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Focus on smaller defects

November 15, 2011

With Kindle Fire starts shipping one day early before its official launch date, Amazon got a very good reason to gloat, in particular the company’s CEO Jeff Bezos. They are right on schedule, and they are on the right track to open the gate to their huge cloud-based services with the Kindle Fire, the ‘media service’ tablet as they prefer to call it.

The Kindle Fire has attracted many eyes and hearts not just because of many Amazon’s services it offer, but also because of the amazingly low price tag at $200. In an interview with Steven Levy (Wired), the Amazon CEO revealed the secret:

Bezos: We were determined to build the best services but to price them at a level that customers couldn’t match, even if they were willing to use inferior products. Tech companies always have high margins, except for Amazon. We’re the only tech company with low margins.

Levy: How did you do it?

Bezos: We really obsess over small defects. That’s what drives up costs. Because the most expensive thing you can do is make a mistake. We can afford to focus on smaller and smaller defects and eliminate them at their root. That reduces cost, because things just work.

Funny how what he said, the word “obsess” and the last sentence there, remind me of Steve Jobs. Although Amazon is the very opposite of Apple when it comes to company’s profits, like Jeff emphasized in the start of the interview: “We’re a company very accustomed to operating at low margins. We grew up that way.” Thumbs up.

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