Why Startups Like Gopuff, Flexport Are Undergoing ‘Amazonification’
- Startups in the rapid delivery and logistics industry have hired many Amazonians to run operations.
- At Gopuff, it led to chaotic operations as managers rushed to hit companywide metrics, sources say.
- Startups say the Amazon model is the “gold standard” and will work if applied correctly.
In the last decade, Amazon has soared to become a transformational force in ecommerce, inspiring plenty of copycats rushing to swoop in on its talent.
As companies like Gopuff, Deliveroo, and Flexport race to copy Amazon’s playbook and even go on hiring sprees to bring on ex-Amazonians, the results of whether it works have been mixed at best. The problem with going all-in on the Amazon model, especially for a startup, is that they may not have the stability yet to adopt strategies built for a much larger company.
Consider Gopuff: the rapid convenience store delivery service. Last year, the company doubled down on the Amazon playbook. It hired dozens upon dozens of Amazonians at various levels, including its VP of operations Tim Collins, along with his deputies Maria Renz and Sanjay Shah. (In July, Collins left to later take a position at logistics startup Flexport)
While the organization of its warehouses improved, the broader result was chaos, according to a dozen current and former Gopuff employees.
Managers would scramble to meet new top-down success metrics, creating employee shortages elsewhere in the operation. Warehouse operators would have to answer for why some employees took bathroom breaks; shorthanded staff would expend resources writing 6-page papers and attending more meetings.
The Amazonification is visible in the ranks of companies across the ultrafast delivery and food startup sector. Reef, a mobile ghost kitchen startup, has more than 20 former Amazonians, including its vice president of operations Harshil Aghera, according to data from LinkedIn.
Berlin-based delivery service Gorillas has about two dozen, including its chief of global production systems, Gabriele Tagliavia. Deliveroo, the UK-based meal delivery service, has hired liberally from Amazon, including its chief operations officer Eric French.
The trend extends to non-delivery companies. In June, Flexport, the supply chain management and logistics startup, hired Amazon’s consumer chief Dave Clark as its new CEO.
Leaders hired from Amazon may try to run a newer company like they did at the e-commerce giant, said Brittain Ladd, a logistics industry consultant who’s worked with companies like Instacart. “But it isn’t Amazon,” he said. “If it was that easy, don’t you think everyone would be doing that?”
Why companies want to copy Amazon
The Amazonification strategy works in theory. Amazon’s path to becoming a tech giant was carved by its increasingly sophisticated warehouse and logistics network. The company pioneered quick and reliable delivery, and that prowess only grew during the pandemic when people around the world turned to Amazon for essential goods.
In 2017, Amazon had 74 warehouses across the country. At the end of 2021, it had 908, according to public disclosures. Its warehouse footprint doubled during the pandemic, gaining another 200 million square feet of space. The company hired aggressively as well, now employing more than 1 million people.
Amazon did overextend itself and recently shuttered warehouses as consumer demand tapered off. Still, the demand among startups to hire Amazon talent to copy its systems remains strong.
Coming from Amazon is “a gold standard with a halo,” said Martha Josephson, a partner with headhunting firm Egon Zehnder.
Amazonification works for some
Still, the Amazon model has burdened companies that aren’t equally flush with resources and workers.
At Gopuff, executives pushed through benchmarks for pack times and delivery times across all its warehouses, but managers often didn’t have enough employees to hit those metrics. It forced managers to shift resources towards packing orders, leaving shipments of food to pile up and spoil outside warehouses.
Advocates for the Amazonification of startups argue that the problem isn’t the model, but knowing which parts of it are adaptable and which ones are not.
Dave Glick, an Amazon veteran from its logistics team, argues that it would be foolish not to hire from Amazon—especially if you’re running a logistics startup. “It’s hard to believe you’re gonna be successful without Amazon DNA,” he said.
When Glick joined the logistics startup Flexe in 2019 as its CTO, he said the company had little insight about the performance of its own warehouses.
He pulled from his network of Amazon executives to help the company build software to better track its metrics.
“Amazon is an execution engine. Part of that is we built systems that allow them to be quite accurate and get metrics to inspect and dive deep. Many of these other companies don’t even have the scaffolding and metrics to do that deep dive, Glick said.
The mistake other companies might make is bringing that playbook wholesale and not adapting to the needs of an individual startup.
“Dropping [processes] into a startup without any thought and nuance isn’t going to work,” Glick said.