next 80. I was about six or seven slides in, and I started to present a slide on customer retention, and Jeff interrupted and said, All the numbers on this slide are wrong. And I said, Why do you say that? And he started to go through a couple of the numbers. And you know when someone is, like when you have something wrong and someone starts to dissect it, and you realize, Uh-oh.
There was that moment, like, Oh, yeah, that's wrong.
As he was talking, I realized, He's right. And so, he got done. I said, You're right. The numbers are wrong. And he said, Well, why should I trust anything I hear the rest of this presentation? I said, Well, I hope you will, because we have like 173 more slides to this deck.
If you didn't like what you saw on page three, I got 173.
There's a lot more coming! And we got through the presentation, and I would not say it went well. It wasn't as bad as that the whole time, but there were all sorts of things we didn't get quite right. But in many ways, it was a real positive turning point for me at the company and in my own professional career, because probably my biggest fear every time I got to different levels in the organization was presenting to new people, was that they would think I was dopey and that was going to be the end of my career.
Imposter syndrome, right?
Yeah, so my worst fear always was that I would be up in front of people and they would realize I didn't know what I was doing or didn't know what I was talking about and what would happen. And here was, really, my worst fear, and it was okay. I got through it. I think we represented ourselves well. I think we got a number of the points we needed to get across. And then, I got back to work the next day, and people seemed to still treat me like I belonged on the team. And that was a really good, it's an obvious lesson, but I think it is a fear that a lot of people have. And most good companies with most good leadership teams realize that who you are is broader than just one experience.
I think that's right. Let's dial back to AWS, because I think Amazon Web Services is pretty remarkable. Talk us through how you saw a problem that you thought AWS could solve. And today, obviously, it's where it is, which is an industry leader. But how did that come about?
Well, interesting, just following on the story I was just telling. A year later, Jeff asked me to, Jeff Bezos, our founder and CEO at the time, asked me to be his, what he called at the time, his shadow, which really was most closely akin to a chief of staff role. And in this role, I spent all my time with Jeff. I spent time in all his meetings, including his one-on-ones, which didn't really make them one-on-ones anymore. And then we would talk every week about the things that we felt like we needed to drive differently and divide and conquer, how to do that. And because I'd been at the company for five years and knew a lot of the people on the team, I was able to help Jeff with that. One of the things that was really frustrating us around that time was, even though by most companies' standards, we moved pretty quickly at Amazon, we just felt like it was too slow. I would say the time I've been at Amazon, which is 28 1/2 years, we have always felt like we moved too slow, even though we move a lot faster, I would say, objectively, than most companies. It's never fast enough. And so, this was really bothering Jeff. We didn't understand why we couldn't go quicker. And I would talk to a lot of my peers, and they would say, Look, I think it's great that you and Jeff think these projects should take three months end to end, but I spent three months just on the compute solution, or just on the storage solution, or just on the database piece. And all my peers are doing the same thing. We're all recreating and reinventing the wheel, and we spend about 70% to 80% of our time on all the infrastructure pieces, and only about 20% to 30% of our time on what differentiates what we're trying to build. And again, in retrospect, it seems fairly obvious, but at the time, we really didn't understand that. And that made us think, if we could flip that equation on its head, we could move so much more quickly. So, if we could take what really is the undifferentiated heavy lifting of infrastructure...
The foundation, the infrastructure.
Yeah, you have no technology if you don't have the right compute and storage and database and analytics and messaging and content distribution. All those things really matter, but they rarely are the pieces that differentiate your customer experience. So, if we could take that undifferentiated heavy lifting and do it...
in a scalable, operationally performant, cost-effective way so that all our own builders could focus on what was unique about the customer experience they were trying to build, we figured that would help us move much more quickly. And as we started defining what that might look like, you pretty quickly realized that other companies have the same problem, the same challenge. And we thought, if we had this issue and we were a strong technical company, a lot of other companies would probably find benefit and solutions there. And that's how we started going about building AWS. We launched it in early 2006, and it grew quicker than we thought, and it's become a pretty big business.
But you were owning that in your mid-30s. I mean, that's a pretty transformational project for a company the size of Amazon to own. Even though Amazon was smaller back then, it's still a material company, and you were owning this massive project in your mid-30s.
That's an important leadership role. So, you're a shadow for Jeff, but you're also driving what now is a real driver for Amazon organization.
I left that shadow job to go lead that team, build that team, and build a set of services. And in the beginning, for the first few years of AWS, people inside the company and outside the company, but at first, nobody knew it outside the company. People in the company thought it was kind of nutty.
Yeah. We're a retailer, what is this? This has nothing to do with retailers. It's actually developers who are customers. What do we know about developers? Early on in AWS when we were building the first set of services, almost every month, one of the best people on my team would come in, a different person, by the way, a half dozen would come in and say, Why are we doing this? Why don't we just build APIs for e-commerce? That's what we know. Who's going to buy compute from us? Who's going to buy database from us? I would have these conversations and I would say, Well, look, we can always go back to doing the commerce APIs, but if we want to go after the broader infrastructure opportunity, we have to be first to market or we probably don't have a chance. Because people didn't know us as an enterprise technology provider. I remember, I would go home at night, and my wife would ask me how my day was. And I would say, I feel like, every day, like I'm almost doing therapy for the team, for myself. And she would say, Well, are you sure this is going to work? And I would say, I have no idea if it's going to work. I really don't know. But I think for...
I think we, there were some signs internally that this was needed, but whenever you're doing something new, you don't really know. But I think when the team and I started to get focused on what we could control, we were much better off. We couldn't control if people like the services, if people were going to use the services, if people would stop building on-premises data centers and use these cloud services. But we could control who we hired, what products we built, the technology we used, the pricing, all the go-to-market pieces, the customer experience, the security, operational performance, the delivery of it. And so, once we got focused on controlling what we could control, we just had a lot more success and a lot more fun. And so, being in my 30s at the time, I just thought it was another new business I had a chance to be a part of starting. I don't think anybody, including our team, thought it was going to be as big as it turned out to be. I don't think anyone was feeling like, Oh, my God, we're working on this job. I mean, it is now a $132 billion annual run rate for AWS, but back then, we were just consuming a lot of capital and operating income and hoping we could build a business that really mattered for customers.
One of our core values at Capital Group is client focus. One of your 16 principles at Amazon is customer obsession. Let's talk about that a little bit. You have a lot of different customers, you have these different businesses. How do you keep this massive organization focused on the customer? Because the customer's not stagnant. It's a moving target. Their preferences change. How do you keep the team focused on that?
Well, I think there are several ways you try. The first thing is who you hire is the starting point. When we hire people, we try to disproportionately hire for people who seem to really have passion about providing amazing customer experiences, and that is the compass for what drives what they want to do and what they want to accomplish. So, I think we inherently have a number of customer-focused people, and you have to find ways that reinforce it at every turn. When we hire people, when we promote people, when we give people's reviews, it's always based on how they perform against the leadership principles. So, if somebody is not being customer-focused enough, they're unlikely to get hired, they're unlikely to get promoted, and they're going to see it in their performance.
