On June 18, 2014 Jeff Bezos stood on stage in Seattle and announced the launch of Amazon’s brand new Fire Phone. Four years in the making, this was Amazon’s initial big push into consumer electronics and was hotly awaited. The Fire Phone was going up against Apple’s iPhone with the goal of not only competing with it but ultimately standing on equal aspirational brand footing with our favorite fruit-named company.
The Fire Phone failed to sell. Worse than that, it became a laughing stock almost immediately for it’s “3D” features that were neither 3 nor D. Within weeks Bezos decided to kill the project and reassign the nearly 1000 employees assigned to the project. When the tech press went digging for the story behind the failure of the Fire Phone a consistent refrain surfaced over and over. When asked why certain design choices were made or why the phone worked in a particular way, the answer was always the same:
“We poured surreal amounts of money into it, yet we all thought it had no value for the customer, which was the biggest irony. Whenever anyone asked why we were doing this, the answer was, ‘Because Jeff wants it.’ No one thought the feature justified the cost to the project. No one. Absolutely no one.” (source)
Past success is not an indication of future success
You could hardly blame the team at the time for following Bezos’ direction. While they may not have agreed with his decisions or design choices all they had to do was look around. Bezos had built the largest ecommerce company in the world. He had reinvented warehouse logistics and reset consumer expectations of what shopping, delivery and customer service meant. Kindle, Prime, AWS and many other products were already proving to be successful services. Why would the Fire Phone be any different?
As one top product engineer put it, “Yes, there was heated debate about whether it was heading in the right direction. But at a certain point, you just think, Well, this guy has been right so many times before.” (source)
Given such a successful track record it was no wonder the teams continued to work on a product they didn’t particularly believe in nor think would live up to Bezos’ expectations to reposition the Amazon brand away from a “utility” to a desired product brand like Apple.
Amazon took a $170MM write down for the unsold inventory of the Fire Phone. The team was quickly redeployed to other efforts. In 2016, Bezos was asked what happened on this project. Without addressing the command and control issues cited by most of the people who worked on the product he painted the Fire Phone as a failed experiment. At the size of Amazon, Bezos said, they had to fail big in order to progress in a big way. This was just one of those failures.
The Highest Paid Person’s Opinion is a hypothesis
In every product meeting there is someone in the room whose job title and related salary put them in a position of influence. Their opinions are known as HIPPOs — the highest paid person’s opinion — and are often the deciding factor in what decisions and next steps a team takes. Many people in the position to give out HIPPOs got there by being right, a lot. They developed and delivered successful products and services and helped grow the business to where it is today.
None of that matters when it comes to a new initiative.
The highest paid person’s opinion and, in fact, anyone else’s opinion on how a product should be designed and developed is just that — their opinion. It’s a hypothesis. It’s their best guess about how to solve a current customer problem with a future product or service. Now, it can be a really good guess. It can be an educated guess backed up with data and insight but it’s still just a guess. It’s the team’s job to test and prove that this hypothesis is more valid than the others it’s considering.
Taming the HIPPO
It can be tough to push back on an executive or stakeholder when they’re sharing their HIPPO with the team. They’re in a position of power and expect a level of respect for their ideas. If you find yourself in that position try asking the following questions:
“What do we think our customers will be doing differently if we implement your idea successfully?”
“How will we know this idea is working at a scale worth deploying to our entire customer base?”
Push for specific metrics here. You want to hear the executive ultimately come back with a number that would dictate success (an outcome). For example they may say, “We’ll see a 15% increase in average order value per customer.” Now you have a success metric for the HIPPO hypothesis. As you begin to implement (assuming you didn’t have a choice) you can point to that metric as a barometer for whether or not this is an idea worth continued pursuit or whether a pivot is necessary.
One other way to deal with the HIPPO is to offer to test it. “Before we deploy 100% of our budget and time against this idea, we’d like to take 10% of the budget and build a few tests to make sure this is the best path forward. If it is, we’re already 10% on the way. If it’s not, we have 90% of the budget left to deploy in a different direction and some market-based feedback to help us determine what that direction should be.”
None of these approaches are foolproof. Pointing out risks, adding success criteria and building a regimen of experimentation and iteration is how modern products are built. You’ll inevitably meet executives who want their vision implemented without question. If all else fails, ask them to show you their Fire Phone.
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