3 Lessons from Amazon’s Fire Phone Fiasco

Execution, charismatic leadership, and doubts.

January 7, 2015

Why has the Fire Phone been such a disaster? Carr reports that Bezos modeled his behaviors around the phone design on Steve Jobs. Every decision about the phone’s design went through Bezos. 

The problem is that:

a. Bezos’ sense of style is at best questionable.
b. Amazon has very little experience with design and manufacturing of sophisticated devices that combine hardware and software (Kindle’s e-readers are relatively simple, Kindle tablets are basically cheap).
c. Amazon’s brand, unlike Apple, is built on volume and low-margins - where the Fire Phone was conceived as a premium device.
Today, a Fire Phone with an AT&T contract can be had for 99 cents. This is down from the original $199 price. Even at no cost nobody is buying Fire Phones, and Amazon has taken a $170 million write-down due to unsold inventory.
The Fire Phone that nobody wants was actually expensive to develop. Carr reports on the Dynamic Perspective technology, the system that makes Fire Phone apps look 3-D, was a feature that Bezos demanded. This complicated display technology, which took years to develop, has the small problem that nobody seems to want their phone displays to be 3-D.  Bezos insisted on the 3-D screen, even though his design team could not come up with any good uses for feature.  
Are there any lessons for higher ed in the Fire Phone story?  What can we learn from Bezos and the Amazon phone that can inform how we think about innovation and risk taking in higher ed?
I’ll offer a few thoughts, maybe you will add your own.
Lesson #1 - An Amazon Phone Is Probably A Good Idea - Execution Is The Real Challenge:
The Fire Phone is a poorly executed product, but this does not mean that building a mobile device does not make sense. Amazon knows that the future of digital sales, be it shopping or content consumption, will be on mobile devices.  It makes sense for Amazon to try to control the platform. What Amazon should do is offer a better value smart phone.  One that is not only cheap to buy, but has much better terms for cellular data.  Everyone hates the cell phone companies. If Amazon could buy spectrum, or buy an existing wireless provider, they could up-end the mobile market simply through offering fair pricing and better customer service.
Our lesson is that good ideas are easy, execution is what is hard.  We know that higher education needs to be more flexible, more affordable, and more learner-centric.  These are easy goals to set and hard goals to execute on.   
Lesson 2 - Charismatic Leadership is Overrated:
As much as we admire Apple products, none of us wants to work at an institution where anyone acts like Steve Jobs. Organizations based on shared governance, collaboration, and distributed authority may not be as nimble what Bezos tried to create with the Amazon phone group (and what Jobs created at Apple), but they are resilient. We give too little credit for higher ed’s ability to continually adapt and re-invent itself over very long time periods.  
In the Fire Phone case, Bezos would have been wiser to set a big direction that Amazon will have build and sell a mobile device that enabled customers to interact directly with Amazon’s products and services. I bet that the smart people who work at Amazon would have come up with a low-cost phone that was bundled with Prime, and maybe even came with subscriptions to Kindle and Audible books. I would switch to an Amazon phone if it lowered my costs for digital book buying.   
In the higher ed instance, leaders should set big directions and provide large goals.  Leadership needs to then be confident enough to step back and let the smart people in the organization figure out how to execute on the big goals.   
Lesson #3 - We Shouldn’t Stretch the Lessons for Higher Ed from the Consumer World:
I’m guilty of seeing the world through the lens of higher education. Whenever I read about a business or leadership failure (or success) I immediately wonder what that failure (or success) can teach us about higher ed.  The wisdom of this higher-ed centric approach is debatable.  Are there really lessons for higher ed in Amazon or Apple or Google or Microsoft of Facebook - or in GM or AT&T or Walmart for that matter?  Maybe.  But in most ways higher ed is different. We are perhaps more like publishing, maybe closer to the news business, but definitely not like technology vendors.   We are mission driven, largely not-for-profit, and our product is people development, credentialing, and knowledge creation.  (Or maybe something else, or many other something elses, we could probably debate what higher ed does forever).
Recognizing the limitations of trying to learn about higher ed from sectors outside of higher maybe buys us some latitude. The fact is that the Fire Phone is an interesting story, and the only way that I know to think about Bezos and Amazon is to think about that story in relation to our own.   
Do you think we can find any higher ed lessons from the Fire Phone fiasco?


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