This month we held a roundtable of execs from our member companies to gather inputs on Amazon’s Alexa, asking them specifically, What did Amazon do particularly well relating to the creation, marketing and distribution of Amazon Echo? ...and, Can other companies easily replicate this success, or is there something unique about Amazon's position that has brought them this success?
Goran Kukic, VP Digital Services, North America, Nestle
What did Amazon do well? Instead of going for the niche market, Amazon was the first to do it ‘just-right’ in packaging a number of different value propositions to make this purchase compelling for the consumer. Always listening device with an amazing speaker that delivers news, traffic, music, etc. but also facilitating shopping lists, cooking timers found a way in living rooms and kitchens.
Can other companies easily replicate this success? There’s no doubt that many companies will try to follow (opening of Siri SDK, Google Home) and will probably ‘technically’ be the same and better, but will be difficult to replicate paring with Amazon Prime service and compete with Amazon e-Commerce model.
Jenny Fielding, Managing Director, Techstars
What did Amazon do well? This is the first time we’ve seen voice technology working to make consumers’ lives better (voice assistants have not broken into the home automation space before and voice recognition phone prompts have left many of us scarred!). For the consumer, it's a small price to pay for a glimpse of the future bridging the gap between what consumer technology does today and what science fiction and movies have depicted of the future. And leave it to Amazon to make it affordable, simple and human using sophisticated speech recognition and natural language processing in the backend that makes Alexa feel like a family member.
Can other companies easily replicate this success? Other companies can easily replicate the technology (and we are seeing loads of start-ups entering this space), however, distribution is where Amazon is miles ahead. Marketing and distributing is the hardest part of IoT so the fact that they are grabbing market share now will keep them ahead for a while.
Jim Hunter, Chief Scientist & Technology Evangelist, Greenwave Systems
What did Amazon do well? There’s no doubt that Amazon created a magical product with Echo/Alexa. They did a wonderful job identifying what the industry needed, and what it did not need. It did not need another hub, another standard, another cost, or another new complicated technology to learn. What it did need, was a voice. While it is the best selling smart home device of all time, it is not a smart home device -- it does not control lights, thermostats, or any other smart device. It does however, enable a simple way for makers of these things to consistently put their products within the range of their owner's voice. The team did a wonderful job positioning the Alexa in the developer community. As a creator of an Alexa skill, I respect the ease of implementation of their developer kit. Within just a few weeks, we built a fully interactive Alexa interaction, YouTube videos of which can be found here. They marketed the product very well, and the upsell to Dot was brilliant. Limiting the product's availability by requiring users to use their Echo to order a Dot was inspired.
Can other companies easily replicate this success? When Google announced their Speech API, I wrote this article on VentureBeat to share my views. As it stands today, Alexa has risks of relevance based on it's relatively limited knowledge base, as opposed to a company in possession of tomes of information like a search engine. It also has been built around a voice app model, which could be challenging to scale into a person’s life if they have to know keywords to "launch the app" and start a given conversation topic. Google, Baidu, Yahoo and Bing are extremely well informed (in that order), especially when compared to Amazon. Amazon does have other things going for it with AWS ties to vendors, the massive marketplace through which to sell many of the things in our lives, and provision them into our lives at point of purchase, but they have yet to fully take advantage of either of these.
Steve Svajian, CEO / Co-Founder, Anova Culinary
What did Amazon do well? Amazon Echo is interesting because our interaction with technology changes as it begins to drop into background, while still being a device we engage with regularly. By using speech, Echo is moving us away from the screen, and creating a more natural user experience. In creating Echo, Amazon saw the need for a device that wouldn’t require its users to have their phone on them at all times. Amazon did particularly well marketing Amazon as a companion in the kitchen, because when we're busy preparing food and our hands aren't free, it enables us to have access to information much more easily.
Can other companies easily replicate this success? Aside from Amazon, Google and Apple can easily replicate the success of Echo. Amazon, Google, and Apple all have the unique ability to create an ecosystem of products that connect to a hub that operates like Echo.
Jean-Pierre (JP) Abello, Director, Global Engineering R&D for IoT, Nielsen
What did Amazon do well? Amazon did a particularly good job with the quality of voice recognition in noisy environments, and the simplicity of use of the device. With Alexa, voice has finally become good enough to become the primary user interface instead of touch screens, buttons, etc.
Can other companies easily replicate this success? I think this success could be easily replicated and even exceeded by the likes of Google and Apple. These companies have the advantage of potentially achieving much deeper integrations with search and other products they fully control. Amazon initially believed that the Echo would lead customers to more impulse buying on their web store, but what happened instead is the Echo became a better and more convenient way for people to interface with a host of other services, from music to weather forecasts, home automation control, etc. Amazon had the courage to innovate in this category and got the first mover advantage, however others have the potential to do even better via deeper integrations into their core consumer products.
Linda Bernardi, Founder / CEO, StraTerra Partners
What did Amazon do well? In the creation of Alexa and Echo, Amazon focused on ease of use and integration. That enabled rapid and seamless integration by any level of user and removal of complexity from the process. It was a gradual release, spread by word of mouth vs. releasing it all at once with a huge bang, so we started seeing Echo and Alexa gradually which created market excitement. I actually think it was too quiet of an introduction in that if you weren’t following Amazon-specific news, going to conferences or related events, there seemed to not be a high level of marketing effort the way Apple or Microsoft would do. The key was user experience which was much more organic from my lens. This is in line with how Amazon develops products and services: Develop it to perfection, enhance the user experience and people will come. Not market it first and develop later! It worked.
Can other companies easily replicate this success? Amazon’s key to success is to hype less, develop more and build things perfectly and flawlessly. While there have been a few products pulled off the market, almost 99% are perfect. Prime is revolutionizing the consumer experience and spreading to grocery shopping, food delivery, care services, etc. and the key to its success has been to make sure it works perfectly. Other companies can replicate this but with high degrees of difficulty as it means a higher investment -- Amazon is lean and highly efficient and its agility and speed is extremely difficult to replicate, while other organizations are generally fat and inefficient. What is difficult to replicate is the company’s culture: A relentless pursuit of doing complex things and expecting a lot from themselves, from from leadership to all levels and they have to perform constantly. Many are trying to emulate Amazon, but it would be somewhat difficult unless their organizations also changed massively.
Ram Malasani, Founder, CEO, Securifi
What did Amazon do well? The general consensus in 2014 was that Echo is an interesting but ultimately goofy product. But it’s now being labeled as the next revolutionary interface. There are a few reasons - initial low expectations, far-field voice recognition that actually works, and aggressively building the growing Alexa skills ecosystem through third parties.
Can other companies easily replicate this success? It’s not going to be easy but I would bet on Google. The contender has to have mastery of several technologies including voice recognition, search and not to mention generating developer interest. All of this is right up Google's alley. Google Home might also have a hardware cost advantage as its built off their low cost Chromecast platform. And lastly Home also comes with wireless multi-room audio, like Sonos speakers, which gives it an edge over Echo speakers.