Working backwards

“We wanted the student in a dorm room to have access to the same world-class computing infrastructure as any Amazon engineer.”

^{Colin Bryar, Shadow to Jeff Bezos}

Loosely affiliated

“How about now?” Jeff Bezos asked Colin Bryar, then head of Amazon Affiliates. Bezos hoped to talk about web services at the promising book-delivery startup. It was 2001, and Affiliates had begun opening up its XML product data for use by its more technically savvy customers. As chronicled in Bryar’s book, “Working Backwards,” Bezos and the early AWS team had begun to see the promise of a web-based data infrastructure platform for a new breed of customer: the software developer.

Critically though, the organization had recently adopted new methods of product development and team design for serving that new market. They embraced the concept of working backwards from customer needs, writing a one-page press release and an FAQ document of no more than five pages to clarify the customer benefits and challenges of any new initiative. This process, requiring detailed narrative writing and technical analysis, forced engineers to step outside their traditional roles, enhancing the development process. The company famously prohibits use of power-point in favor of this “PR/FAQ” framework. It also underscored a few of Amazon’s newly formed leadership principles, such as "Bias for Action” and “Invent and Simplify.”

Re-Engineering Teams

The team first formed under Bryar with borrowed resources. One group under Rob Frederick had recently finished an XML-based project called Amazon Anywhere which enabled e-commerce on mobile devices. They moved over along with toys retail product manager Sarah Spillman and self-described “tech dude” Al Vermeulen who both helped build the first API. These changes also coincided with Amazon’s own infrastructure migration from Sun Microsystems servers to Linux, reducing server costs by 80%, thereby enhancing storage capacity and efficiency.

From then on, Bryar, Bezos and the early AWS team painstakingly worked on the PR/FAQ process. They held small developer conferences, performed A/B tests and pricing analysis to validate assumptions about customer needs. One engineer said, “We’re software engineers, not pricing specialists with MBAs.” Despite their qualms, the engineers knew that this process would ultimately save them time. After all, it’s a lot cheaper to make changes to a written document rather than on shipped code.

The team also had to get out of its own way. Amazon’s early “New Proposed Initiative” process, created bureaucratic hurdles and stifled creativity. In response, Amazon shifted to smaller, more autonomous "two pizza teams" capable of operating independently without extensive cross-team collaboration. By 2003, Andy Jassy, who would later succeed Bezos as Amazon’s CEO, took the helm at AWS. Bryar moved on to become Bezos’s “shadow” or technical advisor.

Jassy however recognized that size does not guarantee success—a team must have autonomy over its area of focus. Thus two pizza teams transformed into "single-threaded leadership," wherein team leaders had full ownership and minimal dependencies, fostering a strong sense of autonomy and agility. Recognizing Conway’s law, they understood that dependencies on other teams would create complexity and slow down the business.

A new era

This organizational restructuring and focus on autonomy paid off. Once AWS launched its foundational products, S3 and EC2, the company exploded. It achieved $1 billion in revenue faster than Amazon’s retail operations. Since then it has achieved over $100 billion in revenue run rate. The journey of AWS from a bare-bones affiliate tool to a major market player in cloud computing illustrates how single-threaded teams can effectively work backwards from customer needs to usher in a new era of cloud computing. Without the PR/FAQ process and autonomous team design, AWS may have remained just another small feature for its retail partners.

Today, market shifts have led to changes at AWS. Post-pandemic revenue declines have forced AWS to lay off nearly 20% of its workforce in 2023. Microsoft’s competitor to AWS, Azure has grown market share by nearly 25%, buoyed by the Office giant’s partnership with OpenAI. In light of these events, the CEO of AWS recently stepped down. Adam Selipsky, formerly of Tableau (which we wrote about in another issue of this newsletter), has groomed the more “wartime” executive and longtime Amazon product leader Matt Garman. The company appears positioned to take advantage of the generative AI boom following an investment in the OpenAI compeitor Anthropic.

More than 20 years ago, AWS proved how autonomous teams obsessively documenting and writing about customer needs could revolutionize data infrastructure. Today they are undoubtedly asking, “how about now?”