So sometimes I divide the world into two different groups. Now the groups change from time to time. Sometimes the groups are hot dog eaters and non-hot dog eaters (not sure why anyone would not want to have a hot dog for every meal). Sometimes is it people that eat ice cream versus people that don’t (yes, there are some people that are lactose intolerant, like me, but they should just suck it up and enjoy the pleasure before the pain). And sometimes it is creative people versus anti-creative people. Notice that I said anti- instead of non- because many people that can’t create put up road blocks for those that can.
Well, the other night my wife and I went to a meet and greet for a new baby in our community. It was a nice enough affair, all the appropriate food and drink (that means it was not meant for me but for nice ladies that tea), beautiful baby and wonderful parents and family. As one of the events of the get together there was a beautiful nursey rhyme book where you were supposed to write something for the baby and parents to see. I am pretty certain that the baby will not remember this event when they are old enough to read what was written in this beautiful book, but perhaps they will think of the people that did the actual writing.
When it became our turn to write in the book my wife looked at me and said “give me something creative for the book!” As a backdrop let me tell you that in our family we have divided responsibilities. My wife is the fix it person and the bookkeeper. I am the cook and the creative one. If you gave me the instructions to put together a wagon you might end up with a camel. If you gave my wife a blank sheet of paper and told her to write something there might be fungus growing on the paper before you calmly took her away. She colors within the lines and I don’t even see the lines or understand why anyone would want to have lines.
None the less, the timer had begun. She wanted something creative and she wanted it about five minutes ago. As she was telling me to be creative that voice in the back of my head was screaming to me “yeah dummy, just push the creative button and spit something out. Just do a Seinfeld riff on why they call them diapers instead of poop and pea catchers. Or why diapers should have designs on them when the babies cannot focus past their noses.” That voice was starting to scream at me when it struck me. Non-creative types simply don’t understand what creative people do. While Renoir and Monet were certainly creative and talented, their creativity was much different than mine. Every creative person goes about their creative process in a different manner. My creativity is simply taking things to the next progression. Sometimes that causes a problem but most of the time it does not. And our minds tend to wander a bit. Now what were we talking about again, oh yes, creating something for the book.
Well, I looked at the nursey rhymes that were in the book and settled on one that had not been chosen yet, Mary had a Little Lamb. We came up with a nice extension of the poem that was cute and memorable (at least we thought so) and my wife wrote it in the book (my hand writing I learned in Medical School and I am not even a doctor). Everyone was happy.
In the past two years I have often been asked (actually just yesterday, hence the writing of this piece) of how we came up with the idea of Axcelora. Well, for me, it is not creative at all, but merely an extension of a thought process. If you ever speak to a professional sales person, one that is good about their job, they will tell you the most difficult task they have in the sales cycle in getting in front of a decision maker. If that process could be shortened in any way they would be forever grateful. In thinking through my own B2B selling experience I knew that when I was introduced to a potential client by a friend that I was much more likely to get an appointment and my sales success increased as well. So all I had to do was bring a lot of friends together and then we could introduce the world. In my mind not creative at all, just a logical next extension. Well, two years later and it seems to be working. We have about 50 Partners, a dozen or so clients and orders for 250 appointments.
So in the extension of my initial thought that they world is divided in two different parts I think there are people that can make appointments and those that cannot. But withAxcelora people those that can’t make appointments don’t have to be in the same bucket as those that can’t make sales. And those that can make appointments but can’t sell, there is now a way for you to leverage your Rolodex, all brought to you by the friendly folks at Axcelora. For more information about creativity or appointments please check us out at www.axcelora.com.
I assume you are reading this and saying to yourself that the author is a complete idiot. But, if you listen to my logic I think you will realize that this is what is keeping Amazon’s outstanding management team awake at night.
Since the beginning of Amazon, they have been able to sell the future to outside investors. First in books, and then in all merchandise Amazon has been the leader in low prices. They could do this because their goal was not profitability, but gaining market share. They had the backing of the investment community. So, normal retailers had to compete with a company that had no true conviction (in this writer’s opinion) to make a profit. And they could do it because the Amazon management team was smart, open-minded, and resourceful.
Amazon started AWS (Amazon Web Services) to sell the excess capacity they had from their computer power. In their quest to optimize the use of their assets, they were smart enough to say they had excess capacity and wanted to monetize it. They also knew they had much more intellectual power than small startup businesses would have. So, as any Rising Star should, they went and built this business from nothing where no one else was playing. This business has significant more margins than Amazon retail and contributes meaningful profit to Amazon Corp today. This then gives Amazon’s retail business the ability to put pricing pressure on all other retail competitors. And they are.
But, now comes the problem area. AWS and its soaring profits is the drug that Amazon is hooked on. Because of the growing popularity of cloud computing and AWS’s strong position in this business Amazon is counting them into the future. But there are some real competitors entering the market. Competitors with pockets even deeper than Amazon’s. While AWS I have read, has a 33% market share today, second on the list is Microsoft. But there are more competitors on the horizon with Alphabet, Oracle, and WalMart working to stake strong claims to the cloud.
What could make the difference is the structure of the business. Neither, Microsoft, WalMart, Alphabet, or Oracle rely on the cloud for their current profit structure. They all have significant financial war chests available to them and none of them is shy about earning market share.
So, let’s say that one or more of the four of them determines that price could make a difference in gaining market share. (And yes, I realize that pricing is going down rapidly already because the cost of computing is dropping faster than ice melts in the Texas heat.) They could all afford to bring the fat margins that AWS is now enjoying down significantly without hurting their core business. If those margins were to fall too fast for AWS, Amazon might have to change their retail business model.
So, is Amazon in trouble today,? Perhaps not. But smart people should be looking out for opportunities. WalMart is not in rumors to buy Jet.com because they don’t think they have an opportunity to compete. The pressure is going to be on Amazon for the foreseeable future. They have an incredibly smart and alert management team that has been able to come up with tools and products to keep them going forward. Only time will tell.
Rich Hollander is a retail expert with over 40 years in the industry.