Ask HN: What happened when Amazon moved into your business?

https://news.ycombinator.com/item?id=16477752

by boldslogan • 8 years ago

243 80 8 years ago

news.ycombinator.com

Without going too much into my own product. I have recently found out after watching the AWS conference that I am now directly competing against an Amazon product... I am looking for stories of how your company reacted and maybe the successes or failures...

jedberg• 8 years ago

Every company I know of that this happened to, and I know of at least five personally and others via 2nd hand, disappeared within six months.

One of them went on to start a new company and was acquired by Facebook for a whole lot of money.

But overall the outlook isn't great, and here's why. Amazon is great at the "80% solution". If you're already in AWS, and they have something that does most of what you want, it's way easier to use that than try and integrate with someone else.

So if what you're doing is only in AWS and isn't significantly better than what they offer, the news isn't good.

I'm sorry this happened to you. :(

scarface743• 8 years ago

It's the old "No one ever got fired for buying IBM". Why would I choose a slightly better product from an unknown company? If it was the wrong decision it calls my competence into question. If I choose AWS and it was the wrong solution, no one will bat an eye because they would have made the same choice.

akinjide4• 8 years ago

You'd have to weigh or SWOT your decision, using a better product from an unknown company that might offer more or from a trusted company (AWS) that offers less. Especially if, the unknown company is offering something the trusted company isn't

lev992• 8 years ago

I don't think it's just that.

I have complete freedom to use any cloud solution in my organization, but I almost always choose AWS. Mostly it's a seal of basic quality. I know it had documentation, I know it has uptime, and I know it has packages for any environment I want to use it in.

I've had mixed experiences with less established SaaS, and mixed experiences means more dev time on average.

avar• 8 years ago

I work for Booking.com. Amazon entered the hotel reservation business in early 2015 with Amazon Destinations, and then inexplicably shut it down a few months later[1].

At the time there was the expectation that they'd drop commissions to the floor and compete on ultra-thin margins, and there's certainly a lot of room for that in the travel industry.

But they didn't, and then just left within a few months. Weird.

1. https://techcrunch.com/2015/10/14/amazon-shuts-down-its-hote...

akinjide4• 8 years ago

Pretty sure they did a lot of market research before calling shutting down, most companies make decisions that's align with their goal/aim.

rapfaria• 8 years ago

But what about the research before creating Amazon Destinations?

onychomys• 8 years ago

Plenty of famous ones also don't, as evidenced by google's umpteen different messaging apps.

EpicEng• 8 years ago

So you're thought is that the market research they had three months prior to shutting down was significantly different than what they had three months later? I'm pretty sure you're not pretty sure of anything here.

Sholmesy• 8 years ago

Similar situation with Amazon Tickets, they threw money at it, then abruptly stopped. I imagine they do this a lot in a lot of industries to see what sticks.

StudentStuff• 8 years ago

Don't forget about Amazon Local Register, a common theme among all these failed and summarily canned offerings is Amazon was going up against an industry where the core business was relationship based between vendors and venues/businesses, with small margins after everything is said and done.

Amazon seems not to want to eat its lunch forever outside its artificial book subsidies. If a product isn't net positive within 2 years, its off to the chopping block.

aspir2• 8 years ago

I work for an competitor to an AWS product. We've grown rapidly over the past ~7 years in a generally competitive (lots of startups, some really old tough incumbent companies). Without revealing too much on our end, here's some lessons learned:

* AWS is bad at customer service, even for their large or premium customers. If you position yourself, and _seriously_ invest in making your company's culture rooted in exceptional customer service, that's a foothold.

* Don't compete on price. This is hard for most tech startups, as pricing is a very difficult thing to do properly, but resist the urge to drop price to compete. You'll never have the scale, the supply chain masterminds, or the financial modeling to compete with AWS on price, so position yourself as a premium or luxury offering and don't be afraid to price accordingly. If you do the first step properly (a deeply rooted culture of service) you'll be able to justify the price.

* AWS has great uptime, but often the actual operating performance of their service isn't that great, especially when you push the products beyond the 80% use case. They know that for the majority of their customer base, best-in-class performance isn't actually business critical (despite how flashy it sounds). However, there is absolutely a market for people who truly need best in class performance, or product flexibility, or some other best-in-class trait (latency, interaction design, etc.). Find who these people are, and optimize for that ruthlessly. This focus, in combination with the culture of exceptional service and positioning your brand as a premium provider, puts you into a completely different market space than AWS.

philliphaydon3• 8 years ago

Really? I’ve had better customer experience with AWS than Azure or GCE... Even their SDK devs are responsive, I raised a bug for the SDK for their queues and went to bed, woke up and they had published a new SDK with the fix after 7 hours of raising the ticket...

There is a lot to dislike about AWS but from my experience customer server isn’t one of them...

electricEmu• 8 years ago

What was your experience like on Azure and GCE?

Azure had me on the phone within minutes of filing critical issues. Their engineering department provided updates all night.

Amazon issue resolution could be summarized as "won't fix" or "someday/maybe". Their API inconsistencies might be considered a poor developer experience [0].

It's great you like AWS. I do too for some use cases! I disagree their customer service is "better" though.

[0] http://apievangelist.com/2017/01/05/what-i-learned-crafting-...

aspir2• 8 years ago

I dunno, that sounds pretty good honestly. The only info I have on AWS's service is testimonials, so I don't have anything concrete.

The industry we obsessively study/studied was hospitality, where service is literally the differentiator between the "pretty good" and the "absolute best in the world," and we've been pretty meticulous about iterating and building upon our service ecosystem (it's way beyond just one team at this point) like one might do with a software product. Most of our customers, from the small ones in the early days to the huge internet juggernauts we've had the privilege to work with use us as the standard to which all other vendors are measured, sometimes quite literally in a very odd way. So, I don't know if we got lucky with some stinker incumbents, or we stumbled on to something completely different, but we've got a good system in place that's built a pretty solid competitive moat.

I guess if folks on the thread are still reading and interested in replicating this at their startups, my advice is: study elite hospitality and restaurants, not tech. I'm very rarely impressed with the service ecosystem in the tech world, though it happens, but I can learn something massive every day from hospitality.

superasn• 8 years ago

True their support has been quite helpful and pretty amazing. A dev reached out to me days after the issue was resolved for feedback and advice, and it wasn't a cookie cutter template. He actually wrote a 300 word letter to me, including asking for my feedback on a new feature they were working on.

I couldn't believe a company as big as AWS would seek out opinion of some guy just posting on their forum.

oliwarner• 8 years ago

better customer experience with AWS than Azure or GCE

Yeah, they're all awful. A comparison might show one is better than another, but it's all a wash when you look at actually good customer service.

A good host has a phone number, you ring it, somebody answers and then they fix your problem, without pinging you around a call centre. You're in and out within 20 minutes.

For AWS (and their class) you submit a ticket and in 4-48 hours, you twiddle your thumbs while the cheapest labour available to Amazon wakes up on the other side of the planet to investigate your problem (also known as walking you through a script).

AWS-sized hosts have advantages but I put a lot of weight in scaling things back to the RackSpace, Linode and Hetzner size operations. They put so much more effort into their human interaction.

wgerard• 8 years ago

Somewhat of a counterpoint, though with a huge caveat because I was just a grunt:

I used to work at Etsy, and Amazon launched a competing product in 2015. Cue the frenzy about Etsy's imminent doom. Hasn't happened yet.

Etsy's gone through troubles, obviously, but while I was there at least the general feeling/consensus was that Shopify is by far a bigger threat than Amazon. It's incredibly unclear, at best, whether Amazon has siphoned off any appreciable part of Etsy's market.

Different products and spaces, obviously, but just a reminder that Amazon doesn't get it right 100% of the time (see also: fire phone).

Also worth noting that SES hasn't put Mailgun/etc. out of business completely (though that's a bit of a stretch of a comparison, I'll admit).

detaro• 8 years ago

Etsy's biggest threat seems to be themselves really (which pushes people to things like Shopify).

Also not surprised that Amazon hasn't made much of a dent for them: Amazon site isn't all that good for actual browsing and tries to diminish seller identity.

orliesaurus• 8 years ago

I wasnt the owner of the business but I worked for an "email infrastructure" company (think Sendgrid but not US based). When amazon launched its SES offer, things started to get pretty grim.

- Their infrastructure was better (stable)

- Their price was much, much lower (pricing)

- They are Amazon and they're global. (company image & trustworthiness)

Going to meetups and developer conferences people would always ask "why not use SES haha it's a no brainer" Pricing yourself in between Mailchimp and SES was a good fight and ultimately it did help convert a lot of "Mailchimp" affectionados.

Luckily getting emails delivered in the inbox of your customers is a bit like dark-magic - there are a lot of factors that a regular joe wouldn't consider, and because email marketing is still one of the best channels with the highest ROI ever - companies really care about setting up their email campaigns with companies that know all of the tricks and rules to optimize campaigns and ensure maximum open and ctr rates. Another thing: Data protection laws in US and EU are different, the company had the advantage of having datacenters exclusively for EU customers (where more rigid rules were applied) and then all the others...

The business focused on creating frictionless experience with stellar customer support (24/7) and also worked a lot on its dev-first marketing approach (im talking about developer experience, plugins, wrappers, integrations etc). One of the advantages of owning your own infrastructure and whole stack is that you can build and configure your product to fit every client's need. Something that Amazon has never managed to deliver out of the box - especially because email is a tool used by developers and marketers at the same time. It's really hard to make marketers happy!

The business is still around today, I learned a lot but I ultimately moved on because like I told my friends "email isn't sexy" Email is painful, email is great.

albertgoeswoof• 8 years ago

This is a great example of excellent product strategy, these are all points AWS are unlikely to compete on. Great to hear that they’re still in business

neom• 8 years ago

I worked as a strategy guy in the same space as AWS. In my opinion, you don't. You look at what they are doing in the market, and you decide how you fit in around them, there is typically a pretty decent business there, AWS is a great for wake building, developer first is key. :)

gk1• 8 years ago

I consult or have consulted multiple tech startups that suddenly found themselves competing against an AWS service like CloudWatch, Glue, Sagemaker, and so on.

In every one of those cases, nothing bad happened. Here's why:

- These AWS products are more like single-purpose utilities than complete solutions. They cover just the basic use cases. If your competing product is also single-purpose then yes, you should be worried. But if you're selling a platform, suite, or an enterprise product (like the companies I work with), then you're probably fine.

- These products are meant to plug into a developer's workflow, like one piece of a larger puzzle. That means requiring technical expertise. If your product is used by both practitioners and managers then you're fine.

- AWS tools are for AWS users. Does your product support Google Cloud and/or Azure?

- AWS products are provided "as is." Most users will have little to no input into the product roadmap and have little hope for getting their feature requests fulfilled. As a (presumably) smaller company, your agility and ability to implement customer feedback is an advantage.

There's more to say on this but the tl;dr is don't worry. For every utility product AWS offers, there are dozens of alternative solutions that are thriving.

Edit to clarify my statement and to reconcile with the other stories where companies were pushed out of the market by AWS: If you're selling infrastructure such as email servers, data storage of any kind, etc, then yes you should be worried if AWS moves in. Doesn't mean AWS will win by default (see: Snowflake vs Redshift), but the amount of resources Amazon puts behind those things is significantly greater than their add-on solutions. With that said, even a company the size of Amazon can't grab an entire market immediately; there's plenty of business to be won by both sides if you play things right... That's what makes it fun!

user59944612• 8 years ago

To support your argument, cloudwatch is not a product.

It's just a bunch of API to retrieve AWS metrics. It is integrated into third party products that do amazing things with it and other sources.

drspacemonkey• 8 years ago

I've never been hit by it personally, but I know two people from different companies that found themselves in the same situation.

The first went through the stages of grief, and "acceptance" meant shutting down. The second company had the option to pivot and focus on a specific feature that AWS lacked, but the company decided against that plan. According to my friend over there, management is still in denial over the severity of the threat. He's looking for other work, and so are most of his co-workers.

Unfortunately, this is not good news. On the plus side, you're cognisant of what you're facing, which means you can start looking for ways to pivot. Failing that, you can decide to bail before things become critical.

I'm really sorry to hear you're in this situation. For what it's worth, you're in good company.

tlb• 8 years ago

It's a different business, but Instacart recently had to deal with Amazon offering home grocery delivery. According to [0] it's working out because every other grocery chain realized they needed same-day home delivery in order to not get killed by Amazon, and they mostly went with Instacart.

By analogy, your strategy could be to provide the service for every other cloud provider. They watched the AWS conference too, and don't want to be left behind on any features.

[0] https://www.forbes.com/sites/bizcarson/2017/11/08/amazon-who...

biasforaction• 8 years ago

I have mixed feelings when reading these stories. I believe that a lot of competition and innovation is needed in our industry and whenever I see a service throw in the towel because of AWS, I cant help but feel that my future is threatened.

From my perspective, it's the smaller companies that pose the biggest threat to AWS/Amazon because they are able to satisfy their customer's needs far better and faster.

tjr225• 8 years ago

I remember in the first decade of this century and everyone was afraid of Wal Mart killing small business (and in some ways it did)- but now look at Wal-Mart...

I don't like Amazon on a philosophical basis- the same reason I don't like Wal-Mart, and Amazon is just the Wal-Mart of everything. Hopefully someone comes to their senses and breaks up companies who are able to use profits from various subsidiaries to undercut competitors in others.

shakkhar• 8 years ago

Don't despair. Despite common perception, most AWS products are half-baked and clunky. (I don't have much experience with other Amazon products.) A while ago when GCP appeared in the scene, the team I was in performed a series of tests to evaluate it. In all our tests, GCP came out ahead of AWS. On top of that, their documentation and UI was better and prices were lower. That's part of how Google managed to get a foothold in the cloud services space.

AWS premium support doesn't help much when you are fighting fire because the first line support staff is clueless. It will take you days to reach a person who can actually help you.

IMHO, if you are offering a standalone product, you can always do better than Amazon (AWS). Whether you can beat them depends on variables other than the quality of your product.

qaq• 8 years ago

I worked for a company that was in 50K/ month spend in AWS there is basically 0 service. Now I work for a company with serious monthly spend in millions we pretty much can get access to competent eng. immediately.

user59944612• 8 years ago

And the worst of both world. Work for a company that spent tens of millions on their own datacenters only to get neither half of the services nor half the quality.

eropple5• 8 years ago

It's all about who your TAM is. A good TAM will have your back from the jump. A bad one...not so much.

sofaofthedamned• 8 years ago

Small things about AWS suggest it's a load of different products held together by duct tape.

Case in point - I was fixing an issue today, so had iam/s3/ec2 open. They have different favicons. I had the situation we all know where I had 40 different tabs open whilst trying to work out what was going on, thought I didn't have an AWS tab so opened another one purely because the iam favicon is completely different to the rest.

I know it sounds silly, but it is indicative of the entire thing - their ECR doesn't support going back in the browser for one. I'd run to GCloud, but unfortunately the company i'm contracting at won't move.

afarrell• 8 years ago

because the iam favicon is completely different to the rest

I can easily imagine this being a deliberate decision to make it easier for someone who uses AWS a lot to click the right tab when they have 40 tabs open.

I agree with the point that GCP feels like it has better docs and API than AWS.

matte_black• 8 years ago

There’s really only one AWS product you wouldn’t want to compete with, and that’s EC2 (and possibly S3). Mostly every other AWS product you can build a better or more niche alternative at a higher price point and still get business.

thsowers• 8 years ago

I admittedly haven't looked into this as in depth as I would like to, but I recall being surprised by Digital Ocean's "Droplets" (similar to Amazon EC2) being far cheaper[0]

[0] https://www.digitalocean.com/pricing/

eropple5• 8 years ago

DigitalOcean is not comparable to EC2 unless you are literally-literally only using compute. The second you want a network that is private to you or any sort of hosted solutions for stuff like SQL databases, DigitalOcean folds.

I use AWS despite the (moderate, and with reserved instances largely nonexistent) premium on compute because of everything else that's right there.

paladin314159• 8 years ago

AWS launched mobile analytics a few years back: https://aws.amazon.com/mobileanalytics/. I've literally never heard of a customer even considering it, despite the fact that their free tier could accommodate 99% of companies. If you're not selling a commodity, don't be too worried unless AWS considers it a core part of their strategy.

technotarek• 8 years ago

This question could be much wider in scope than AWS, so I'm surprised we don't have a wider variety of responses that touch upon everyday B2C ... bookstores (vs the original Amazon), shoe stores (vs zappos), home services (vs Amazon's task rabbit like service) etc. (Yes, I know this is hackernews!)

For my contribution, we're working on something where we expect AMZN to go far deeper into in the not so distant future: furniture. We're "safe" now because AMZN doesn't let you touch, feel and smell their offerings. That clearly could change if they continue to expand their physical retail footprint.

AMZN's impact on us: TBD. We think they may disappoint a lot of consumers. We focus on vintage and artisan furniture to cater to those that will want more variety and character.

https://attic.city

imhoguy• 8 years ago

AMZN in IKEA space, that would be an interesting battle.

jdennaho• 8 years ago

If you stay on your toes and keep growing they will buy you. Then they will slowly chip away at it until they can delete it and replace it. CreateSpace vs KindleDirect being a prime example.

tyingq• 8 years ago

Direct to China sales increased, without clear guidance to consumers on the resulting decrease in shipping times and actual support. I can't tell yet the market effect. That is, if end buyers like the lower prices enough to offset the lower level of support, refunds, tech support, etc.

Chinese sellers actively avoid personalized support, refunds and compensation. But they sell at much lower initial pricing. It's hard to tell, for now, what the buyers value.

throwawaycl• 8 years ago

We have a personal experience to share. Posting from a throwaway account for obvious reasons. We have a product in aws marketplace with decent traction. We have also gone jointly with aws for some big opportunities in government space. They have started thier own competing product in the same space and started sabotaging our joint opportunities with large customers. AWS marketplace is a big idea engine for them to identify profitable opportunities and copy the products ruthlessly. Our stomach twiches as they copy every one of our features including the UI.

It is unfair for startups but i guess that is business. I think dropbox moved away from them for right reasons.

Think twice before listing your products in aws marketplace. You will be thier next victim if you become profitable. AWS for startups is the biggest joke of our time.

martin-adams• 8 years ago

I've heard stories of this happening on the retail side. They monitor what products third parties are selling well, then start selling it directly themselves.

rboyd• 8 years ago

Does Amazon use tenant metrics in order to set product strategy (decide which AWS customers to attack)?

exolymph• 8 years ago

I don't have a personal story, but I wrote an article about AWS competing with its own customers a while back: https://www.inc.com/sonya-mann/aws-startups-conflict.html

...and I've heard rumors off-the-record that I wish I could share right now. It's a serious concern for anyone making devtools.

amznsurvivor2• 8 years ago

Amazon entered our business (B2B) not too long ago. Not yet in our country, but we were watching closely. They tried to go very large from the very beginning while we had started from zero 8 years ago and still are a small company.

We are still here, doing well and growing. Amazon just recently announced the shutdown of their service.

Steady yet healthy growth and happy customers won‘t let them kill you overnight.

movedx3• 8 years ago

I think you'd enjoy the book, "Small Gaints"

amznsurvivor2• 8 years ago

You are right, I think I would. Ordered it just now – not on Amazon ;)

movedx3• 8 years ago

I think most readers here would enjoy the book, "Small Giants"[0]. I also like the concept of, "1,000 True Fans"[1]. I'm aiming for both my self, personally.

[0] http://www.smallgiantsbook.com/ [1]: http://kk.org/thetechnium/1000-true-fans/

jasonkester• 8 years ago

When Amazon launched their Cloudwatch reports, I saw a definite downward trend in S3stat signups, and even lost several customers since their thing duplicated most of my functionality at the time.

It took a couple years to recover. Mostly through improving my product, but also from people realizing that Cloudwatch is kinda a pain to use and doesn't give the best reports.

Better still, Amazon never iterates on things, so their product today is the same one they introduced half a dozen years ago.

S3stat is doing better than ever today.

tuananh• 8 years ago

im getting NET::ERR_CERT_AUTHORITY_INVALID

NET::ERR_CERT_AUTHORITY_INVALID Subject: www.s3stat.com

buremba• 8 years ago

We have a product in analytics space and our target customer audience was companies that want to develop an analytics solution on top of AWS. We're not actually a direct competitor to AWS but it turns out to be that way.

At first, we thought that it's a win-win-win situation for AWS, AWS customers to use our product and us because I know a lot of AWS customers who try to build in-house solution on AWS and then switched to either third-party solution or another cloud provider since they couldn't design the right system for high data volume on AWS. It's mainly because data engineers are one of the most expensive engineers and there're not enough sophisticated data engineers in the market. We provided (this was the promise) the right (scalable, cheap enough and flexible) solution from day 1 so that they don't have to build a data engineering team.

It didn't work because AWS advertises its products as dead-easy to maintain and easy to start working with. Let's take Redshift as an example; it's easy to create a Redshift cluster with 3 clicks but that doesn't make you experienced in distributed systems. Often the companies start using Redshift and as their data grows the price gets expensive exponentially. They hire data engineers at that point and try to switch to another solution or try to make it scalable but switching to a completely different architecture (our solution) is also not easy at this point because of switching costs. Essentially our product became a competitor of AWS from customer's perspective even though we're complementary.

Even though we have customers and a profitable company I don't think that we could find the product market fit with that product so now we're pivoting to something else and the new target is more niche.

ecesena• 8 years ago

You should check out RedisLabs and read about their story. I'm not affiliated, but I always thought it was amazing how successful they are given that AWS has redis ElastiCache.

Ask HN: What happened when Amazon moved into your business?

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