Survival In The Cloud Depends On Experimentation
I was fascinated to hear Jeff Bezos comment that Amazon’s expected $1.5 billion in revenue via their Amazon Web services business was successful due their focus on experimentation. The experimentation paradigm is the most important strategy for cloud executives to execute successfully, lest they fail to take full advantage of the monumental opportunity the cloud is offering.
Our brains are actively involved in mental experiments almost continuously. We’re always speculating about what comes next and what our response will be. However, the experimental process Bezos is referring to is something much more formal and takes a lot more effort. Focusing on this more formal level of experimentation requires a commitment to the experimental process.
Executing Experimental Concepts For Success
An experiment involves assumptions, exercises, and measurement. With regard to assumptions, it is critical to start with the right statements or questions. By asking concrete questions specific to your task, you will be guided to the specific answers you’re looking for. The key here’s to avoid interesting but distracting rabbit trails. An example of a concrete question could be: If we hire a writer to write sales copy and sales increase 20% percent, what will our return on investment (ROI) be?
The next step is to develop exercises or assumptions. That way you will know what to measure in step three to determine whether or not the experiment was successful.
- Hypothesis #1: if we invest $1000 for a writer and sales go up 20%, we will have gained an ROI of 30%
- Hypothesis #2: if we invest $1000 for a writer and sales go up 10%, we will have gained an ROI of 15%
- Hypothesis #3: if we invest $1000 for a writer and sales do not go up we will have a loss of $1000.
- Result #1: when we invested $1000 for a writer and sales grew 20%, should we assign more work to this writer?
- Result #2: we invested $1000 for a writer and sales grew 10%, what can we do next time to get sales up to the targeted 20% increase? (Hire a different writer?)
- Result #3: we invested $1000 for a writer and sales did not go up and we lost thousand dollars, what’s other strategies can we experiment with to get sales up to the targeted 20% increase?
Before you write off the oversimplification of the above example, consider how many of us actually put pen to paper at the various stages described above?
By writing through the research process we are better able to strategize and track results. Many believe they can wing it by simply thinking about it. However, memory is not as accurate as we would like it to be. Life’s daily distractions cloud an unwritten experiment while a written one holds us accountable to the success we seek.
Most of us will not achieve $1.5 billion in revenue. But we can increase our business year after year by disciplining ourselves to take experimentation to a new level.
By Donald Cleveland
- The Future Decision Makers In The Cloud - December 10, 2012
- Survival In The Cloud Depends On Experimentation - December 5, 2012
- Solving Problems On The Cloud Part 3: Overcoming Unhealthy Fixations - November 30, 2012
- Overcoming Denial In The Cloud - November 21, 2012
- Solving Problems On The Cloud Part 2: PaaS Adoption Rates Lag Behind SaaS, Again - November 20, 2012