More Fire Phones, Less Fyre Fests

Jeff Bezos notoriously launched the Fire Phone around 2014 to much attention – I think most agree that it was a spectacular failure. But was it really? This project was a $170M write-off for the company. There was the hardware, software, and marketing costs. Not to mention the person toll on the people. I bit my tongue during this time and waited to hear straight from the company. It turns out that Bezos had another view entirely.

“If you think that’s a big failure, we’re working on much bigger failures right now. And I am not kidding. And some of them are going to make the Fire Phone look like a tiny little blip,” Bezos said
Amazon finally stops selling the Fire Phone, as company adjusts its  hardware strategy - GeekWire
Fire Phone

Wow. The mentality of recognizing this as a failure, and also setting the world up for the failures to come is remarkable. This kind of progress is something I have been thinking about since this occurred. It is not every day that you get to witness one of the most successful companies in the world stumble, but also share more about these types future “failures” which empowers the team.

Much has been written about the Fire Phone debacle, and the intricacies and nuances of what happened truly may never be known. However it is now very clear that it was way ahead of its time. Near field communication for payments and easier comms? Facial awareness and recognition? A feature that can recognize objects instantly (firefly)? Sounds familiar… I think each and every one of the Fire Phone features will find its way to the public or business units some time in the next 5 years. Finally, Something like 10,000 people now work on the Amazon Alexa and Echo and this was from 2018. This means that even more people work on this hardware today.

So what does all this have to do with doing more of these R&D moves vs. the Fyre Festival? If you are not aware the Fyre Festival is defined as:

Fyre Festival was a failed, fraudulently-marketed luxury music festival founded by Billy McFarland, CEO of Fyre Media Inc, and rapper Ja Rule.

This was a colossal disaster of epic proportions, shared on social media for all to see. At its core the Fyre Fest was a scam that was meant to overpromise and underdeliver in the worst way. This “swing” was a broad way of trying to do something great and falling short.

Fyre Festival organizer admits "we were a little naive" after chaos at  luxury event
Fyre Fest

The idea that you can embark on a $100+ Million Dollar mission at a company and fail is daunting. One of the areas I have heard push back on my thesis here is from a founder who asked “sure the Fire Phone was wrapped up in a great lesson learned, but were the people who worked on it fired?” We may never know, but I hope the answer is not. (Fun update since starting this draft – I found out that they were not and many are still there!)

Companies that take a huge R&D swing and are willing to fail are rare. Companies like Amazon that have the bankroll to do so are even more rare. However, I think it serves future employees, shareholders, and consumers when they do so. The idea that a company becomes a monopoly tells us it is resting on its laurels. If Amazon ever stopped taking huge swings I think we should be worried.

Proportional investments that commensurate with risk and stage are key. I now implore teams to take more bets and big swings because the return compound is large. The questions I often ask:

Is this initiative a fire phone or fyre fest?

Can you take more fire phone bets?

What happens to the team that takes a big swing?

Thinking big is hard. It means embracing failure, being wrong, and having perception not match reality. It’s an impossible thing to teach (at least I haven’t found a way) but a lesson learned is to take big swings. I try to work with founders and teams that are taking a big swing in their field, or within a department of their company, and work through things whether or not they work.

Supporting your team no matter the outcome is a question of company culture. It’s hard to know ahead of time how a startup will handle one of these moments, but I try to encourage more Fire Phones, and less Fyre Fests.

Leave a Reply

Your email address will not be published. Required fields are marked *

Get in touch