Always Day One: How Amazon’s continued startup mentality drives innovation at scale

By Bart Brouwers

How does Amazon, one of the world’s largest enterprises, maintain a relentless pace of innovation while embracing its startup roots? Danielle Gorlick, General Manager of Amazon Web Services (AWS) for the Benelux region, was at the LEVEL UP 2024 event to reveal the four key elements of Amazon’s culture that empower the company to continue thinking and acting like a startup: customer obsession, speed of decision-making, a bias for action, and an organizational structure that fosters creativity and ownership.

Amazon Web Services (AWS), now a global tech giant, still operates with a startup mentality. As Daniella Gorlick, General Manager of AWS in the Benelux region, explains, Amazon has embedded the startup ethos into every facet of its operation. For the past 20 years, Amazon’s culture has been anchored by its “Day One” mentality, a philosophy introduced by founder Jeff Bezos in his 1997 letter to shareholders. This approach is centered on never becoming complacent, regardless of the company’s size or success, and constantly striving to enhance the customer experience.

“Our obsession with customers is the cornerstone of Amazon’s innovation,” Gorlick shares. “Across every business unit, we start with the customer and work backward.” This dedication to understanding and solving customer needs is a key driver behind 90% of AWS’s products and services, with the remaining 10% representing efforts to innovate on behalf of customers before they can even articulate their needs.

Four core elements of innovation

Amazon’s ability to maintain its startup mentality is rooted in four core principles: customer obsession, resisting proxies, high-velocity decision-making, and leaning into external trends. These principles guide Amazon’s decision-making, allowing it to stay nimble and innovative.

1. Customer obsession: As Gorlick emphasizes, Amazon’s focus starts and ends with the customer. By continually prioritizing customer needs, Amazon builds products that deliver real value. For example, when launching Amazon.com, the company envisioned a retail platform where customers could access a wide range of products at affordable prices. This led to the creation of the Amazon marketplace, which continues to fuel its growth today.
2. Resisting proxies: As companies scale, they often become overly focused on internal processes, losing sight of the customer. Gorlick warns, “You need to ask yourself, ‘Am I owning the process, or is the process owning me?’” Amazon actively resists this trap, ensuring that process adherence never supersedes customer feedback and needs.
3. High-velocity decisions: Speed matters in business. Gorlick describes Amazon’s approach to decision-making: “If you’re waiting to have 90% of the data before you make a decision, you’re moving too slowly.” To foster agility, Amazon empowers employees to make calculated risks, embracing a “two-way door” model. Most decisions are reversible, allowing teams to experiment, learn, and, if necessary, change course swiftly.
4. Leaning into external trends: Instead of fighting market trends, Amazon leans into them, using external changes as a tailwind for growth. This proactive mindset allows Amazon to stay ahead of industry shifts and continuously innovate in areas that align with enduring customer needs.

Leadership principles

Gorlick points out that culture is Amazon’s key differentiator. The company’s 16 leadership principles serve as guideposts for decision-making, hiring, promotions, and daily operations. These principles create a cohesive framework encouraging risk-taking, creativity, and customer-focused innovation.

“These principles aren’t just words on a wall,” Gorlick asserts. “They are actively lived every day.” One of the most important principles is the concept of “invent and simplify,” which urges employees to innovate while accepting the possibility of being misunderstood for long periods. This was evident when Amazon introduced the first Kindle, an e-reader that initially seemed clunky and out of place. Despite skepticism, Amazon remained focused on its vision to revolutionize the reading experience, ultimately creating a product that has transformed the industry.

Two-pizza teams

Gorlick also highlights the importance of mechanisms, architecture, and organization in fostering innovation. The “working backwards” mechanism is central to Amazon’s approach: before developing a new product or service, teams write a press release outlining its benefits as if it had already launched. This forces clarity and ensures customer value is at the forefront of every innovation.

Moreover, Amazon’s architecture enables rapid experimentation. AWS provides a self-service platform that allows both internal teams and customers to innovate at scale, reducing costs and risks. This approach has significantly impacted the startup ecosystem, with over 280,000 startups now using AWS.

To facilitate this environment, Amazon organizes its workforce into small, nimble “two-pizza teams,” named after the idea that a team should be small enough to be fed by two pizzas. Each team has complete ownership of what they build, fostering an entrepreneurial mindset within a larger enterprise. This structure empowers employees to act quickly and make high-velocity decisions.

Embracing failure

“Innovation and failure are two inseparable twins,” Gorlick states, underscoring Amazon’s acceptance of failure as part of the creative process. She shares examples like the Fire Phone, which resulted in a $170 million write-off but led to the development of successful products like the Echo and Alexa. The company’s willingness to learn from failure and adjust course has been crucial to its growth.

It brings Gorlick back to the start of her talk, quoting Bezos: ‘I knew that if I failed, I wouldn’t regret that. But I knew the one thing I would regret is not trying.’ “This mentality has kept Amazon on its Day-One trajectory, continuously pushing the boundaries of what’s possible in the tech world.”