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Reflecting on one very, very strange year at Uber

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As most of you know, I left Uber in December and joined Stripe in January. I've gotten a lot of questions over the past couple of months about why I left and what my time at Uber was like. It's a strange, fascinating, and slightly horrifying story that deserves to be told while it is still fresh in my mind, so here we go. 

I joined Uber as a site reliability engineer (SRE) back in November 2015, and it was a great time to join as an engineer. They were still wrangling microservices out of their monolithic API, and things were just chaotic enough that there was exciting reliability work to be done. The SRE team was still pretty new when I joined, and I had the rare opportunity to choose whichever team was working on something that I wanted to be part of. 

After the first couple of weeks of training, I chose to join the team that worked on my area of expertise, and this is where things started getting weird. On my first official day rotating on the team, my new manager sent me a string of messages over company chat. He was in an open relationship, he said, and his girlfriend was having an easy time finding new partners but he wasn't. He was trying to stay out of trouble at work, he said, but he couldn't help getting in trouble, because he was looking for women to have sex with. It was clear that he was trying to get me to have sex with him, and it was so clearly out of line that I immediately took screenshots of these chat messages and reported him to HR.

Uber was a pretty good-sized company at that time, and I had pretty standard expectations of how they would handle situations like this. I expected that I would report him to HR, they would handle the situation appropriately, and then life would go on - unfortunately, things played out quite a bit differently. When I reported the situation, I was told by both HR and upper management that even though this was clearly sexual harassment and he was propositioning me, it was this man's first offense, and that they wouldn't feel comfortable giving him anything other than a warning and a stern talking-to. Upper management told me that he "was a high performer" (i.e. had stellar performance reviews from his superiors) and they wouldn't feel comfortable punishing him for what was probably just an innocent mistake on his part.

I was then told that I had to make a choice: (i) I could either go and find another team and then never have to interact with this man again, or (ii) I could stay on the team, but I would have to understand that he would most likely give me a poor performance review when review time came around, and there was nothing they could do about that. I remarked that this didn't seem like much of a choice, and that I wanted to stay on the team because I had significant expertise in the exact project that the team was struggling to complete (it was genuinely in the company's best interest to have me on that team), but they told me the same thing again and again. One HR rep even explicitly told me that it wouldn't be retaliation if I received a negative review later because I had been "given an option". I tried to escalate the situation but got nowhere with either HR or with my own management chain (who continued to insist that they had given him a stern-talking to and didn't want to ruin his career over his "first offense"). 

So I left that team, and took quite a few weeks learning about other teams before landing anywhere (I desperately wanted to not have to interact with HR ever again). I ended up joining a brand-new SRE team that gave me a lot of autonomy, and I found ways to be happy and do amazing work. In fact, the work I did on this team turned into the production-readiness process which I wrote about in my bestselling (!!!) book Production-Ready Microservices. 

Over the next few months, I began to meet more women engineers in the company. As I got to know them, and heard their stories, I was surprised that some of them had stories similar to my own. Some of the women even had stories about reporting the exact same manager I had reported, and had reported inappropriate interactions with him long before I had even joined the company. It became obvious that both HR and management had been lying about this being "his first offense", and it certainly wasn't his last. Within a few months, he was reported once again for inappropriate behavior, and those who reported him were told it was still his "first offense". The situation was escalated as far up the chain as it could be escalated, and still nothing was done.

Myself and a few of the women who had reported him in the past decided to all schedule meetings with HR to insist that something be done. In my meeting, the rep I spoke with told me that he had never been reported before, he had only ever committed one offense (in his chats with me), and that none of the other women who they met with had anything bad to say about him, so no further action could or would be taken. It was such a blatant lie that there was really nothing I could do. There was nothing any of us could do. We all gave up on Uber HR and our managers after that. Eventually he "left" the company. I don't know what he did that finally convinced them to fire him. 

In the background, there was a game-of-thrones political war raging within the ranks of upper management in the infrastructure engineering organization. It seemed like every manager was fighting their peers and attempting to undermine their direct supervisor so that they could have their direct supervisor's job. No attempts were made by these managers to hide what they were doing: they boasted about it in meetings, told their direct reports about it, and the like. I remember countless meetings with my managers and skip-levels where I would sit there, not saying anything, and the manager would be boasting about finding favor with their skip-level and that I should expect them to have their manager's job within a quarter or two. I also remember a very disturbing team meeting in which one of the directors boasted to our team that he had withheld business-critical information from one of the executives so that he could curry favor with one of the other executives (and, he told us with a smile on his face, it worked!).

The ramifications of these political games were significant: projects were abandoned left and right, OKRs were changed multiple times each quarter, nobody knew what our organizational priorities would be one day to the next, and very little ever got done. We all lived under fear that our teams would be dissolved, there would be another re-org, and we'd have to start on yet another new project with an impossible deadline. It was an organization in complete, unrelenting chaos. 

I was lucky enough during all of this to work with some of the most amazing engineers in the Bay Area. We kept our heads down and did good (sometimes great) work despite the chaos. We loved our work, we loved the engineering challenges, we loved making this crazy Uber machine work, and together we found ways to make it through the re-orgs and the changing OKRs and the abandoned projects and the impossible deadlines. We kept each other sane, kept the gigantic Uber ecosystem running, and told ourselves that it would eventually get better.

Things didn't get better, and engineers began transferring to the less chaotic engineering organizations. Once I had finished up my projects and saw that things weren't going to change, I also requested a transfer. I met all of the qualifications for transferring - I had managers who wanted me on their teams, and I had a perfect performance score - so I didn't see how anything could go wrong. And then my transfer was blocked. 

According to my manager, his manager, and the director, my transfer was being blocked because I had undocumented performance problems. I pointed out that I had a perfect performance score, and that there had never been any complaints about my performance. I had completed all OKRs on schedule, never missed a deadline even in the insane organizational chaos, and that I had managers waiting for me to join their team. I asked what my performance problem was, and they didn't give me an answer. At first they said I wasn't being technical enough, so I pointed out that they were the ones who had given me my OKRs, and if they wanted to see different work from me then they should give me the kind of work they wanted to see - they then backed down and stopped saying that this was the problem. I kept pushing, until finally I was told that "performance problems aren't always something that has to do with work, but sometimes can be about things outside of work or your personal life." I couldn't decipher that, so I gave up and decided to stay until my next performance review. 

Performance review season came around, and I received a great review with no complaints whatsoever about my performance. I waited a couple of months, and then attempted to transfer again. When I attempted to transfer, I was told that my performance review and score had been changed after the official reviews had been calibrated, and so I was no longer eligible for transfer. When I asked management why my review had been changed after the fact (and why hadn't they let me know that they'd changed it?), they said that I didn't show any signs of an upward career trajectory. I pointed out that I was publishing a book with O'Reilly, speaking at major tech conferences, and doing all of the things that you're supposed to do to have an "upward career trajectory", but they said it didn't matter and I needed to prove myself as an engineer. I was stuck where I was. 

I asked them to change my performance review back. My manager said that the new negative review I was given had no real-world consequences, so I shouldn't worry about it. But I went home and cried that day, because even aside from impacts to my salary and bonuses, it did have real-world consequences - significant consequences that my management chain was very well aware of. I was enrolled in a Stanford CS graduate program, sponsored by Uber, and Uber only sponsored employees who had high performance scores. Under both of my official performance reviews and scores, I qualified for the program, but after this sneaky new negative score I was no longer eligible. 

It turned out that keeping me on the team made my manager look good, and I overheard him boasting to the rest of the team that even though the rest of the teams were losing their women engineers left and right, he still had some on his team. 

When I joined Uber, the organization I was part of was over 25% women. By the time I was trying to transfer to another eng organization, this number had dropped down to less than 6%. Women were transferring out of the organization, and those who couldn't transfer were quitting or preparing to quit. There were two major reasons for this: there was the organizational chaos, and there was also the sexism within the organization. When I asked our director at an org all-hands about what was being done about the dwindling numbers of women in the org compared to the rest of the company, his reply was, in a nutshell, that the women of Uber just needed to step up and be better engineers.

Things were beginning to get even more comically absurd with each passing day. Every time something ridiculous happened, every time a sexist email was sent, I'd sent a short report to HR just to keep a record going. Things came to a head with one particular email chain from the director of our engineering organization concerning leather jackets that had been ordered for all of the SREs. See, earlier in the year, the organization had promised leather jackets for everyone in organization, and had taken all of our sizes; we all tried them on and found our sizes, and placed our orders. One day, all of the women (there were, I believe, six of us left in the org) received an email saying that no leather jackets were being ordered for the women because there were not enough women in the organization to justify placing an order. I replied and said that I was sure Uber SRE could find room in their budget to buy leather jackets for the, what, six women if it could afford to buy them for over a hundred and twenty men. The director replied back, saying that if we women really wanted equality, then we should realize we were getting equality by not getting the leather jackets. He said that because there were so many men in the org, they had gotten a significant discount on the men's jackets but not on the women's jackets, and it wouldn't be equal or fair, he argued, to give the women leather jackets that cost a little more than the men's jackets. We were told that if we wanted leather jackets, we women needed to find jackets that were the same price as the bulk-order price of the men's jackets. 

I forwarded this absurd chain of emails to HR, and they requested to meet with me shortly after. I don't know what I expected after all of my earlier encounters with them, but this one was more ridiculous than I could have ever imagined. The HR rep began the meeting by asking me if I had noticed that *I* was the common theme in all of the reports I had been making, and that if I had ever considered that I might be the problem. I pointed out that everything I had reported came with extensive documentation and I clearly wasn't the instigator (or even a main character) in the majority of them - she countered by saying that there was absolutely no record in HR of any of the incidents I was claiming I had reported (which, of course, was a lie, and I reminded her I had email and chat records to prove it was a lie). She then asked me if women engineers at Uber were friends and talked a lot, and then asked me how often we communicated, what we talked about, what email addresses we used to communicate, which chat rooms we frequented, etc. -  an absurd and insulting request that I refused to comply with. When I pointed out how few women were in SRE, she recounted with a story about how sometimes certain people of certain genders and ethnic backgrounds were better suited for some jobs than others, so I shouldn't be surprised by the gender ratios in engineering. Our meeting ended with her berating me about keeping email records of things, and told me it was unprofessional to report things via email to HR.

Less than a week after this absurd meeting, my manager scheduled a 1:1 with me, and told me we needed to have a difficult conversation. He told me I was on very thin ice for reporting his manager to HR. California is an at-will employment state, he said, which means we can fire you if you ever do this again. I told him that was illegal, and he replied that he had been a manager for a long time, he knew what was illegal, and threatening to fire me for reporting things to HR was not illegal. I reported his threat immediately after the meeting to both HR and to the CTO: they both admitted that this was illegal, but none of them did anything. (I was told much later that they didn't do anything because the manager who threatened me "was a high performer").

I had a new job offer in my hands less than a week later. 

On my last day at Uber, I calculated the percentage of women who were still in the org. Out of over 150 engineers in the SRE teams, only 3% were women. 

When I look back at the time I spent at Uber, I'm overcome with thankfulness that I had the opportunity to work with some of the best engineers around. I'm proud of the work I did, I'm proud of the impact that I was able to make on the entire organization, and I'm proud that the work I did and wrote a book about has been adopted by other tech companies all over the world. And when I think about the things I've recounted in the paragraphs above, I feel a lot of sadness, but I can't help but laugh at how ridiculous everything was. Such a strange experience. Such a strange year. 

Note: I am temporarily disabling comments because there are too many for me to keep up with! 
 

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sillygwailo
5 days ago
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Toronto, ON
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The Tipping Point

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The last couple of weeks have been (very) intense and filled with excitement. After an amazing alpha public release we have been busy applying the lessons learned, fixing bugs and implementing new features. Many thanks, again, to everyone for the warm welcome and kind words following the first alpha versions!
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sillygwailo
10 days ago
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Toronto, ON
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Introducing Turn Touch, a beautiful wooden remote for lights, devices, apps, and NewsBlur

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Turn Touch is a solid wood remote… and it’s about to change the way you use NewsBlur.

Change how?

Here’s how. Turn Touch connects to apps and devices in your home. Think Hue lights and Sonos speakers. Your Mac, your phone, etc.

It also connects to NewsBlur.

This is big. It means you can wake up in the morning, grab a cup of coffee, and cycle through news from across the room. Or, hook your Mac up to a display (maybe your living room TV) and skip through photo blogs, headlines, and the day’s best writing.

It’s kind of like getting a new set of speakers. Where before, you’d be chained to your computer with headphones; now, you can listen to music from anywhere you’d like. With Turn Touch, you can leave your computer and read the news no matter what you’re doing— laundry, the dishes, or enjoying a lazy Sunday on your couch.

Get one. Or all three.

Turn Touch is on Kickstarter. Back the project to get your very own. Or—and this is my sincere recommendation—get the complete set, save some money, and give one away to a friend.

I’ve been working on Turn Touch for years and I hope it shows.

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samuel
19 days ago
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This is the big one. Please back Turn Touch and help support NewsBlur!
The Haight in San Francisco
duerig
19 days ago
Already backed. Congrats on your launch!
genseng
19 days ago
I guess I'll be that guy; is there Android support? Not mentioned in the campaign so I assume no.
duerig
19 days ago
It is a bluetooth device so in principle is device-agnostic. I don't know how it will work in practice, though. I'm going to be trying to get it running with a Raspberry Pi.
chrisrosa
19 days ago
i'm not sure how much I'll use it, but I'll back Newsblur just the same.
samuel
19 days ago
In terms of support for non-Apple devices, not yet but it is planned. Android will be a stretch goal. I wish I could have launched out of the gate with it, but I just cannot afford to unless I hit certain numbers. But keep spreading the word about Turn Touch and if it gets popular then Android will be the first platform I expand to.
genseng
19 days ago
Thanks Samuel, I was hoping you might respond with something along those lines.
spiffytech
19 days ago
What's the developer story? How easily can I connect a button to a webhook?
samuel
19 days ago
Easy, there's a Custom URL app that can hit websites on single taps and double taps.
spiffytech
19 days ago
Glad to hear it! Maybe mention that on the page. It's the biggest thing I'm interested in, but the Kickstarter page doesn't include "developer", "webhook", or "Custom URL".
samuel
19 days ago
It does now. Thanks!
digdoug
19 days ago
Backed. And I'll echo others here. I'm not sure how I'll use it, but you've more than earned my trust over the last few years. I'm happy to back it based on that alone. The fact that it might be super cool is just a bonus!
sillygwailo
18 days ago
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Toronto, ON
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18 days ago
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Atwitter

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A series of communications related to Twitter coalesced in front of me this week.

Warren Ellis, in his Orbital Operations newsletter, mentioned that he’d purged his Twitter archive back in December. Much in the same way it had never occurred to me that one could stop consuming sugar, it had never occurred to me that this was something one could do, or that one would want to do.

So I was, of course, immediately intrigued.

Then I read in The Guardian that U.S. Customs and Border Protection has added a (currently) optional request for social media account information to its visa application form. It wasn’t so much that I was fearful of being personally affected by this–I don’t need a U.S. visa, as I’m a citizen–as I was woken up to the fact that the tweets in my timeline are, in aggregate, a digital paper trail of my comings and goings, feelings and actions. A trail that government agencies think it useful enough to mine.

The creepy feeling this engendered was only amplified by reading a CBC story this morning that the Canada Revenue Agency–our tax agency–is starting to do much the same thing.

The combination of realizing that I could delete my archive–in the spiritual as opposed to technical sense–and that the only loss suffered as a result will be my data mining attack surface, combined with an increasing realization of how useful (to others) that attack surface is becoming, was enough to push me over the edge.

So I downloaded my Twitter archive, then fired up a Windows 7 virtual machine on my MacBook Air, installed Twitter Archive Eraser, and went through the process of deleting the 36,318 tweets I emitted over the last decade.

It took about 30 minutes to get it all done; I deleted my thousands of direct messages and my 3,314 favourites while I was at it (these are more cumbersome to erase because of Twitter’s rate-limiting; patience is required).

Screen shot showing 36319 tweets in Twitter Archive Eraser before deleting.

This process was, it turns out, incredibly freeing.

So freeing, in fact, that another mention of Twitter, in this week’s edition of The New Yorker Radio Hour, also caught my attention. Dan Savage talked to David Remnick about Twitter:

Savage: Twitter. I’m addicted to it. Literally it’s the last thing I look at every night in bed before I fall asleep and the first thing I look at every morning on the way to the bathroom. And as I do it I’m like “why am I putting this needle in my arm.”

Remnick: I don’t understand why you do it. I get hit on this all the time. I’m not on it, and yet I read it. I peek over the hedge as it were. But I just know if I went on it, it would be a time suck.

Savage: It is.

In Savage I saw myself.

I love Twitter (how could I have tweeted 36,318 times without loving it). And yet, as Remnick fears and Savage confirms, it is a time suck. Like Savage, checking Twitter has been a morning habit, an evening habit, and a standing in line to get coffee habit. I had cause to wonder not so much “why am I putting this needle in my arm?” as “if I stop putting this needle in my arm, what else could I spend my time doing?”.

I’ve tried and failed before to quit, most splashily back in 2009.

So this time I decided to try a more nicotine-patch style withdrawal: after I deleted my archive, my direct messages and my favourites, I also unfollowed everyone but Catherine and Oliver, reasoning that if there’s nothing on my timeline, what’s there to be addicted to?

Time will tell whether the patch works.

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sillygwailo
22 days ago
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Toronto, ON
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Preview NewsBlur's upcoming hardware device, Turn Touch

4 Comments and 11 Shares

I have something very exciting to share with you today. I’ve been working on a secret project called Turn Touch and I’m just about ready to show it to you. Signup on turntouch.com to find out.

It’s a new kind of device and it’s machined out of solid wood. I built it to last, much like my other projects (for instance the news reader you’re likely reading this in). Turn Touch is built for NewsBlur, among many other things.

Turn Touch will be launching on Kickstarter next week and I want to ask for your help. When I launch my campaign I’m going to need people like you to share it with people who look to you for recomendations on what’s good. You already use NewsBlur, so you’re already known for having good taste.

Now, you probably want to know what Turn Touch is and actually looks like, yeah? Then signup on turntouch.com.

You’ll get to preview the Kickstarter campaign and offer me any feedback you have. You’ll get to see Turn Touch and find out what it offers you.

I’ve been working on this as a side project for that past few years. And by signing up you’ll have the first access to it.

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samuel
24 days ago
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It's a remote for NewsBlur (among other things).
The Haight in San Francisco
Splike
24 days ago
Can't wait to find out what this wooden thing actually does! Maybe it's like the Pokémon Go plus device. It will blink when good stories are nearby!
christophersw
24 days ago
I'm hoping for a magic "good news" button that filters everything not fit for /r/aww out of my feeds. :-) ... also it should make popcorn...
theprawn
24 days ago
I love this! I wish you success, but I cannot, however, support Kickstarter as a company. Hope this goes to market!
llucax
24 days ago
I hate this "sign-up to see what is it". I hope somebody posts an image or something on a public web that doesn't require sign-up or login
samuel
23 days ago
It's launching Tuesday. If you don't care to signup you can wait until then. I need people to signup so that I can send out an email on the day of the launch and have a nice start to the campaign.
sirshannon
22 days ago
Email newsletters and announcements are cool but I think the audience here on NewsBlur tends to skew towards RSS ;)
sillygwailo
23 days ago
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Toronto, ON
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24 days ago
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2 public comments
torrentprime
24 days ago
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I'd back that kickstarter if it could somehow make Trump go away
San Jose, CA
samuel
23 days ago
If only.
tingham
24 days ago
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Signed up months ago, no emails. Weird.
Cary, NC
samuel
24 days ago
You should have received at least three emails by now. I suggest signing up again, it will automatically email you the "Sneak peak" email.
GreenChange
24 days ago
I've also put my Gmail address in, and not received anything.

eCommerce in the age of Amazon

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Benedict Evans — a partner at venture capital firm Andreessen Horowitz — succinctly summarized the reason for Amazon’s dominance.

Throughout its history, there have been many skeptics of “Earth’s biggest bookstore,” as they called themselves at the start. And for the very reason Benedict Evans cites: it’s a low margin commodity retailer. How could such a model work out?

Well, it did.

If we want to be successful in the world of eCommerce, we must understand, and really get to know, the world’s greatest eCommerce company.

Let’s put Amazon’s success in perspective. If you bought 100 shares of Amazon’s stock when it IPO’d on May 15th, 1997, your magic price to turn your investment into $1 million was $833.34. September 30th, 2016 was a milestone day for this mythical investor, because on that day, Amazon closed at $837.31. It’s still around this price, and many in the market just expect it to continue to grow.

Today, we’re living in Amazon’s world. They have a dominant advantage in eCommerce and retail. Everyone else has to choose whether to battle Amazon, play within their ecosystem, some mixture of the two, or find a niche outside of Amazon’s current market — something that is getting harder to do every day.

The key to living in Amazon’s world is to understand it.

Amazon is eating the world of eCommerce

It’s estimated that Amazon now has 50 million Prime customers just in the United States — people that pay around $100 for the plethora of benefits Amazon is constantly dishing out. Fifty. Million. It’s estimated they have at least 10 million more customers internationally.

Prime video, music, and 21 other currently listed features are certainly appealing. But for the eCommerce sector, we all know it’s shipping and what a “membership” causes for buyers that matters most.

Free two day shipping anywhere is extremely hard to match. Fulfillment is really, really hard when you do it yourself, or even if you have a team to manage it. It requires incredible diligence, and is very costly.

Amazon gets unbelievably low rates to ship all over the world, and they don’t have to make money on shipping, because they make money in many other ways. Free shipping is the go-to Amazon carrot. Independent store owners don’t have such luxuries.

And when a customer knows they have a Prime membership and the promise of a new item in two days (or in some places, same day!), for no extra cost, it’s natural to look there. Once you go Prime, you always look to see if what you want is on Amazon.

Morgan Stanley released a survey that cites how, “about 40% of Amazon Prime members spend over $1,000 a year on Amazon, while only 8% of non-Prime shoppers do so.” When lifetime value (LTV) is the bread and butter eCommerce statistic, that’s a pretty incredible stat.

The pie is getting bigger across the board

eCommerce is growing tremendously. Mary Meeker’s famous Internet Trends report shows the growth of eCommerce from 2000 to 2015:

eCommerce is directly taking away from physical retail. Pam Goodfellow writes, “With the big discounter’s share slipping since peaking in December 2013, Walmart has realized a 3-year compound annual growth rate (CAGR) of -13.9% to Amazon’s +15.2%.” Walmart was the last great retail disruptor — having disrupted local retail — but eCommerce, and especially Amazon, have hurt their retail business.

The question is: can you get a piece of Amazon’s pie? Or, if you choose not to participate on Amazon, what part of the pie is left?

Less than 15% of retail is eCommerce driven still, so the pie will inevitably continue to grow, especially as younger generations grow up with eCommerce as their default shopping method.

By the end of 2018, according to Bloomberg’s analysis, Wall Street expects Amazon’s net earnings (profits) be be more than three times those in 2016. To be fair, plenty of that expected growth is beyond eCommerce alone; Amazon is eating more than just eCommerce. For Amazon, it all feeds back to the same hungry giant.

As eCommerce as a whole grows, Amazon is expected to take up at least half of that growth — compared to just under 40% today. So the pie is getting bigger, but the non-Amazon slice is proportionately getting smaller.

Globally, others are growing even faster than Amazon

Amazingly, other companies are growing even faster, and are by some types of measurements larger than Amazon.

Alibaba and JD.com are the two largest retailers in China — the world’s largest market — online or by land. And the uptake for eCommerce is faster than in the US. Again, from Mary Meeker’s Internet Trends:

eCommerce growth in China compared to the US

eCommerce growth in China compared to the US

JD.com and Alibaba both deliver goods all over China, just like Amazon in the US. Alibaba is well known for their international wholesale business; in fact, a lot of wholesale items from Alibaba are refitted for US consumers and sold on Amazon (and other locations).

By gross merchandise value (GMV), Alibaba is larger than Amazon. But Amazon makes more money, as Alibaba only makes fees and commissions from third party sales, whereas Amazon sells plenty of stuff themselves direct to consumers. Still, GMV is the key indicator for the size of the growing eCommerce marketshare.

China and pretty much every other country are growing rapidly, and in plenty of cases, faster, than the US. Therefore, the trends described thus far are not unique to the US, and if anything, there is untapped opportunity for US sellers in international markets.

Similarly, international companies are perhaps the most likely candidates to provide the level of  competition required to challenge Amazon in the US. It will be harder, I think, for a new US online retailer to take aim at Amazon than it would be for an established international retailer. See Jet, for example.

Amazon will continue to integrate into your life

“Alexa, volume 2!”

That’s what my Dad said last time I was at my parents house. They were pretty excited about Alexa, Amazon’s latest entry into consumer goods that make their eCommerce goods all that more accessible.

You can switch the lights, control music, and all the other fun stuff the internet of things (IOT) promises with Alexa.

You can also shop on Amazon, of course.

Amazon has made huge early gains with Alexa, with a skyrocketing ecosystem of apps and other features — along with a very low price — to entice more than 11 million people to put Echo devices in their homes.

Ben Thompson explains exactly why that is so impactful on eCommerce:

Amazon, meanwhile, doesn’t need to make a dime on Alexa, at least not directly: the vast majority of purchases are initiated at home; today that may mean creating a shopping list, but in the future it will mean ordering things for delivery, and for Prime customers the future is already here. Alexa just makes it that much easier, furthering Amazon’s goal of being the logistics provider — and tax collector — for basically everyone and everything.

Millions of people can just yell at Alexa that they need more toilet paper, and she automatically buys it and ships it to them. That’s great, if you’re selling Alexa’s favorite toilet paper. It’s a little less great if you’re not. And you’re not.

For books, it was the Kindle. For other goods, it’s the Echo, and who knows what else it will be.

Amazon is an enormous company, with hundreds of sprawling departments, an infamous culture with high performance expectations for its employees.

And if you’re getting going in the eCommerce world, you must acknowledge its presence.

Where does your eCommerce business fit in with Amazon?

As Amazon grows, and their slice of the total pie gets bigger, it will continue to challenge alternative eCommerce models. Sellers can continue to do battle with Amazon, attempt to go a different route completely and stay away, or somewhere in-between.

So what options do you have?

Meet consumer expectations set by Amazon

When half of households are familiar with Amazon, then Amazon is setting the buyer’s expectations for how eCommerce should work.

If you bypass Amazon completely, then your platform will need to deliver in the following ways:

  • Is shipping free (or at least cheap for more exclusive items)?
  • Is shipping fast, with detailed tracking?
  • Does your return policy always give the buyer the benefit of the doubt?
  • Is the price competitive to quick online price checks?
  • Do you have loyalty mechanisms in place?
  • Are product reviews easy to find?

Sell something Amazon doesn’t, or can’t sell

If you can sell something Amazon doesn’t sell, you have a market opportunity. However, if it could sell on Amazon but doesn’t currently, you may need to reanalyze the market, or realize that your item may end up on Amazon and hurt your sales down the road; and you might want to beat them to that opportunity.

You may sell personalized items, proprietary items, manufacture-on-demand or one-of-a-kind items, or other types of products that make Amazon or other marketplaces a difficult option for selling.

In this case, you may be able avoid Amazon altogether.

Be human

Another thing Amazon will always struggle with is the personal touch of humanity.

From your product’s creation, to the website design, to your product copy, to your customer service: focus on the fact that you are a human being, selling to another human being.

As personal as an Amazon seller may try to be, it will never carry the same human touch that a unique store on your own domain will. Embrace this advantage and make sure the person shopping at your store and buying from you knows that they are doing so.

I equate this boutique feeling to what it’s like shopping at a locally owned brick and mortar store versus at a big box retailer. It just feels better.

It’s even better and more effective if what you are selling is designed and/or made by you and your team. If you are fully responsible for your product, you must take advantage and showcase it on your store.

Sell something personal, on subscription

Amazon is already on this track, but whether for food, alcohol, fashion, or beard products — subscription sales are booming.

Dollar Shave Club for this or Blue Apron for that are popping up for literally everything. This market is getting more crowded, but that doesn’t mean it can’t still be a good opportunity, especially depending on what kind of sales numbers your business requires; a one-person business is easier to sustain than a ten-person business, or a five-hundred-person business.

I recently heard of a wine service that not only sends subscription wine, but it evolves the subscription over time based on your feedback for taste. A differentiated model like this — where I realize the service will be better at picking wine I will like than I am by choosing labels I like in the store — is a great opportunity.

Let Amazon do what they are best at

You won’t compete with Amazon’s fulfillment’s reliability and speed. You just won’t.

However, even if you don’t want to sell on Amazon, Fulfillment by Amazon (FBA) is now available for your own eCommerce store. That means you can ship inventory to Amazon, integrate your online store, and when you make a sale, Amazon can fulfill the order — just like they do with Prime orders. It comes at a cost, but it can solve some headaches.

Sell on Amazon and on your own store

There are many risks for selling just on Amazon. Primarily, you are in their world, and they can kick you out of it.

There are many stories of sellers who are permanently banned due to a few pieces of bad feedback from buyers, or even very innocent things like a consumer blaming a store owner for counterfeit goods when it wasn’t even that store owner’s inventory (one of the quirks that must be learned if you decide to sell on Amazon).

It’s always a good idea to maintain your own storefront and brand, even if 98% of your business is on Amazon. There are several ways to do this and keep things in sync, and most of the software you can use for your store enable it. We’ll get into such topics in future posts.

Find a smaller marketplace and own it

Despite my pronouncements of Amazon’s dominance, there are other marketplaces, and some of them are amazing! Etsy, for instance, has proven to be incredibly successful for tens of thousands of store owners.

You can focus on an alternative marketplace and do very well. There are other marketplaces than Etsy, but that’s a great example, and there is a ton of strategy to consider in such marketplaces as well. Just the other day, I bought an obscure but in-demand product I couldn’t find anywhere else, from a shop on Etsy. It screamed opportunity to me, but it’s probably also serving that Etsy store owner very well.

Go hybrid: embrace Amazon, and anywhere else that will take your product

When Amazon is so big, it can be silly to not embrace it. However, there are plenty of challenges to consider, and you need to make sure you know what you’re getting into. For instance, just the inventory implications for shipping your items through Amazon’s FBA program could leave you liable to various state’s tax requirements.

However, if you want to sell, you shouldn’t be afraid to sell where the customers are. That means your own site. It means Amazon. And it means places I haven’t even mentioned yet, like directly on Facebook! Social channels are also a skyrocketing marketplace.

In the end, the goal of someone selling stuff is to…. well, sell stuff! You want to do everything within your power — and your bandwidth — to enable that, wherever that may be.

The opportunities are massive

The opportunities for selling online are massive. But we must know the elephant in the room; and the elephant is Amazon!

Amazon can be an incredible tool for an eCommerce store owner. It can also be a massive risk. The key is to understand it, and know how to either work with it or around it.

It seems appropriate to begin Commerce Notebook talking about Amazon, because Amazon will likely affect nearly every decision an eCommerce store owner makes from here on out for the next decade or more.

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The post eCommerce in the age of Amazon appeared first on Commerce Notebook.

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sillygwailo
23 days ago
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Toronto, ON
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