165: The Operational Excellence Strategy for Expanding Amazon Prime Video with Tim Leslie

Transcript

Are you familiar with the Aesop fable the Hare and the Tortoise? If not, then allow me to share. A hare was making fun of the tortoise one day for being so slow. Do you ever get anywhere?He asked with a mocking laugh. Yes, replied the tortoise, and I get there sooner than you think. I’ll run you a race and prove it.

The hare was much amused at the idea of running a race with the tortoise, but for the fun of the thing he agreed. So the fox, who had consented to act as judge, was marked the distance and started the runners off.

The hare was soon far out of sight and to make the tortoise feel very deeply how ridiculous it was for him to try a race with the hare, he lay down beside the course to take a nap until the tortoise should catch up. The tortoise, meanwhile, kept going slowly but steadily, and after a Time passed the place where the hare was sleeping.

But the hare slept on very peacefully, and when at last he did wake up, the tortoise was near the goal. The hare now ran his swiftest, but he could not overtake the tortoise in Time.

Hi, I’m Alicia Butler. Pierre Sustainable scale doesn’t happen overnight. You’re about to find out why it pays to think and act for the long term in business. Operating fast and impulsively might yield short term gains, but slow and steady wins the race.

This is season 13 episode 165 let’s Start the show welcome to Business Infrastructure, the podcast about curing back office blues of fast growing businesses. If you’re a business owner or operator looking for practical tips and solutions to scaling your business in a sustainable manner, you’re in the right place.

Now, here’s your hostess, Alicia Butler Pierre, have you ever wished you had a mentor that could provide advice on how to improve your customer experience and scale your business?  Well, HubSpot’s got you covered. Its new podcast, the Shakeup, is a show about business builders who dare to be different. Alexis Gay and Brianne Kimmel dive into the stories behind the most disruptive companies in business, examining the decisions and investments made by leaders who are building for the future by challenging the status quo.

What I love about this show is that they don’t just talk the talk, but they walk the walk too. Not only do Alexis and Brianne interview successful founders and innovators, but they have firsthand experience through their own backgrounds as business leaders and investors. Sprinkled with a little comedy to really keep things interesting, listen, learn and grow with the HubSpot podcast [email protected] podcast network having a tough Time trying to explain ideas over a video conference?

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We’re well into season 13 where the focus is on operational excellence. Joining me today, truly out of the goodness and kindness of his heart in beautiful but scorching Bellevue, Washington, is Tim Leslie. He’s currently the co founder of Loving Root, as well as a board advisor to companies ranging from startups to Fortune 100. He’s also a former 20 year Amazon executive.

In fact, Tim’s going to share with us how he built and managed Amazon’s international legal team and how he led the launch and expansion of Amazon prime video in over 200 countries. Tim, first of all, thank you so much for being here because I know the Northwest in the United States is currently experiencing a record heat wave.

I know you don’t have air, I think no central air and air conditioning, right. So you’re dealing with a window unit right now. So I really do appreciate you taking Time to speak with me today.

Oh, it’s my pleasure, Alicia. And yes, thank you for having me. It’s really good to be here and to talk to you about what I might be able to share with you and your listeners about what I learned at Amazon and how it changed the way I see the world.

Wow. I can’t wait. I really can’t. So aside from being hot, how are you today?

I’m good. I did not get a great night’s sleep in the 110 degree heat. Seattle’s broken two records two days in a row. So if we don’t think the planet is changing, we only have to look at the thermometer to see it is. And that’s actually part of what I’m passionately working on and why I doing what I’m doing.

And we can talk about a bit later how people can affect the world through their small medium sized businesses and help the community and the people in it. But no, it’s really good to be here. The air conditioner is off, but a little sauna as we do this never hurt anyone.

Release those toxins. That’s a good way of looking at it.

Exactly.

Okay. You know, and before we get into discussing your very impressive tenure at Amazon, I was wondering if we could first talk about what actually led you there. You know, you are an attorney. I noticed you got your JD from Yale. Yale University. Wow. Did you work at a law firm, Tim, before you became an associate general counsel at Amazon in 2009?

I did. And I don’t talk about having been a lawyer much. I feel as though I obviously chose to be a lawyer and had a very nice career doing that. I decided to go to Yale Law School though, because I didn’t know what else to do with my life. I was an econ undergrad at a small liberal arts college.

That was probably the luckiest decision I ever made to go to Beloit College where I went to play Division 3 basketball. Had no idea what a small liberal arts college learning environment would be like. And it taught me how to think, how to communicate. And I thought, okay, I can get a PhD in economics, I can go to business school. I matriculated at University of Chicago Business School for a summer.

I thought it was not super interesting at the Time. And I had taken a class in undergrad on sociology and the law. And it was an amazing teacher who made me think about law’s pervasiveness and our how we run society and how we think of morality. And I thought, I can go to law school and I can do anything.

Well, as it turns out, I would not go to law school in hindsight. And it all turned out fine if you don’t know what else to do if you go to law school. Even though I had the good fortune to go to Yale, which really teaches you what the law should be now what the law is, I would think about maybe getting out and working for a bit and then going deciding what you’re going to do for grad school. But I went to Yale and as it turns out, when you go to law school, you’re trained to be a lawyer. So yes, I went on to be a corporate lawyer.

I did all kinds of corporate legal work, M and a corporate finance, real estate development, and then went in house. And Amazon was my second in house job and I joined in 1999 as the fifth in house lawyer to really do everything but kind of the front end technology support.

So I joined before Jeff Wilkie, who is a renowned executive at Amazon, who really built the Amazon logistics network when his predecessor Jimmy Wright, who came from Walmart was there. And my job was provide all the legal support to build out Amazon’s fulfillment network and the launch of every international website.

So I got to provide initially by myself and eventually building a team of 200 people to support globally the launch and operation of nearly every international website. And got to sit on Jeff Wilkie’s retail and operations leadership team, along with Diego Piacentini, who ran International and all. That said, I now view myself as a recovered lawyer.

I’ve been through the 12 step program and I’m now in the 12 step, giving back to the legal community and helping people who, you know, can become disillusioned with being a lawyer. It’s a tough profession. It’s tough to find your way. But I did find my way and I’m happy to talk more about that. And you can always find me on LinkedIn if you’re a struggling lawyer trying to figure out what to do next.

So that’s the legal story that brought me to eventually. The good fortune at Amazon is they view people who show they express Amazon’s values and can think like an Amazonian as capable of doing anything. So Amazon really leans into potential, especially in early days. So I was given the opportunity to switch from being a lawyer at Amazon to being a business person and running operations.

Okay, I was wondering how that happened, but really quickly, how many employees did Amazon have when you first started? Do you remember?

It was under a thousand in 1999. So, yeah, there was a really. Just prior to my leaving, I presented on prime video at the All Hands and they did this menage of all the pictures of the people who had been at Amazon for 20 years and were still there. And it’s super powerful to be at a company from early days like that to when I joined Amazon, it was, let me see, about 600 million in revenue and it had a net loss of just under 100 million. And when I left, that was in 1999.

When I left in 2019, it was nearly 300 billion in revenue, 500x what it was when I joined, and a profit of about 11.5 billion. So a lot changed in my Time at Amazon. And I think what made it so powerful and meaningful to be there and look back on those 20 years is the fundamental principles on which Amazon was built, which as I’ve stepped away from it for a couple years now, I do think operational excellence, which I know you spend a lot of Time on, Alicia, is actually kind of the backbone of that.

It’s not really talked about, but the principles of Amazon are lasting and enduring. And I think that’s what really makes a great visionary company and probably a great Visionary, anything, person, even. They have lasting vision, mission, principles, values that endure over Time, even as circumstances change. And that’s definitely true with what Jeff and Amazon have built.

But your first job at Amazon, you were working as an attorney, right? And then then eventually you moved or transitioned to the business side of things. Is how did that happen?

eah, so that’s. I spent my first 13 years at Amazon building the international legal team. So I worked internationally from the get go, again working on the launch of every international website and every product and service launch globally. Most of that was organic growth, but we did acquire companies in the UK, Germany and China to get started. And then in 2013, I was working in Luxembourg, had moved there to run international.

That’s Amazon’s European headquarters. And Amazon was looking for somebody to become the managing director of a company they had just acquired called Love Film. Love Thumb was a UK company that was the Netflix of the uk. A DVD by mail. If people can even remember those days that Netflix started a DVD by mail company. And actually a great DVD by mail company already clearly becoming a threat to Blockbuster, that you could order three DVDs or delivered right to your door, you stick them back in the mailbox.

Love Film was the same sort of company in the UK and had over a million customers. And Amazon also was in that DVD by mail, putting its toe in that space. And then we owned 20% of love film and then bought the whole thing. And as Amazon often does with acquisitions, it did this with Zappos and Whole Foods and others. It often brings in an existing Amazonian who, such as myself, who then goes and runs the company and integrates the company into Amazon and teaches it its principles, et cetera.

So I had that opportunity at Love film and it was great. It was a great team. I worked with original Love Film people who really knew the entertainment space, and my job was to help it in its transition from physical to digital. Netflix had just launched its digital offering then in the UK that year and rebrand Love Film, Prime Video, merge it into Amazon and launch it across Europe.

It was actually a perfect job for a former lawyer in that I knew everything about Amazon’s values and culture and had the opportunity because I do have a passion for learning. I had the opportunity to dive into the trenches with the Love Film team and learn everything there was to learn about entertainment and marketing of content. So it was a good marriage. And we then rebranded Love Film and launched Prime Video in the UK, Germany and Austria.

I then went back to Seattle and we launched Prime Video in Japan. Ahead of Netflix. And then we built the plan. Jeff said, I want to launch Prime Video globally. And I then led responsibility for that. But I will say the transition from lawyer to business person, making that decision was probably the hardest decision of my life and also the best decision of my life, especially from a career standpoint.

Hardest decision because even though I’d always promised myself, I was always a reluctant lawyer. I think that’s why I was a good Amazon lawyer. I love risk. It’s the job of lawyers to mitigate risk, not to want to take risk on. I love risk. Many lawyers tell you yes. I’m not the person who says no in the room. I’m the person who points out the risk. My view of lawyering is lawyers don’t point out risk.

Lawyers make risk go away. And obviously in ethical legal ways, but not to use another scary metaphor, but my model of being a lawyer was the Robert Duvall to the Godfather. When the Godfather had a problem, and not just because Diego Pichettini is Italian. When the Godfather had a problem, I said, don’t worry about it, Godfather.

‘ll take care of it. And so lawyers should figure out how to do things so they mitigate risks. And they do not even have to raise the risk with the business people. Things are not business decisions or legal decisions. They’re just decisions. And so it’s really a matter of balancing risk and making a decision. And so I always wanted to take on more risk. And if you are going to be a company that is at the forefront, innovating, continuously innovating, as Amazon did, you’re going to have to push. And even the Internet in new spaces, digital this or digital that. And cloud computing.

The laws, as we know, are often not well formed. So you have to, to some extent, help make the laws by doing things within existing frameworks, but really pushing the bounds. So that’s what I did as a lawyer, and I think people always saw that.

So when I was offered the role of Love Film, it was the third business role I had actually been offered. And I’d said no to the first two. And I sat and looked at myself in the. In the mirror and said, okay, you always promised yourself you would not always be a lawyer. There are many aspects of being a lawyer that you love. You love being a counselor, a consigliere, like Robert Duvall to the Godfather. And there are aspects you hate about being a lawyer. I hate compliance work.

I hate telling a person no. And a lawyer does have to tell a person no. That’s part of their Job I help hate telling my kids no, it’s not one of my strengths. So I want to take on the risk. I always wanted to make the business decisions. And so this job was also in a space I love. I love entertainment as an art form. I love writing, directing, acting. And so I thought, the gods are being kind to you.

They’re coming to you a third Time in a space that you love in this role that seems perfect, where there’s a business team that knows how to do this stuff, to teach you in Amazon how to do this stuff. And you can teach them Amazon. If you pass this up, kid, it’s probably the last chance you’re going to get. And I made the decision. And the thing that’s hard about it is even if you’re not crazy about what you do, once you’ve done it, as I had at that point for over 20 years, you know how to do it well. And I say that in those 20 years, I probably had about 40 years of legal experience because of how hard you have to work at Amazon, at least in those days. And so it’s hard to let go of the expertise you have.

It’s hard to dive into. No, I’m not going to be expert. Not only not going to be expert, I’m going to rely on lots of others to learn how to do what I need to do. And it’s scary. And so I made the scary decision and said, I’m going to do this. And I remember a confidant of mine said at the Time when I was saying to him, you know, there are days when I just feel so lost.

I feel as though I can’t provide the direction I want to provide. I’m spinning. And he said, those are the days that you’re learning most, Tim, you know, just keep going. And so that’s what I did. I there’s a great one of the co founders of Love, one of the leaders, Simon Morris, a very close friend of mine, he does all the TV advertising now for Amazon.

He always was cheering me on. And what he liked about the way I led is I do think great leaders lead from behind. They let others do the work. But at that Time, I really needed to lead from the front. I dove into the trenches with the team, I picked up a shovel, I dug, I did what needed to be done, I taught them what I could teach them and learned what I needed to learn. And I think the principle that I demonstrated the most, it’s not a leadership principle per se at Amazon, but a life principle for Me, and that’s humility.

You need to be a humble leader. The best leaders are humble about what they do know and don’t know. They’re vulnerable. Brene Brown is somebody who I really love reading her stuff and I think heart centered leadership, true vulnerability.

Here’s what I know, here’s what I can teach you, here’s what I don’t know, here’s the mistakes I made, here’s how we can correct those mistakes. I think those are the principles that helped me in the transition from lawyer to business person. And again, luckiest decision I ever made because it’s opened up so many doors and I’m incredibly grateful to Amazon and the people who surrounded me at that Time and helped me with that transition.

That is amazing. And I’m so glad that you spoke about those moments of despair where you start to second guess yourself and really question your decision. 

Like, oh my God, I knew I should have just stayed being an attorney. That was safe. That was the safe thing to do. 

What are you doing, Tim? You know, told you, you know, remember, I don’t know if you remember these Back the Looney Tune cartoons, but there were certain characters where they’d have like the angel on one shoulder and the devil on the other shoulder. And so it’s like this tug of war that’s going inside of your head mentally and you start to doubt yourself.

So I’m so glad you mentioned that because for those who are listening, that is a true hallmark of leadership. And the fact that you were told it’s in those moments where you are learning and that’s we have to just stick to the plan and trust that we have in fact made the right decision. And there’s so much to talk about when it comes to Amazon.

They’re always in the news. But you know, we’re trying to keep this focused on operational excellence. And I remember, Tim, when you and I first spoke, you dropped so much knowledge and wisdom during that conversation and I took really detailed notes. So I’m going to read from those notes because one of the things, one of the things that you, I was paying very careful attention to everything you were saying.

One of the things that you mentioned about Amazon was their four core values. Customer obsession, continuous innovation, long term thinking, and operational excellence. But I also thought it was interesting that you told me that at Amazon they don’t really talk about operational excellence except for aws, Amazon Web Services. Why is that? Is it just because operational excellence just, it’s who Amazon is. So there’s no need to talk about it overtly. It just is.

Yeah, I think that is it. And so, yeah, other than pockets AWS, it’s important. Part of their B2B business technical architecture discussions. And then operational excellence.

If you would have asked me before what I thought of operational excellence, I would have said Six Sigma and Kaizen, and those are methods of achieving operational excellence. But those were the only contexts in which I thought of operational excellence. But if we think of, at a high level, the most basic definition of operational excellence, which is in my mind, performing everything you do at the highest standard of excellence. That is what Amazon is built to do. And a lot of companies aim to do that.

But Amazon actually seeks perfection over Time through continuous improvement in everything. Which is why I think eventually getting to talk about something like prime or Amazon Marketplace, two of the greatest inventions of Amazon, AWS being the third, is so important. Because what Amazon does, is it to your point, is it has built that operational excellence into the very fabric of how it works. So as we know, I’m sure your listeners know if they’re listening to your podcast about operational excellence.

It’s achieved when every member of an organization and every process and mechanism in that organization is part of the flow of value creation to the customer. That’s the purpose of the company, to create value for your customer, whoever that is. And Amazon was built to excel at seeking perfection by making sure every member of the organization, every process and mechanism is directed to that flow, to delivering value to the customers.

So I actually, in stepping away from Amazon, I view Amazon, this is probably in your notes too, as both having the potential to, and I’m not exaggerating when I say this, to be one of the companies that can save this planet as well. On the other hand, and there’s always a tension in everything, there’s always a dialectic, on the other hand, an existential threat to society as we know it. And the reason is, is that Amazon, because of operational excellence, has actually built an operational excellence machine.

I would think of it as an innovation machine, a scale machine. But operational excellence is the thing that is, again, kind of that holds it all together, starts with the vision and mission all the way down through delivering that value to customers. And in the middle of that, the cogs, the gears, are those processes and mechanisms that make that machine run.
That is such a great segue into. Because I. That’s. You’re right. I did have that captured in my notes from our first conversation. And that is something that I also wanted to ask you about. This, this idea of Amazon being A machine. You know, I was looking up the latest figures and what I noticed online, Amazon’s net worth as of March 2021 is a trillion dollars. And you know, when you hear a number like that, it’s, it’s so large that you just try to fat.

It is unfathomable, honestly. You know, I was like, okay, so you know, we always hear about like seven and eight figure businesses, but that’s like a, that’s a nine figure business. That’s 12 zeros. Oh my gosh.

Yeah. Amazing.

Yeah, yeah. So, you know, being that you were there for 20 years, obviously you saw a lot. And so when it comes to this machine, it’s interesting because in some of the previous conversations or interviews in this particular season, quite a few people have said, you know, we have to get away from comparing human beings to machines or using machinery type language when we talk about what operations is and what it means to be operationally excellent. But obviously you’re describing Amazon as a machine for a reason. And what is that reason, Tim?

Yeah, well, I think, I don’t know if Jeff. Because Amazon is much bigger than Jeff and I think Jeff Bezos has. When you create something that’s bigger and greater than yourself and obviously the trillion dollar worth of Amazon and all it does. And now Jeff is going to step away from Amazon and Andy Jassy will be the new CEO soon. It will live on beyond him. But in part that is because he has created a machine. And whether it was overt or a byproduct of how he thinks about building and innovation, when you build software, you know, you’re building something that’s programmatic, that’s automated, that you continue to make better and better.

So for example, even at the core, people can, and I think it is a downside of Amazon that you are effectively working in a machine, because if a company is, if you’re going to have pure operational excellence, you want to have absolute efficiency, which means again, everything is flowing in the same direction. Which although Amazon has a leadership principle of disagree and commit, that’s just to create the tension. On the other side of that leadership principle, it’s disagree and then commit.

Once the disagreement’s had and you reach the solution, everybody commits to it. There’s no cya, there’s no second guessing, you’re plowing forward and everything is done with the same process, the same thinking, the same mechanisms, the same values. So to make something highly efficient, it is a machine.

It’s not the people in and of themselves who are machines. I will Say, though, when you’re in Amazon, it is very hard to see outside of those principles, those values and what you’re creating. And it becomes the way you think about everything. And it’s so effective, it’s working so well, that it’s hard to argue that it’s the wrong way to create a company in which you want massive scale.

They are the Silicon Valley poster child for scale and they will continue to scale. Because it’s my belief that Jeff would say stasis as soon as you stop growing, as soon as you stop continuously improving. Is death the way he would say it is when it’s no longer day one. So the biggest principle overarching, the kind of continuous innovation principle is it’s still day one. It will always be day one. That’s what everybody says when they leave. And you believe it.

It still gives me the chills when I say it that as much as Amazon’s done within that organization, within the entity, within the machine, it is operating as if it has a ruthless competitor right at its heels. And it must continuously innovate for its customers or it will die. So it’s always going to be taking ground, it’s always getting bigger, stronger. It’s a juggernaut.

It’s not that it’s impossible for it to fail, but it’s getting pretty close because of the operational excellence, because of the continuous ceaseless drive to innovate. As close to unstoppable as any company in the world. You can use whatever metaphor you want, it’s the Roman Empire with a better army, better weaponry. It’s a juggernaut on the top of the mountain ready to roll downhill.

But what people need to understand is it is a highly tuned, operationally excellent company. And then the question for you as a small or medium sized business is you have to be true to yourself and do what’s right for you. But the principles of operational excellence that Amazon has, those are worth looking at and adopting because that is what I believe makes it so effective.

Well said. Wow. Juggernaut. Roman army. I love those analogies. Let’s go ahead and take a quick break, Tim, and when we come back, I want to hear all about the launch of Amazon prime video. I’m hoping you can kind of give us a behind the scenes without divulging any proprietary information, of course. But I just, you know, I’m just so fascinated by this because it’s something that I think, I’m sure every listener right now has had some exposure, if they’re not already members of Prime. So Prime Video to be exact.

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Learn more about how you can scale your company without scaling [email protected] you know Tim, when I hear Amazon Prime Video, I instantly think of Amazon Prime Day. And I know they’re not the same thing, but I just hear prime and I instantly go to, you know, these, these online shopping deals. But can you, for those who might be listening, who aren’t familiar with Amazon Prime Video, can you first explain what it is?

Sure. So, and you, you holding those two things, you know, conflating prime and Prime Video. That is both power of prime and Prime Video and in initial days, a headwind to its success because of prime, at least in the US being associated with shipping and Prime Video being about viewing. But Prime Video on the one hand is the same as a Netflix or a Hulu in that it has its subscription video on demand service the same as Netflix. So Netflix is a pure play. I want to watch whatever I want to watch whenever I want to watch it, making tons of original content.

 

I can subscribe. It’s all I can eat. Prime Video is that you get that with your prime subscription. They have original content and shows. They’re continuing to make more of that. They’ve built their own studio in la. They’ve now bought mgm. They also license a bunch of content from other studios and networks that you can watch on Prime Video. In addition, in the Prime Video app again, because Amazon, if you look at its vision again, one thing that makes Amazon great is it has lived its vision, which is to be the world’s most customer centric company and a place you can find and buy anything.

So if you apply that find and buy anything to Prime Video, Prime Video, not only within the app, has the subscription video on demand service, but you can buy videos that are in the theater today. So it’s called pvod or premium Video on Demand. So Wrath of Man, for example, in theaters now you can buy that for $20 on Amazon or any other show that Amazon doesn’t have in its subscription service you can buy, it’s called TVOD or PVOD. It also has, you can subscribe to HBO or ShowTime.

Yes, hundreds of what they call channels. And it has now launched through IMDb TV, an AVOD service, an ad supported service. So IMDb TV, kind of a sister to Prime Video, you get all of this ad supported with commercials video. So what Prime Video and Amazon have done in their video service that’s different than Netflix is make every type of content available. And again, this can be confusing to customers because it’s got so much and they try to do it through the user interface to show you what’s what.

But that’s Prime Video. It’s basically Netflix plus Hulu. It has the opportunity. What you can envision Prime Video being is the virtual cable provider, the same as Comcast. But everywhere in the world Amazon provides anything you want to watch, anywhere you want to watch. It also by the way, has a self publishing platform.

So if you’re a content creator, you can publish your content directly onto Prime Video. So Amazon always has all these means to encircle not only the customer, but create a huge moat for competitors that they have so many tentacles reaching out to give the customer unlimited options to consume. So it’s not clear if you subscribe to prime, you get that subscription on demand and then you also will see you have access to all this other content.

I had no idea about the self publishing feature. So I, we, my husband and I, we have a fire stick. So that’s why I’m familiar with being able to get HBO and some of these other channels. It’s like why, why pay for cable when you can just have your fire stick?

I mean that’s our philosophy. We haven’t paid for cable in years. But this, I’m curious just really quickly, I know this is a little kind of, you know, a tangent from our conversation, but the self publishing feature. So is that, does that make them almost like a competitor to YouTube?

Yes, it’s intentionally not what’s known as user generated content, the lower form of content. So it is the same as higher end YouTube content.

Okay

Also now as you well know, YouTube is actually a lot of people think about Netflix as the most streamed. The most streamed service in the world is YouTube. It’s a treasure trove of content. And all, I’m sure all Your users use YouTube and if they don’t they should I do.

I’m a junkie. I. I’m hooked. It’s terrible.

But it is actually people who I want to make a low budget film or a low budget documentary. It’s an analog to in Kindle. There’s Kindle Direct Publishing. So people.

I’ve done that too.

Yeah. And occasionally there’s a breakout on the self publishing platform that is made a hit or gets a lot of views and then it’s up to the content creator. Do I want to be part of the ad supported service? Do I want to be part of the subscription service? Do I want to be. You have to buy it a la carte. So the content creator can choose then how to monetize his or their content on the service.

Yeah. And the beauty of that, that platform that you’ve just described is that it gives people who otherwise would never have a shot. It gives you the opportunity to get your work out there.

Exactly.

Yeah.

It’s one of the positives way Amazon has changed the world for the better. On Marketplace, females, minorities who never had the opportunity to have their own businesses out of their home and have a platform and reach, all of these customers have a means to do that.

So Amazon does on the one hand raise all boats. On the other hand do remember that Amazon executives such as myself and the Jeff Bezos extracted a lot of money income from raising those boats. So Amazon has made a lot of thousands of people extraordinarily wealthy.

So there is a. And cause a lot of harm to Main street the same as Walmart does. So there is a huge benefit democratization as you mentioned and we all, we can’t be blind to again that existential threat that large tech companies do provide do do cause small to medium sized businesses.

So when Prime Video, when did it launch? Did it launch in the US first?

okay, yeah so it originally. So the way to tell the Prime Video story and I’ll try to do it quickly. I know we don’t have a lot of Time and I don’t want to bore our listeners but no, it’s not boring at all.

This is fascinating.

Yeah. So prime in my view is unequivocally one of the three most important inventions of Amazon. AWS is extraordinarily important and it’s kind of this separate thing that’s interesting and we could do a whole separate podcast on aws. But Prime Marketplace, which Amazon really, really reinvented the existing marketplace at two sided marketplaces just become commonplace in aws.

Those are the three greatest inventions. And prime does demonstrate the greatest aspects of Amazon. And it’s such an interesting story because at the inception of prime, prime was just shipping, but the same way Amazon was just an online book company when it started. Anybody who viewed boy, I wonder if this online bookseller is going to be big or not. And didn’t realize and read the vision to be the world’s most customer centric company, a place you can find it by anything.

We kind of take that for granted. But for about the first 10 years of Amazon, it was really hard to break through the brand image of it’s an online media company, it sells books, DVDs, CDs, remember those days? DVDs, CDs. So long gone. But it was never about that.

It was always about being a platform to deliver anything customers want. It says in the vision online, you should probably cross that off because it’s online and offline now the same way prime was never about shipping. But at the inception of prime, the fundamental issue that online companies faced, and people don’t even think about this really that much anymore because Amazon has reinvented the space, is that you said, well, do I want to pay shipping costs or not?

And at the Time, the model was you hit a certain threshold, $25, $20, and you get free shipping. But it took a couple days. And then Jeff said, we need to take, we’re ever going to grow the way we need to grow, we need to take shipping out of the equation. And so let’s create a program.

And in many respects it’s modeled after the Costco program. People kind of forget that they’ve paid a membership fee to Costco. It’s a great model. I pay this membership fee, I walk into a warehouse and I get the best deals in physical retail on the planet. And then at the end of the year it just renews. And I don’t think so. Let’s have. And what that does that membership free to raise the cost of other things.

In the case of Amazon shipping, so we’ll charge a membership fee. It’s an annual program. They pay one Time, they’ve thought about it once, that’s it. We’ll sell it in the order pipeline. Right when somebody’s about to buy something, we say, hey, sign up for a free trial to the shipping program and you get this ship for free instead of whatever it would be, $5, $7 at the Time. And the interesting aspect is it didn’t pencil out.

You know, when people looked at it, they’re like this isn’t going to work. People are going to order their toothpaste and we’re going to put toothpaste in a box, and then the next day they’re going to order their toilet paper, and then the next day they’re going to order a book and we’re going to be paying all these shipping costs. But that’s where somebody like Jeff, who sees the black swans, who sees where the world’s going, it’s what makes them genius. It’s what makes the Steve Jobs, the Bill Gates, the Jeff Bezos so powerful is they, they don’t see where things are, as Wayne Gretzky would put it, also a genius in his own right. I don’t play where the puck is. I play where the puck’s going.

Jeff Bezos plays where the puck’s going. Where the puck’s going is seeing a world in which everybody would be a Prime member. So it’s not really a stated vision, but if I were to say it, Jeff saw a world in which everyone in the on the planet would be a Prime member.

And we’ll start with shipping, but we’re going to make prime so valuable that it would be silly not to be a Prime member. So we start with prime. And it takes, I don’t know. We launched in 2005, 2006. It took 5, 6 years for prime to hit breakeven profitability. And in typical Amazon fashion, operating at super low margins, always investing again. Core principles, investing for the long term. No company thinks more long term than Amazon and is willing to invest for at least 3, usually 5, 7, even 10, 12 years to reach profitability.

But they’ll invest when they know that they get scale. And then they kick off a lot of free cash flow. So they’re investing. It takes five, six years to profitability. Typical Amazon fashion. Jeff says, okay, where are we going to put that money? We got to make prime better. We’re going to give it back to the customer.

Hey, people watch about four hours of movies and TV shows every day in America, Canada, and actually around the world. Let’s buy some movies and TV shows and make them part of prime again. People thought, prime, this isn’t going to work. Now they’re thinking you may add videos to a shipping program. That’s definitely not going to work. We bought some crappy content. The Gilligan’s Island, I Dream of Jeannie.

Hey, I like those shows.

Content of that ilk. And guess what? People watched it and nobody would have thought this. The people who watched it were better. Prime members they, Jeff said in interviews publicly they bought more socks or shoes, something like that. Indirectly they did. But what they really did is they have another benefit. They renew at a higher rate.

They renew their prime membership at a higher rate. So it was working. So then we hired some real content people. Amazon also does that. It does value potential. But we went off and hired some, you know, people from Netflix and DirecTV and we started buying some real content deals. And that was 2011.

They renew their prime membership at a higher rate. So it was working. So then we hired some real content people. Amazon also does that. It does value potential. But we went off and hired some, you know, people from Netflix and DirecTV and we started buying some real content deals. And that was 2011.

And so it really was, how can we add more value, more benefit to prime and make it a hugely successful program?

But again, to your original point, it’s two separate things. So Jeff, also in video, saw a world where it’s a multi hundred billion dollar global market and Prime Video can be a winner in and of itself. So you have Prime Video as a business within a business.

It makes prime better. And Prime Video with its scale can also be a winner. So there’s massive synergies and we can break some of that down. But that’s the birth of Prime Video within Prime.

And so your expansion internationally, I know you led the helm in terms of the expansion into over 200 countries. And was that from, you know, I was doing some research. I was kind of stalking online, Tim, I noticed. Was it from 2014 to about 2016 when that international expansion into those other countries took place? And so your expansion internationally, I know you led the helm in terms of the expansion into over 200 countries. And was that from, you know, I was doing some research. I was kind of stalking online, Tim, I noticed. Was it from 2014 to about 2016 when that international expansion into those other countries took place?

Country specific offering in India, the movie capital of the world, Bollywood and Hollywood content in India. We launched a local specific offering in India and globally India. Amazon Prime Video in India is actually what I among friends will say is my greatest success story at Amazon. Because nobody thought India was worthwhile. But I actually knew, having been part of the launch of the retail launch in India, that if I could just make that case, get that project to Jeff, we could get Prime Video launched for real offering in India.

And we can talk more about that at some point. But what we launched with the rest of world when we launched in the 200 countries and territories was a very MVP minimum viable product offering of American catalog, sort of content with English language UI and US dollars to pay. And then we went back over the next three years and went to the countries that mattered like Mexico, Brazil, France, Italy, Spain and started adding local content, local originals, local payments, local language.

And so our team got the initial, what we call the base coat. Get the base coat on and then add the color, the bright colors and all the countries that matter. And I don’t mean that some countries don’t matter. When you look at international expansion, it’s really the top. Once you hit the top 20 GDP countries or so, you’re in 90 plus percent of the world’s opportunity today.

Wow, that’s fascinating. And so you were kind of starting to kind of describe to us what I’m hearing is a process. And I know we’re running out of Time here, but I do want to make sure that we kind of talk about that process again at a very high level and also from a business infrastructure perspective.

So if you’re listening to this show for the first Time, business infrastructure is an operations system for linking your people, processes, tools and technologies to ensure that growth happens in a profitable and sustainable way.

So basically everything that Tim has explained to us for almost the past hour. So as I’m listening to you Tim, you mentioned having the team so that people component of business infrastructure, finding, finding people who want it to be stretched but then eventually hiring those I guess subject matter experts as well.

So it sounds like you may have built a team that, that was almost a hybrid. You know, in terms of people who were just had the dogged rugged passion and enthusiasm and wanted to take on a new challenge combined with those who already maybe had a background, had some of the skill sets that you were looking for or that were required to truly I guess make the launch successful as you went into each country. Is that correct?

Yes, that’s fair. I would say it’s at Amazon most teams historically have been comprised of more of the former. The dogged. This sounds like a bad word. Indoctrinated. No, Amazon culture values are highly skilled product people. Where Amazon takes the view, the way I would say it to people is in early days and kind of the culture of Amazon would be do you hire the Rhodes Scholar or do you hire the industry expert?

Amazon would always lean towards the Rhodes scholar, the person with huge potential, super creative thinker as opposed to expertise. And Amazon is smart enough to know you do need to have people who know the industry. So in something like content acquisition, which is the really industry specific stuff you need to know, you need to hire people who know Hollywood, who know how to have relationships and go how to acquire that content.

Whereas marketing, interestingly this is a place where Amazon had to learn A bit. We went with our typical performance marketing people. We’re not going to do TV advertising. Amazon for a long Time did almost no TV advertising. Content is no different than other types of content.

What we learned from Love Film and I made kind of a tour through Amazon with the marketing people at Love Film is that content marketing is different. Content is emotive. So video, music, apparel, these are very emotive things, appeal to people’s emotions. And so TV marketing, brand marketing is important. So that was kind of a learning from video. N

o, we’re going to need to do TV advertising to make shows. And so we then realized, oh no, we have to have more TV advertising expertise in this space. But the team generally would weigh much more heavily towards quote unquote, Amazonians who are all round athletes can play any position. The utility infielders versus the industry experts. But a healthy dose, especially as you become, you know, more bigger and bigger and need to go deeper and deeper.

Got it. And so as I’ve been listening to you, I’ve kind of been jotting down what sounds to me like a very, a broad process that you all kind of go through. And so starting with, number one, hiring really smart people that can be cross trained and really can take on and to your point, be indoctrinated into the culture of Amazon, really espousing those four core values that you mentioned earlier.

And I know from our very first conversation, Tim, you mentioned 14 management principles. I know we don’t have Time to get into that, but I am curious, can we find that somewhere? Is that available online? Is that something that.

Absolutely. Amazon’s added two leadership principles in recent years, but for a long Time there were 12 leadership principles. So they’re called leadership principles, which is really interesting.

At some point we can do a podcast on leadership because I do think Amazon has the right view of leadership. And that is instead of calling them, you know, values or core principles, Amazon has 14 leadership principles, meaning in its definition, everyone is a leader. And that’s how I view life. You know, we’re all leading our own life. One of the books on my list would be the Inner Game of Tennis by Timothy Galloway.

It’s a kind of the first sports psychology book. And he has a great expression. I coached girls basketball for a long Time and I would tell the girls that you’re your own best coach. And when I managed, I would tell people you’re your own best manager. You lead your own life, you manage your own life. Try to do it objectively, don’t be hard on yourself. But the way Timothy Galloway would say it is if you miss a shot, you know, I tell the basketball players, don’t say ah, say right, left, long, short and just self correct.

You know, I could have said this this way or that way, could have written it this way or that way. Don’t beat yourself up, just make the correction and move forward. And that’s a principle of operational excellence. I would say one of the elements of operational excellence is look at the root cause. And if you’re not making mistakes, you’re not taking enough risk. Amazon encourages failure. What it absolutely discourages and does not allow is failure on the same thing twice.

It will take a decision. 70 to 80% of the data dives incredibly deep. People have never worked at a place like Amazon. Can’t believe how deep Amazon dives. Infamous for their six pagers and their PRFAQs, which is how you write up things. A six page document with about another six pages of appendices. And I’ll make a plug for my friend Bill Carr and his book Working Backwards that explains this. But then you get as much data as you can, you make a decision.

It will take a decision. 70 to 80% of the data dives incredibly deep. People have never worked at a place like Amazon. Can’t believe how deep Amazon dives. Infamous for their six pagers and their PRFAQs, which is how you write up things. A six page document with about another six pages of appendices. And I’ll make a plug for my friend Bill Carr and his book Working Backwards that explains this. But then you get as much data as you can, you make a decision.

If it’s not automated, it still needs to be a systematic. Something that happens systematically and you prevent it from happening again. It’s not good intentions that prevents it. It’s a systematic, ideally automated process that prevents it from happening. So that’s how Amazon thinks about problems and taking risk. And on hiring, I would say we talked about hiring, even hiring at Amazon is operational excellence.

It would be a great example of operational excellence, especially since you start at the top. The rigor around hiring is so deep and the approach is kind of like we’d rather let 10 good people go than hire one mistake. So the real innovation there from Amazon is you have a bar raiser on every loop who’s not part of the team and their job is to maintain excellence, to make sure that person is expressing those leadership principles which Amazon interviews on.

So the leadership principles run through the fabric of the whole company, starting with hiring, to how people think and communicate, all the way to how you are reviewed. So an example would be customer obsession, ownership Dive deep, insist on the highest standards, bias for action, having backbone, disagreeing and committing.

The one that’s Jeff’s favorite is right a lot. The way I would tell people you’re right a lot is by involving everybody and following the process. You don’t do things alone, you do it as a team. So follow the process and you’ll be right a lot. But those are examples, and you can, yes, find them online.
You know, I have a, Another quick side note. I have a friend who interviewed for a cybersecurity position at Amazon. This was a couple of years ago. In fact, it was right before the COVID lockdown. And he said, you know, I went through like 10 rounds of interviews and I was like, oh, my God. So it was, it was very intense.

So I know just from, from his experience, I, I can attest to the rigor that goes into truly building, you know, an A team. So, you know, getting back to the process, piece of it. And I know we do have to start wrapping it up here, unfortunately.

I feel like we should do a part two to this. Tim, I don’t know if, I don’t know how you feel about it, but I’d love to. Yeah, okay. That would be great.

So you, you also mentioned that as you all started to, I would imagine there was obviously some discussion or some type of, I don’t know, decision type matrix that you all may have leveraged possibly to consider which countries to start launching Prime Video in. And then as you, once you did enter that, that market, starting with that mvp, very basic offering that you described earlier, and then eventually adding the local content.

Local content meaning content from that particular country. You know, I would love to get into specific tools that you all may have, may have used. But, but speaking of tools, if you can, do you have any resources that you would like to share with our listeners? You’ve already shared so many.

You know, in fact, there was a book that you mentioned to me when we first spoke, and I, I went on Amazon and I ordered it right away. It’s called the Hard Thing About Hard Things by Ben Horowitz. Yeah, Hope I pronounced his last.

Yeah, So I, I, I literally ordered that. Whenever, whenever people tell me about books or if I’m watching something and the name of a book is mentioned, and it sounds very interesting to me, I always go and put it on my Amazon wish list.

And then when I get around to it, I just start, you know, buying, buying books from my wish list. But that was one that I ordered right away. You also mentioned the inner Game of tennis Working backwards, Brene Brown will definitely make sure we include some of Brene Brown’s stuff, especially her TED talks, in our show Notes.

Is there anything else that you think is helpful, even if it’s from just, you know, we’ve talked a lot about leadership too, because that’s so important.

Anything else that you think is helpful or that you found to be helpful as you were transitioning into these different roles at Amazon and even beyond, because we haven’t even talked about what you’re doing right now.

I’m reading a lot, so I think and I ask people. So one thing I did recently is so I did some consulting work recently for a company in Europe, a large company in Europe and the chief strategy officer there’s has a cafe and asked me for my top 10 books because she has she puts books up in the cafe and it was a very hard exercise to come up with the top 10 books that I would read. But what I would say is in life, do what inspires you, read what inspires you.

Don’t read what you quote unquote should. If you my two cents is that when you catch yourself saying should stop. Do what you want to do. Because get yourself healthy and of right mind and do what you want to do, do what you need to do, don’t not do what you should do and read things that inspire you and ask people.

So We’ve talked about YouTube as a treasure trove. You can ask your friends, ask colleagues, give me the top 10 might be too many and they’ll have a hard Time. A friend of mine, when I asked them what’s your top five books and that’s next on my list. It’s the book about Nike and so the whole Nike story and it’s got something like 4.7, 4.8 stars on Amazon.

But I’m right now reading everything I can by James Baldwin and the reason I read James Baldwin is he is somebody who like the bar raiser, let’s say sits outside the group talks about how people of color have a perspective on America that others don’t and that those perspective they send chills through me when you think about the stories and they’re at the grassroots about real people and real things. It’s fiction and they’re heart wrenching, heartbreaking, moving, provocative stories.

I read a book that I think is just a classic that everybody should read by a poet farmer named Wendell Berry called the Unsettling of America. And I am very much into small organic farming.

I’m part of an Organization called soil that gives 0% loans to small organic farmers. And I do worry about the Amazons, the Googles, the Facebooks and its implications for our small communities. So helping small farmers, if we can invest in our local communities, our local people, those dollars at nearly a 4 to 1 ratio stay in the local community.

When you spend something on Amazon, it goes outside the community. When you buy something at a local farmer’s market, you help buy something at a local business. Yes, it does cost a little more. But also ask yourself what are the values?

What sort of society do I want to live in? So the Unsettling of America. Another book that I read in my kind of I’m on a bit of a quest to fulfill my vision is Teaching to Transgress by Bell Hopkins. Amazing book about teaching as liberation. And then 10 years to midnight, which PwC put out is a book that I think people should read.

I’m really surprised more people aren’t reading it. But it basically says it’s not just environmental but the sociopolitical, the polarization, the breakdown of our institutions, the breakdown of local economics and communities. All of these we have 10 years to fix before it’s midnight. So it’s an opTimistic book.

We can change these things. I am an opTimist. We can make the world a better place. But that is my vision and my generation didn’t do a very good job at this leave the world a better place than we found it. People can say that. But again, great companies and great people, they try to put their vision, their words into action.

So how can we actually do that? And finding books, finding places and when you’re in your company, if you’re a small, medium, business size owner, make sure that it does have a purpose, a vision that people know what it is. The starting point of operational excellence is people pulling in the same direction for what you’re trying to achieve.

The purpose is not making money. That is what happens if you succeed on your mission. The purpose is creating value for customers in society. It doesn’t have to be provocative, it doesn’t have to change the world. But how am I going to make my customers lives better and work backwards from that and make sure everybody in the organization is in square inspired to do that.

I just mentioned Nike. I love their vision which is to to bring inspiration to every athlete in the world. Footnote on athlete if you have a body, you’re an athlete. Inspiration is an inspiration. I’m an athlete too and I’m going to be inspired to be an athlete. And so that’s great. But whatever that vision is that you have, that’s not necessarily changing.

That’s not solving our environmental problems. But live that vision. Bring value to your customers and ask people, tap into your community. The most important thing you can do coming back to where we started is humility, I believe. Ask people for help. Ask your competitors. Ask the person down the street, how did you handle this situation?

How do you handle that situation? Life experiences will teach you a lot more than any book. And do read and look at YouTube and other sources like that.

Wow. We definitely have to do a part two because there’s so much wisdom that you have, Tim and I can’t thank you enough for coming onto the show and sharing just a small snippet of that with us. I really appreciate it.

I do want to make sure that we mention another organization that you are working very closely with and that’s you were talking about working with farmers. Bitcoin org.

Bitcoin.org and Bitcoin is a crowdsourcing nonprofit. It will be launching in the coming months and it is the source by which we’re giving 0% loans to small organic farmers. That really serves three important purposes in my view.

It helps the environment because you’re investing in the soil and the soil is a great source of carbon capture. It helps with the health and security of your local community. We’ve seen in Covid that people do worry about getting their food and our food supplies and they aren’t as resilient as they thought.

But the goal of our organization is to make sure you have your local food source that Everybody has ulTimately 10, 20, 30% of their food that they get from a food source within 50 miles. And then the third thing, something that really excites me that I keep mentioning is it helps your local economy.

We tend to invest in companies and far off places that do things we don’t understand and instead of investing right here in our own backyards and things we do understand and people who we know. So if you can invest in a small local business by being a consumer there or through something like bcoin where you know, your money goes to help people and our loans range from 10,000 to 100,000. It’s really a small amount of money to get these farmers going and produce good healthy food for their local community.

Well that is definitely admirable. And I know you’re also doing, you know, as you mentioned earlier, consulting work. You’re a board advisor. I know you’re now adding teaching to Your, your list of, of things that you have going on. What’s the best way for people to connect with you?

Tim, Right now, it’d just be through LinkedIn. So reach out to me through LinkedIn. Tim. You can search Tim Leslie. Uh, and you’ll see me loving Roots and Amazon and send me a note through LinkedIn. And I, I make it a point to connect with everybody who reaches out to me. So I would look forward to that.

And, you know, I would highly encourage everyone who is listening to this. Definitely make sure you reach out to Tim again. That’s T I M L E S L I E. Definitely connect with Tim on LinkedIn. I just want to. I usually like to end each episode with a recap of highlights. There’s so many. I literally ran out of room on my pages here to take notes. But a few quotes that I do want to make sure that I just repeat.

Well, first of all, thank you again for being so open and honest and candid, frankly, about your career transition and making a very cognizant decision that did not come easily or lightly to transition from law, especially having a law degree from Yale’s law school.

I would love to know what your family thought about that decision and, you know, but seriously, transitioning from law and more into business. And as you’ve said, it’s. It’s a decision that you made. You never looked back and you have absolutely no regrets. And that’s. That. That’s key. Living life without regret.

I also like the fact that you reminded us that great leaders lead from behind and that the best leaders are humble and vulnerable. Also liked when you said that, you know, according to Jeff Bezos, you know, the company should always operate as though it’s day one and operate as though you always have a competitor at your heels.

And that’s what kind of forces you into that mindset of the need to literally innovate or die. Also, your definition for operational excellence, as you stated so eloquently, performing everything that you do at the highest level and that’s achieved when every person within the entire organization and every process participates in creating value for the customer.

I also want to just say one of the things that’s become so apparent to me, especially listening to you throughout the course of this interview, is the importance of being careful with the words that you choose. We always talk about coming up with a vision statement or a mission statement for our companies, and a lot of Times they’re vague and just kind of empty, honestly.

But when you have a mission statement or a vision that says becoming the world’s most customer centric company and everything that you do embodies that. That’s how you can become or your company can become an Amazon and to your point is much bigger than its original founder.

If you’re fascinated by Tim’s work experiences, I know I certainly am. I enjoyed every single minute of this conversation. And if you can benefit from his counsel, make sure you connect with him him again on LinkedIn. Tim Leslie Tim, thank you so much for coming onto the show today.

Thank you Alicia. It’s been a pleasure.

Now don’t forget to check out BusinessInfrastructure TV. We’ll have links to all of these books that Tim mentioned as well as some of the other resources that he shared throughout the course of this interview. No need to type out that web address, just make sure you click the link that’s in the description of the episode.

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Remember, stay focused, be encouraged, keep operating as good on the inside as you look on the outside. This entrepreneurial journey is a marathon and not a sprint. Until the next Time, thank you for Listening to Business Infrastructure, the podcast about curing Back office blues with Alicia Butler Pierre.

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