In Shakespeare’s Twelfth Night, Duke Orsino delivered one of the most memorable lines in the book when he said “If music be the food of love, play on”. Shakespeare did not stop there: in a scene in Hamlet, when Lord Polonius asked Hamlet “What do you read, my lord?”; Hamlet responded “Words, words, words”.
As I read Amazon Jeff Bezos’ annual letter to Amazon shareholders, those great works of Shakespeare came back. I had read Twelfth Night and Hamlet in secondary school. With due respect to Warren Buffet, Jeff Bezos is now the zen-master and the oracle of business excellence and value creation. Yes, in business today, entrepreneurs and business leaders fiercely wait for Amazon’s shareholder letters.
In these letters, you can read the mind of Jeff. For him, the music of business is CUSTOMER. To serve that customer with the fanatical commitment he has demonstrated in Amazon, he reads one thing: Data, Data, Data. As he plans to link Whole Foods, a grocery chain Amazon recently acquired, with Amazon Prime benefits, he is using customer data to make them better. Contrast that with aggregators like Facebook that sell customer data as part of their business models. I have written on the One Oasis Amazon strategy.
The fact is this: people want to share data and Amazon Prime members are sharing a lot to Amazon. Because Amazon is using the data to make their lives better [over selling them to 3rd parties as Facebook does] no one is complaining. Fortune makes a similar point on how Netflix uses customer data to improve their experiences.
The beauty of this, as Aaron reported yesterday and Breakingviews analyzed, is how Netflix uses customer data. It collects a lot of it, for sure. But it doesn’t turn around and share any of it, as the formerly uninformed now understand Facebook does. Instead Netflix crunches the consumer data it holds to aid its recommendation engines and to decide what additional programs to commission. Netflix doesn’t want to share that data with anyone else. It sells no advertising and releases no ratings. It cares about finding an audience for its show, though. Not for nothing, Netflix is a lavish marketer, spending heavily on advertising across digital, print, and broadcast media.
Sure, Netflix charges customers. Amazon does the same. But Facebook does not ask people to pay. Largely, without monetizing customer data, it has no business. That is at the heart of the aggregation construct. Yet, there is a big lesson: customers do not revolt for using their data. They revolt when you use the data to make money and they do not materially connect how that benefits them [we easily forget that Facebook is free because of the data].
But irrespective, you need to read the data to have a great music in business; customers enable masterpiece.