Business

WTF Fun Fact 13226 – The Amazon Two Pizza Rule

One of the secrets of Jeff Bezos’ success may just be the Amazon Two Pizza rule.

What is the Amazon Two Pizza rule?

Amazon CEO Jeff Bezos apparently requires his senior executives to abide by a Two Pizza rule. Any team that can’t be fed with two pizzas is too big and should be broken into smaller teams. The rule ensures that teams include only essential members and that everyone stays focused on their specific area of expertise.

This rule encourages efficient and effective teamwork and ensures that communication remains open and clear.

Bezos believes in the importance of keeping teams small and nimble. He believes that small teams can move more quickly and make more efficient decisions. He also believes smaller teams are better equipped to communicate effectively. When a team is too big, communication breakdown can lead to delays and inefficiencies.

Bezos believes smaller teams are more focused. As a result, teams are more likely to work on the most important tasks and make the best use of their time. In the end, it’s all about preventing teams from becoming bogged down in tasks that are not relevant to their goals and allowing them to focus on delivering value to customers.

Small teams and success

Business leaders believe the Amazon Two-Pizza Rule helps foster innovation. Small teams ensure members are more likely to feel comfortable taking risks and trying new things.

In addition, by keeping teams small, managers and leaders get to know their team members. This helps them understand their strengths and weaknesses. This helps managers develop their skills in areas such as coaching and mentoring.

The purpose of pizzas

Amazon applies the Two Pizza rule in various forms, with teams ranging from two to a dozen people. It has been widely adopted by other companies.

By keeping teams small and focused, companies can ensure that they are able to work together effectively, deliver results quickly and foster innovation and creativity. — WTF fun facts

Source: “How Jeff Bezos Used the 2-Pizza Rule to Put an End to Useless Meetings at Amazon” — Inc.

WTF Fun Fact 12585 – Ronald Wayne Sells Apple

We’ve all heard of Apple co-founders Steve Wozniak and Steve Jobs. But do you remember the third co-founder, Ronald Wayne?

The trio founded Apple Computer Company (now Apple, Inc) in 1976. But while Wozniak and Jobs each owned 45% of the company, Wayne had 10%, which would make him the tie-breaker in any disagreements between the two Steves.

He was the administrative brains among the computer geeks. And like any good businessman, he wanted to mitigate his risks.

Funny enough, Wayne’s first business sold slot machines (and ran out of luck, going into debt that he had to pay off personally).

The three met when they all worked at Atari, and Wayne invited Wozniak and Jobs to his house to discuss the future of computers. Jobs suggested they start a business, with Wayne (who was the 41-year-old “elder”) at the time acting as “the adult in the room.”

Wayne drafted the partnership agreement and designed Apple’s first logo (which was replaced the following year). But he got cold feet as he considered the future of the business in light of his past failure and the resulting debt.

Legally, all partners in a company are responsible for its debt, so when Jobs made a purchase order with a $15,000 loan, Wayne started to get cold feet. The vendor Jobs purchased from wasn’t known for being speedy with their deliveries, and Wayne saw warning signs.

His job at Apple also wasn’t his passion – he enjoyed engineering and his slot machine designs. So he did what any intelligent businessman might do – he moved on to greener pastures. Well, at least they seemed greener at the time.

Renouncing his 10% of the ownership after just 12 days (though Wozniak’s account is that it took a few months), Wayne sold his shares back for $800.

Just for comparison, in 2011, the contract signed by all 3 men in 1976 was sold at auction for $1.6 million. (Oh, and Wayne sold that as well – in the 1990s he gave it up for $500 before he knew what it might be worth someday.)

Wayne says that he made the best decision he could with the information he had at the time, which is respectable. And while he retired to a trailer park to collect stamps and play penny slots, he insists he doesn’t regret the decision.

Had he stayed with the company, his life would have certainly been different. Those shares would be worth a mind-boggling $300 BILLION today. – WTF fun facts

Source: “Apple just hit a $1 trillion market cap—here’s why its little-known third co-founder sold his 10% stake for $800” — CNBC

WTF Fun Fact 12418 – FedEx’s Luck

Federal Express (now known as FedEx) was the first overnight delivery company. It was founded by Frederick Smith and based on an economics paper he wrote as a student at Yale. The term paper was written in the 1960s, but it argued that the world needed a way to deliver packages overnight in the new, computerized age of information. As Smith recalls, he got a “C” because his professor found the idea implausible.

But what’s even more implausible-yet-true is how FedEx survived in its early days while running a fleet of airplanes as gas prices skyrocketed. Smith had initially funded the company with his $4 million inheritance along with $80 million in loans and equity investments (in other words, it was no small start-up in his parents’ garage). However, those eight planes covering 35 cities drove the company into debt.

Smith tried to raise more funding but failed. The company’s funds reached a paltry $5,000 – not even enough to gas the planes and pay the pilots. Faced with potential ruin, Fred Smith made a questionable decision. Without consulting his partners, he took the company’s remaining money, hopped on a plane to Las Vegas, and headed to a casino to play blackjack.

When he returned to headquarters the next week, he had turned the $5,000 into $27,000. That wasn’t enough to keep things afloat for long, but they could stay open another week and had new motivation to keep trying for another round of funding.

In the book “Changing How the World Does Business: FedEx’s Incredible Journey to Success” former FedEx senior vice president of operations Roger Frock recalled his reaction to Smith’s antics: “I said, ‘You mean you took our last $5,000 — how could you do that? [Smith] shrugged his shoulders and said, ‘What difference does it make? Without the funds for the fuel companies, we couldn’t have flown anyway.'”

Soon after, FedEx got another injection of funding to the tune of $11 million, which helped stabilize the company and allow Smith to start a direct mail advertising campaign. The company took years to become profitable, but in 1976 it brought in $3.6 million. After going public a few years later, the company became a long-term success.

Of course, we can’t help but wonder about the professor who gave Smith a “C” on his economics paper at Yale. Was he right in thinking that it wasn’t really a viable business idea (after all, it took some serious luck to make it happen)? – WTF Fun Facts

Source: “The Founder Of FedEx Saved The Company From Bankruptcy With His Blackjack Winnings” — Business Insider