In a riveting episode of the Leaders and Legacies podcast, Steve Anderson shares his profound insights on leadership, strategic risk, and business growth. Anderson, known for his best-selling publication "The Business Letters 14 Principles to Grow Your Business like Amazon," reveals how embracing risk is essential for innovation and growth.

Drawing from his insurance background, he uniquely merges the cautious world of risk management with the dynamic realm of technological advancement. Anderson argues that the greatest risk businesses face today is the reluctance to adapt to rapid technological changes. He champions the concept of 'successful failure,' encouraging leaders to foster a culture where experimentation is valued, even if it leads to temporary setbacks. By doing so, organizations can unlock new opportunities and drive forward innovation. Anderson's approach to leadership is not just about managing risk but about actively leveraging it as a catalyst for change and growth. His insights provide a compelling roadmap for leaders looking to navigate the complexities of the modern business landscape with confidence and strategic foresight.

Want to learn more about Steve's work? Check out their website at https://thebezosletters.com/.

Connect with Steve on LinkedIn at https://www.linkedin.com/in/stevetn/.

Bullet List of Key Points with Time Stamps

• 00:01:18-00:01:47: Introduction to Steve Anderson, his expertise, and accomplishments.
• 00:02:06-00:02:10: The importance of embracing risk in traditionally risk-averse industries.
• 00:09:31-00:09:56: The concept of 'successful failure' and its significance in business innovation.
• 00:11:30-00:11:54: Overview of the 14 principles for business growth inspired by Amazon.
• 00:24:36-00:25:00: The role of customer-focused invention in driving business success.
• 00:39:15-00:39:40: The potential and limitations of AI in content creation and business operations.
• 00:43:50-00:46:21: Discussion on Catlett and its mission to provide technology advice and resources.

Transcript

00;00;00;00 - 00;00;30;20
Unknown
I was in a coma for six weeks while the doctors told my wife I was going to die. When I woke up, she told me the most fantastic story. My team kept running the business without me. Freelancers reached out to my team and said, we will do whatever it takes. As long as Craig's in the hospital. I consider that the greatest accomplishment of my career.

00;00;30;23 - 00;00;51;10
Unknown
My name is Craig Andrews and this is the Leaders and Legacies podcast where we talk to leaders creating an impact beyond themselves. At the end of today's interview, I'll tell you how you can be the next leader featured on the show.

00;00;51;10 - 00;01;18;08
Craig Andrews
We have a an exciting discussion today with Steve Anderson. And I can tell you right now you're going to want to listen, I. Every minute I've talked to Steve, I've just I've walked away with some amazing insight, some amazing nugget, a fascination. and so this episode is probably going to go a little bit longer, than, than normal, because I think it's impossible to condense it down into just a few minutes.

00;01;18;11 - 00;01;47;19
Craig Andrews
But Steve Anderson is an expert in strategic risk and business growth. Okay. I'm sure you've heard that before. Well, he's also the publisher of the Business Letters 14 Principles to Grow Your Business like Amazon. Well, that became a Wall Street Journal and USA today international bestseller. It's been translated in a bunch of languages. And, Steve's been hand-picked by LinkedIn as one of the world's most influential thought leaders.

00;01;47;22 - 00;02;06;03
Craig Andrews
And one of the things that most fascinates me about our discussion, that we're about to have is Steve comes from a industry that absolutely abhors risk, but he's going to talk about the importance of risk. So, Steve.

00;02;06;06 - 00;02;10;21
Steve Anderson
Welcome, Craig. Thank you so much for having me.

00;02;10;23 - 00;02;28;11
Craig Andrews
Well, one of the things I want to start with, because I just I have no idea where this is going, but it it was interesting. You said, you know, one of the things I ask a lot of all my guest is tell me something interesting that happened in your life. And all of my guests say, well, my life has been pretty boring.

00;02;28;14 - 00;02;51;00
Craig Andrews
And that's interesting because we all believe that about ourselves. And. And, Steve, that's what you told me. And then you just kind of casually mentioned we'll have a shot off the end of an aircraft carrier, like, okay, I don't know that many people that have had that happen. I mean, my goodness, I live on the street with a retired Marine Corps pilot, and while he's been on a carrier, he was never shot off the end of one.

00;02;51;00 - 00;02;53;05
Craig Andrews
So what happened?

00;02;53;07 - 00;03;15;08
Steve Anderson
So this was a trip put together, a VIP trip put together by, somebody I know in the insurance industry. There were about 15 of us flew out to San Diego Naval Air Station, took off on what's called a car, a two propeller engine, kind of the bus, and flew out to the USS Carl Vinson aircraft carrier landed, got captured.

00;03;15;10 - 00;03;40;18
Steve Anderson
obviously not a jet, but spent 24 hours on that ship and watch full flight operations. toured the ship, spent the night eight, in a mess with all the Navy people there. fascinating trip. And, I do have to tell you, when I got off, I was, came home. It was a late Friday night.

00;03;40;20 - 00;03;46;17
Steve Anderson
Saturday morning. The first thing I did was turn on Top Gun and crank it up as loud as I could go.

00;03;47;24 - 00;03;52;00
Steve Anderson
The original, I should say. Now, the original Top Gun movie. So.

00;03;52;00 - 00;04;06;05
Craig Andrews
Yeah. Well, I haven't been on the Carl Vinson, but I've been very close to. I was I was stationed in Subic Bay in the Philippines when it pulled in the dock. And that is a massive, massive ship.

00;04;06;07 - 00;04;11;19
Steve Anderson
5000 people on that floating amazing city.

00;04;11;22 - 00;04;20;15
Craig Andrews
Yeah. And so how did this happen? I mean, that's I, I haven't heard of something like this, taking insurance agents on aircraft carriers.

00;04;20;20 - 00;04;53;04
Steve Anderson
What's one of the guys I knew was a former, helicopter pilot in the Navy flew off carriers. He was new, you know, it's who you know. So he was able to put a VIP trip together. And they do that a lot. Are they? Did, this was literally in August of 2001. And, you know, we 911 and it just a few weeks literally later, I don't know if they're still doing those or not, but yeah, timing was great.

00;04;53;04 - 00;05;03;00
Steve Anderson
And, it was obviously I'm still talking about it after all that all this time. So it was a really, really fun trip.

00;05;03;02 - 00;05;19;17
Craig Andrews
And, you know, one of the things, unless you've looked at carrier operations closely, one of the things that you don't realize is you don't have the whole length of the carrier to take off. You don't even have a majority of the length of the carrier. It's that cat looks like it's almost hanging off the bow.

00;05;19;19 - 00;05;42;12
Steve Anderson
Yes, exactly. It is. And, one of the things we're able to do is, there's a place, if you remember, in the movies, when you hear somebody say, call the ball. So that's the pilot coming in. Well, they're standing at the very edge of the ship, and we were able to get out there and stand there.

00;05;42;14 - 00;06;03;18
Steve Anderson
I still remember being told if if I tell you to jump, you jump this way. And, I mean, literally, however many stories above the ocean, well, there it was a net. But if the aircraft is coming in and hits the end of the ship, you don't want to be in that area. So, and the, the catapult.

00;06;03;18 - 00;06;23;13
Steve Anderson
So we literally went down into the catapult room like huge pistons when that aircraft is coming down catching that cable and they're going to full afterburner, because if they miss the cable, they need enough power to get back off that ship and not go over the edge into the water.

00;06;23;15 - 00;06;36;11
Craig Andrews
So going from zero, you know, at launch, going from zero to flight velocity and and I'm guessing that's, that's in less than 100 yards. At least that's a problem.

00;06;36;12 - 00;06;43;09
Steve Anderson
Yes. And literally from 0 to 160 miles an hour and probably 3 to 4 seconds.

00;06;43;12 - 00;06;45;28
Craig Andrews
What's that feel like?

00;06;46;01 - 00;07;07;01
Steve Anderson
we were in four point harnesses, so, you know, harnesses here. We were told to grab the harness. They cinched us in as tight as they could, and we were told to lean as far forward as we could because we were actually facing the back. It's, you know, you think about a roller coaster, multiply that by a few times at least.

00;07;07;03 - 00;07;17;08
Steve Anderson
I mean, it's it's a exhilarating five to 10s. And you're often flying and going back to shore.

00;07;17;10 - 00;07;23;10
Craig Andrews
Wow. And then and then being captured, you know, coming in and hitting that cable and stopping, you're stopping.

00;07;23;10 - 00;07;25;29
Steve Anderson
And you're stopping in feet.

00;07;26;01 - 00;07;28;09
Craig Andrews
Yeah. What's what's that feel like.

00;07;28;11 - 00;07;56;11
Steve Anderson
A similar feeling, although I would say not as jolting as the catapult. Catapult was a huge jolt. And I think because the the plane is smaller, not as heavy, propeller driven, not as fast, it wasn't quite as dramatic, but still it was fun. And to get off the plane and be on the deck and walk across, it was just fascinating.

00;07;56;13 - 00;08;05;17
Craig Andrews
Wow, what an amazing experience. Certainly. Certainly not something I'd expect from somebody in the insurance industry.

00;08;05;19 - 00;08;08;00
Steve Anderson
Isn't that the truth?

00;08;08;03 - 00;08;19;10
Craig Andrews
yeah. Well, let's, let's talk a little bit about your your book, the Bezos. I know you say Bezos. I, I'm not sure what it is, but Bezos.

00;08;19;13 - 00;08;28;15
Steve Anderson
He says Bezos. I will tell you, because I worked on that a while when I first was writing it, how to actually pronounce his name.

00;08;28;18 - 00;08;34;24
Craig Andrews
Yeah. So what's what what's a what is this, you know. And how did you come upon it? You know, what did you do.

00;08;34;27 - 00;08;59;28
Steve Anderson
So again, insurance related, I was literally working with a group looking at the, the chain, what we call the changing nature of risk. Okay. So insurance industry protects against the worst things that can happen. And as technology and new things come along, we have to adapt as an industry to figure out, okay, what are the risks? How do we protect it?

00;09;00;02 - 00;09;31;22
Steve Anderson
So I was working on helping insurance agents understand and new technology coming and you know, Uber and Internet of things, IoT and smart homes and, you know, 3D printing. I mean lots of different technologies coming. How does that affect the insurance industry, and how does an insurance agent help their clients understand the effect? That was the background. I started realizing that technology was going to continue to develop.

00;09;31;24 - 00;09;56;20
Steve Anderson
And so the question I started asking was is the biggest risk insurance agents face? And I expanded that out into the book is the biggest risk business face actually not taking enough risk, meaning adapting to technology, not sitting back and kind of waiting to see what happens. and that's even accelerated more in the last five and ten years.

00;09;56;20 - 00;10;25;00
Steve Anderson
Certainly. So in my research, I was looking at companies that were once very successful and are no longer here and ask the question, what happened? And then I was looking at companies that have continued to be successful, and I asked the question, why came across Amazon? Kind of we know the story successful, started in the garage, etc.. I started reading Jeff Bezos letters to shareholders.

00;10;25;00 - 00;10;58;04
Steve Anderson
So public company in 1997. So he started writing a letter to shareholders, very typical for a CEO. What was not typical was the nature or the type of the letters that he wrote. Meaning he's a writer and kind of Craig. He's a storyteller. And so I realized as I started reading the letters, and at one point I literally took all the published letters, 1997 to 2018 and read them as a narrative, a book, almost 50,000 words.

00;10;58;06 - 00;11;30;04
Steve Anderson
And I realized there were threads going through those letters that he talked about, because he talked about what he did to grow Amazon. And I realized there's some really good nuggets in there. And so as I continued to research and think about it and, and the kind of the idea around these growth principles that Amazon used and Bezos used in order to build that company, and I believe can apply to virtually any business.

00;11;30;07 - 00;11;53;28
Steve Anderson
And certainly a small business owner is thinking, I'm not Amazon. I don't ever want to be Amazon. No problem. That's fine. But remember, Bezos started literally as a small business in a garage and grew from there. And so are these principles applicable. And I again, I believe they are. So there are 14 total principles. I grouped them into force, what I call cycles test, build, accelerate and scale.

00;11;54;01 - 00;12;07;26
Craig Andrews
Yeah. I'm sorry, let me jump in real quick because I'm okay. But you said something. You said something that I don't think I don't want people to miss. And you said Jeff Bezos is a storyteller.

00;12;07;28 - 00;12;12;19
Steve Anderson
I thought that might catch you actually, which is part of why I said it. But he is.

00;12;12;22 - 00;12;39;06
Craig Andrews
And you know who I think of when, when you said that immediately there was a quote that popped in my mind by Steve Jobs that said the most powerful person in the world is the storyteller. And I didn't know I didn't realize that about Jeff Bezos. He was a storyteller. and there, you know, when you say that it's flashes in my head, Steve Jobs quote, the most powerful person in the world.

00;12;39;08 - 00;12;47;02
Craig Andrews
Well, I don't know if Bezos is the most powerful person in the world, but he's he's up there.

00;12;47;04 - 00;12;47;19
Steve Anderson
Yep.

00;12;47;21 - 00;13;19;04
Craig Andrews
I agree ace is up there and, you know, looking at the result of of years of work, obviously it's hard for us to imagine a life without Amazon, you know, my wife and I and just frankly that there's my wife and I feel a little bit conflicted when we place an order with Amazon because we know that, if we're getting something phenomenally cheap from Amazon, it's because probably because it was made by slave labor in China.

00;13;19;04 - 00;13;40;18
Craig Andrews
And we don't feel good about that. but as we try to figure out how to live a life without Amazon, it's really hard to imagine what that world looks like. And that kind of reinforces that whole point of most powerful person in the world is a storyteller. And and so you saw that. You saw. Yeah. He was telling stories in his.

00;13;40;18 - 00;14;14;02
Steve Anderson
Yeah, I did, yeah, I did. And and I would say one of the, he factors, I guess I would call it with Bezos is he's a writer. So just a again, a quick story, 2004 Bezos sent an email around to his senior leadership team and banned PowerPoint at Amazon. You know, nobody would be able to do a presentation using a PowerPoint keynote, whatever, you know, a slide oriented presentation.

00;14;14;05 - 00;14;45;10
Steve Anderson
What he put it in, its place was a memo, had different names over the years working backward document, six page memo. But to pitch an idea at Amazon, you have to write it down. Maximum of six pages starts with what they call a future press release. And what Bezos said is people hide behind PowerPoint bullet points that it it it allows, lazy thinking.

00;14;45;12 - 00;15;15;06
Steve Anderson
If you have to write out it out right out a fax. Right. What are the things people are going to know? You have to think more deeply about what it is that you want to accomplish. And the second thing is that memo was not sent out before the meeting. It's handed out at the meeting, and people literally sit around a table reading it for the first 1015, maybe 30 minutes, depending on how how big the decision is.

00;15;15;09 - 00;15;43;04
Steve Anderson
And then literally they're all on the same page. And here's what Bezos said. He said executives are busy. They'll say they read it but they won't. So we build time in. So everybody literally is on the same page. Now I will tell you, I used that technique when I started a new company about four years ago, I did a memo, I handed it out to a group of about 15 potential investors.

00;15;43;07 - 00;16;14;15
Steve Anderson
Let them read it. Excruciating 20 minutes. What are they thinking? You know, did I make my points right? Did I I mean, excruciating, and then you open it up for discussion and now the discussion is rich. You're not. You're answering questions. And if you did it well, a lot of their questions are already answered. They have maybe other ones you hadn't thought of and then you have a discussion that enriches everything.

00;16;14;18 - 00;16;32;05
Steve Anderson
And then the third point now if that project, product, whatever fails, now you have a document to go back to and figure out, okay, what did we not understand that we should have and how do we correct this in the future?

00;16;32;07 - 00;16;46;03
Craig Andrews
Yeah, yeah. So powerful. And, you know, one of the other purposes I heard of that process is, you know, this memo, it's a narrative. You're telling a story.

00;16;46;05 - 00;16;49;17
Steve Anderson
Yes. That's my point in telling you that.

00;16;49;19 - 00;17;01;12
Craig Andrews
And and one of the things that happens is when you tell a story that doesn't make sense. People say, wait a minute. That story doesn't make sense. Right? And this is what you were saying. You can sneak it through in bullet points.

00;17;01;14 - 00;17;13;19
Steve Anderson
Yep. Because you kind of gloss over it. Whereas if it's written out, you pretty much can't. Or people recognize that hole or that problem or that disconnect.

00;17;13;22 - 00;17;37;00
Craig Andrews
And you know, I've, I've experienced that. You know, one of the things that we do for people, we help them build, you know, what we call an irresistible first time offer. And in the process, we start with the pains. Because if you don't start with customers pains, it's going to fail. But the last step we do before we actually start building the offer is we write a problem statement.

00;17;37;02 - 00;18;02;25
Craig Andrews
And it's supposed to be something that you could hear you, you could hear your ideal customer saying and built off of the pains, you know, the top five pains. And, and there was one time that we went through the entire process. We read the, read the problem statement and my client looks at me and says, I can't imagine any one of my customers ever saying that.

00;18;02;27 - 00;18;26;18
Craig Andrews
And on one side, I that made me unhappy because I was like, geez, we just wasted, you know, two hours. But what I told him was, I said, if you don't think your customer's going to say that, we need to start over. And that's I believe that's what Bezos was doing. Bezos I'm sorry. I'm going this okay.

00;18;26;20 - 00;18;41;21
Craig Andrews
I believe that's what you were saying Bezos was doing, was it would pull out things, you know, back to what you were saying. You could sneak things through in bullet point that when you put them in narrative format, people listened to it and like, no, sorry, that's not a believable story.

00;18;41;23 - 00;19;07;22
Steve Anderson
Yeah. Are there holes in it or what about this? Or I mean, it just it, it makes the whole process, actually, it's the idea of slowing down to speed up because it's it's a slower process, but you don't get months down the, the, the track of creating something new and all of a sudden realize, oh, we didn't think about this.

00;19;07;24 - 00;19;13;25
Steve Anderson
You do all that in the beginning. So you save time at the, as you're building.

00;19;13;27 - 00;19;36;26
Craig Andrews
Yeah. Well, in the case of my client, if we had just plowed forward saying, no, no, we're going to make this work, we would have wasted months. as it was, we just wasted a few hours, and I would say it wasn't even a waste with. Yeah, we'd spend a few hours crying the Thomas and, quote, you know, we, we spent three hours learning what the ideal customer wouldn't say.

00;19;37;03 - 00;19;39;00
Craig Andrews
So we could go work on what they would say.

00;19;39;00 - 00;19;43;14
Steve Anderson
What they would say. Yeah, exactly.

00;19;43;17 - 00;19;50;28
Craig Andrews
Thank you for sharing that about him being a storyteller. I just I never knew, but it makes so much sense once you lay that out.

00;19;51;01 - 00;20;19;23
Steve Anderson
Well and and and know Craig, you you may have read shareholder letters. Typically they're boring. You know, they're touting the company and Bezos did that no question. But it's the it's the weaving of the stories. And, here's what we did. And you know, he talks about decision making and he talks about, all kinds of different things of not just here's what we did, but this is how we did it and why we do it this way.

00;20;19;25 - 00;20;42;29
Steve Anderson
That's again, it was a, you know, and I don't know that I've used that word before, but it really was the storytelling that caught my attention when I said there were threads through the letters. I mean, that's like a story. There are threads through a story, you know, there's the hero and the victim and all the different parts of storytelling, you know?

00;20;43;01 - 00;21;07;07
Craig Andrews
So I cut you off. A few minutes ago, you were about to talk about the 14 principles, and I didn't wanna miss that because that's really important. But I also wanted to make sure we didn't miss this storytelling aspect and the power of that it if people will embrace storytelling. I've, I've got a friend named Matt Zahn that runs a podcast called stories with traction.

00;21;07;09 - 00;21;16;11
Craig Andrews
if people will embrace the power of the story, it will change not only your life, but it will change your life because of the way you change the lives of others.

00;21;16;13 - 00;21;18;23
Steve Anderson
Yeah, totally. And great.

00;21;18;25 - 00;21;19;15
Craig Andrews
So let's talk.

00;21;19;15 - 00;21;47;10
Steve Anderson
About I think what I was saying is, you know, 14 principles a lot. So I, we, I broke them up into four cycles. What I call test, build, accelerate and scale. And I believe businesses are always going through those cycles. It could be a department doing part of it. The business as a whole, small business, larger businesses, etc. and and to to put some context around the principles.

00;21;47;12 - 00;22;16;21
Steve Anderson
so I will give you one. I think it's my favorite. the in the test cycle, the first principle is called encourage successful failure. Now typically you don't hear those two words together a successful and a failure. But the idea is kind of back to my six page memo. If something doesn't work and you see Amazon all the time closing things down, trying new things, that's part of that process.

00;22;16;23 - 00;22;43;09
Steve Anderson
And they encourage employees to experiment. And if you're going to experiment, you're going to fail. And if you're going to experiment and you're not going to fail, it's not an experiment, right? I mean, again, back to your Thomas Edison. I mean, multiple examples of of that, that, that ultimate success often comes out of failures when you're looking for something else.

00;22;43;12 - 00;23;10;16
Steve Anderson
And the and the question is, as a business owner, are you building a culture that supports that meaning? I don't believe employees are actually afraid of failure, but I do believe they're afraid of the consequences of failure. Meaning my career's damaged. My, you know, I don't get a promotion because of this. Now, I absolutely have to say this is not stupid risk.

00;23;10;18 - 00;23;35;11
Steve Anderson
Right. So that's that idea of risk taking. It's not just let's see what happens. It's very intentional. It's very focused. It's let's mitigate the risk as early as possible. Let's understand where the problems are going to be. So we can solve them either with internal resources or now we know who we need to hire and what expertise we need to hire to make this project go forward.

00;23;35;14 - 00;24;00;04
Craig Andrews
Yeah, I think there's an important question that comes in there, and I think it's something every business owner faces. Is how what's the difference between stupid risk and bad risk. And and a lot of things look stupid until they succeed. and so, I don't know, I don't feel like I personally have the compass to know what's a stupid risk versus what's a bad risk.

00;24;00;04 - 00;24;08;00
Craig Andrews
But I still need a criteria for determining the risk I can accept versus the risk I cannot. How would you answer that?

00;24;08;02 - 00;24;36;07
Steve Anderson
So I think a couple things. One is, you know, obviously now Amazon has the resources to take big risks because, they can pay for them. Early on. They didn't. And again, building this culture of invention, not just innovation. And so a phrase he uses a lot in his letters is we invent on behalf of the customers.

00;24;36;07 - 00;24;59;11
Steve Anderson
So go back to your example. My customer wouldn't say this. Well, at Amazon, they want to know their customers so deeply, so intimately that they can invent on their behalf. They can understand. And that takes a lot of effort and a lot of work. and it's not just sitting in an office, it's actually going out and seeing people and seeing what they do.

00;24;59;13 - 00;25;30;03
Steve Anderson
an example comes to mind is the Kindle, the e-reader. Now, there were e-readers out before Kindle came along, but that the goal of the Kindle was any book in the world. Let me rephrase this. You can read any book in the world in 60s or less. what was the change? A Kindle doesn't have to be plugged into a computer to download a book.

00;25;30;06 - 00;25;58;20
Steve Anderson
Yeah, cuz you know, again, think about at the time a huge technological problem and you can start a book on one device and continue reading it on another, meaning you could start it on a Kindle. I do it all the time. You probably do. To start it on a Kindle, go to your phone, go to another device, pick up exactly where you left off, a huge technological problem.

00;25;58;23 - 00;26;21;03
Steve Anderson
They have to be able to understand the state of those devices over maybe days or months, and be able to know which is has the most current, again, huge technology problem. They solved it and the Kindle now is the primary e-reader for those that like that format.

00;26;21;05 - 00;26;52;18
Craig Andrews
Yeah. And that's I it I rarely get a, a book in print. My preferred platform is Kindle. I published a couple books and I discovered that, there's more people. It's still like paper than than me, but but an example of a something, a place where they experimented. It made perfect sense, but it clearly failed. And I don't even remember the name of the product, but they were installing little buttons in your house, you know?

00;26;52;19 - 00;26;57;13
Craig Andrews
So, in your laundry room, you would have a button for laundry detergent.

00;26;57;15 - 00;26;57;23
Steve Anderson
Yes.

00;26;57;23 - 00;27;10;19
Craig Andrews
And if you were running out laundry detergent, you hit the button step. Having to remember to go back to the computer and order some. I would have thought that would have been a massive success. Obviously it failed.

00;27;10;22 - 00;27;43;18
Steve Anderson
Yeah. Well, and again, you know how they define failure. It didn't generate enough revenue to justify the expense. And absolutely. Now the question is what did they learn from that that they applied to something else. So let me give you another quick example. Amazon and 2014 released a phone called the Fire Phone. An Amazon phone now it was Jeff Bezos pet project.

00;27;43;24 - 00;28;02;18
Steve Anderson
He thought having a phone where you could more easily shop on Amazon is a great idea. Of course he would, but nobody else did. It was a dismal failure. At one point they sold it for $0.99 and they couldn't give it away.

00;28;02;20 - 00;28;03;18
Craig Andrews
Wow.

00;28;03;21 - 00;28;39;03
Steve Anderson
That year, 2014, they wrote off $178 million in inventory and development costs gone. Failure. Success. They learned a lot about voice and how to process voice. They had to because it's a phone. Four months after the release of the fire phone, Bezos got his first demonstration for a, Friendly's. can ish device that you could talk to.

00;28;39;03 - 00;29;11;05
Steve Anderson
And it would answer you. We now know as the Echo and Alexa, as the software that runs it all, that voice technology that they learned, they put into the echo devices that now has become obviously pretty successful. What's interesting, though, is not as successful as Amazon thought. Now they're rethinking what the echo is because they thought the echo people would just like the button.

00;29;11;07 - 00;29;39;07
Steve Anderson
People would just order this order that that's where they would make their revenue. But the the echo, Alexa department has lost billions of dollars over the last number of years because it didn't do what it thought. So they're continuing to rework what that might look like. But those are ubiquitous now in many, many homes. We have I don't I don't know how many we have actually multiple devices.

00;29;39;09 - 00;29;47;26
Craig Andrews
And you know what? I think it's really important. to highlight here, I completely forgotten about the fire phone.

00;29;47;29 - 00;29;50;07
Steve Anderson
Most people have.

00;29;50;09 - 00;29;59;22
Craig Andrews
Easily, easily forgotten. Yes. and until you started talking, I hadn't thought about those little buttons. I don't even remember the name of the product I dots.

00;29;59;22 - 00;30;03;02
Steve Anderson
Maybe I don't, I don't either, I'd have to look that up.

00;30;03;05 - 00;30;22;23
Craig Andrews
But I think the important lesson there is people don't remember the failures, you know, as as business owners, I think it's easy for us to get too wound up about failures and see it as, you know, some, bad mark on on us as a.

00;30;22;23 - 00;30;25;15
Steve Anderson
Land damage or any of those things.

00;30;25;16 - 00;30;36;08
Craig Andrews
Yeah, but the fact is that Amazon wins more times than it loses, and people see Amazon as a winner.

00;30;36;11 - 00;31;03;12
Steve Anderson
Yes. Yeah. Yes, very much so. I mean, again, you can point to prime crazy idea free shipping two days or less. And especially at the time it launched. I mean, the CFO, I mean the whole senior leadership team said, we can't do that. We're going to lose massive amounts of money. Amazon Web Services, AWS, another big bet, right?

00;31;03;15 - 00;31;30;17
Steve Anderson
Help solve an internal problem. And they realized, hey, other customers might want the same capability. Amazon Marketplace opening up Amazon's sales pages to third party sellers. But again, here's what Bezos said. If a third party seller has a product that we don't have, that's better for the customer. If a third party seller has a price lower than what we can offer, that's better for the customer.

00;31;30;19 - 00;31;54;16
Steve Anderson
And if it's better for the customer, it'll eventually be better for Amazon. And now over 60% of the sales on Amazon go through third party sellers. So even kind of your comment earlier on either about, you know, small businesses, but Amazon has created millions of small businesses because they have opened up their platform. Now they charge for it.

00;31;54;16 - 00;32;11;16
Steve Anderson
So that's another revenue source for Amazon. But it gives small business owners the ability not to have to build out e-commerce sites, not had to build out logistics, not to have all that advertising stuff. They can piggyback on what Amazon has done, and now Amazon takes a piece of that.

00;32;11;19 - 00;32;29;25
Craig Andrews
Yeah. One of the latest things I've seen Amazon do obviously they've spent, you know, last 5 or 10 years building their own distribution network and no longer is a UPS truck dropping off your Amazon delivery. It's an Amazon truck. Yep. And now Amazon's getting into the shipping business.

00;32;29;25 - 00;33;04;17
Steve Anderson
Yes it is. Yes it is. The it. And again it's very similar to Amazon Web Services AWS. So computing renting computing power basically now you can rent logistics. And again massive investments of that logistics network. Now they're able and that's another principle which is long term thinking. Yeah. So Bezos is very much a long term thinker. He thinks multiple years ahead investment now will pay off later.

00;33;04;19 - 00;33;11;29
Steve Anderson
And logistics as a service is definitely something they're building.

00;33;12;01 - 00;33;31;29
Craig Andrews
And you know, the thing that just really marvels shocks my mind a little bit as we're talking. And I'm listening to you talk about this culture of risk and all that you do. And I'm like, this is a guy from the insurance industry.

00;33;32;01 - 00;34;06;05
Craig Andrews
Oh, yeah, I honestly I mean, I've never heard I've never heard somebody from insurance talks so much, you know, so positively about creating a culture of risk. and I'm curious what what made you think that way? What kind of sets you apart? Because I think that's part of the genius of, of your success is you've been able to bring together two different types of thought in one industry that normally don't coexist.

00;34;06;07 - 00;34;07;13
Craig Andrews
Yeah.

00;34;11;14 - 00;34;36;06
Steve Anderson
There may be a couple things. One is, I have a unique background with the insurance aspect. And, you know, I could get really geeky insurance too, but I also have the technology and I think both inform each other and the insurance and any industry, I don't care who it is, is not going to slow down technology advancement.

00;34;36;06 - 00;34;55;11
Steve Anderson
So now we're talking a lot about generative AI and what's going to happen. And all those kinds of things. It's going to develop. It's going to be part of what we do. The question is, how are you going to address it as a business owner? And I'm spending a lot of time right now in that arena. Again, what's the risk?

00;34;55;11 - 00;35;18;28
Steve Anderson
Is the risk. Absolutely. You can't walk out your door in the morning and not face risk. Get in your car flying. I mean, whatever it is, it's how you understood it and how you mitigate it. Meaning how do you reduce the risk as a business owner? And again, insurance is a is one of the ways that we do that.

00;35;18;28 - 00;35;47;06
Steve Anderson
We have an insurance policy where we transfer the risk to an insurance company. We have safety programs. So we try and mitigate the risk. All those kinds of things. But bringing that into the technology development and technology world, I think is, it is unique in terms of how I think. And it's been kind of fun shaking up the industry a little bit and getting others to think about risk in a different way.

00;35;47;08 - 00;36;15;02
Craig Andrews
Yeah. Well, let's talk a little bit about I mean, you brought that up and I, you know, I, I was talking to somebody who went to a conference recently and he said 80% of it was AI. And, you know, obviously a massive innovation, massive innovation that will forever change our lives. And there's a part of me that always yeah, I'm waiting for somebody to come out with the AI brewed coffee just so that they could get.

00;36;15;05 - 00;36;17;08
Steve Anderson
no question.

00;36;17;10 - 00;36;35;05
Craig Andrews
It's like we're going to do everything I. Your coffee's brewed by an AI, right? And and so there's there's going to be some, you know, some overshoot there, and there's going to be some undershoot. And what's your take on this and how how should people approach AI?

00;36;35;07 - 00;37;06;00
Steve Anderson
So, I mean, a couple things I will say. One is, you know, what we experienced last year with OpenAI releasing ChatGPT, that's kind of what sparked a lot of stuff. It's a 65 year old technology development cycle, literally the first use of the term artificial intelligence was in 1955, and it's been slowly developing. And that's a very typical technology development cycle.

00;37;06;02 - 00;37;41;23
Steve Anderson
It's deceptive, meaning you don't think about it or it's stupid. But, you know, I've been using versions of of what we now call AI machine learning pattern matching since the early days of speech recognition, using a microphone and trying to talk and type right now, that's easy. And it really pretty good. but but last November, a little over a year ago, hype cycle went really high.

00;37;41;24 - 00;38;08;14
Steve Anderson
Typical for something new. I mean, Uber, Airbnb, right? All those crowd sharing type platforms had a similar and then kind of go down when expectations don't meet, hype and then start building back up into real use cases or real examples of how it can be used to improve. Okay. So that's background. Been around a long time. It's not new.

00;38;08;16 - 00;38;31;25
Steve Anderson
I think from my perspective. I'm not afraid of it. I actually I don't believe that silicon can become biologic. We don't even understand now how the human brain works, thinking that a computer can be programed for what we don't understand, I don't believe is correct. so that piece of it, you know, will there be bad uses?

00;38;31;25 - 00;39;03;06
Steve Anderson
Of course, there always are. There are bad actors out there. And we'll figure out, you know, how we manage that. I, I don't believe here's I don't believe employees will be replaced by AI. I be I believe employees will be replaced by other people who are using AI to do work. So I believe it's employee augmentation, not employee replacement.

00;39;03;08 - 00;39;15;23
Steve Anderson
And I and I sort of like the phrase automated intelligence, not artificial, because it really is a program. Yeah. So those are a few random thoughts.

00;39;15;25 - 00;39;40;17
Craig Andrews
Well, one of the things I'm saying and there's So in the marketing world, you know, especially in content marketing, you know, there's a lot of people rejoicing there saying, I'm never going to have to write another blog again in my life. I'm going to have I spin up, you know, 100 blog articles for me next week. We'll put them out there and and get them, you know, they'll get ranked and they'll drive traffic.

00;39;40;19 - 00;40;00;01
Craig Andrews
I think the important thing to remember is your competitor is thinking the exact same thing. So if you're doing that, that just means you're now at the new noise floor, like, right. The noise floor just moved. And if you went poke out of the noise, it's not going to be by doing exactly what everybody else is doing.

00;40;00;04 - 00;40;29;23
Steve Anderson
A great, and I think it's a tool, the human aspect of it. I mean, if you're not editing everything that goes that you see come out of it, you're toast. I mean, I just it's becoming easier and easier to tell people who are doing that. And then you talk about losing brand value, losing trust, losing. I mean, those are bigger issues than cranking out content.

00;40;29;25 - 00;40;45;05
Steve Anderson
And it's a I mean, I believe it solves the blank page problem. Meaning here's here's what I want to write about. Where do I start? Yeah, pretty good at that. But it's where do I start? Not where do I finish.

00;40;45;07 - 00;40;54;02
Craig Andrews
And and I use it if I'm trying to work on like a headline or something, I'll ask it. Hey, give me ten headlines that say this.

00;40;54;04 - 00;40;54;22
Steve Anderson
Yeah.

00;40;54;24 - 00;40;59;14
Craig Andrews
It helps me. It helps me get some direction. It helps stimulate the creative process.

00;40;59;17 - 00;40;59;26
Steve Anderson
Exactly.

00;40;59;27 - 00;41;15;11
Craig Andrews
But but I published two books last year, and I look at both of those books. One's a business book. One's a personal book. I don't believe I could have written either of those books, and I would spend more time writing the prompts to generate.

00;41;15;13 - 00;41;19;04
Steve Anderson
That and trying to get something out of it. Yes. Agreed.

00;41;19;07 - 00;41;20;05
Craig Andrews
Yeah.

00;41;20;07 - 00;41;45;19
Steve Anderson
Yeah. So it's a tool. It's here. We'll learn how to use it. We are learning how to use it and, it will change things. There's no question about that. But, you know, frankly, the example I've been using is, if you remember, Greg, when the spreadsheet came out that put like 400,000 bookkeepers out of business.

00;41;45;22 - 00;41;47;03
Craig Andrews
Yeah.

00;41;47;06 - 00;42;20;17
Steve Anderson
Right. We didn't need the bookkeepers anymore because we could have a spreadsheet plug in numbers and it would automatically recalculate everything. But what it did do was change the industry into an advice industry, not a numbers industry. So that I think definitely we will see is how some of those mundane rote tasks can be done, probably should be done, which allows employees to focus on what they do best, whatever that is in their particular industry.

00;42;20;19 - 00;42;21;08
Steve Anderson
Yeah.

00;42;21;11 - 00;42;36;08
Craig Andrews
Well, I'll give a very practical example to what we're doing right now. I'm working on I'm trying to create an automation so that when when I complete a podcast episode, I can feed the transcript and I and ask it to give me three show summaries.

00;42;36;10 - 00;42;39;15
Steve Anderson
Yes, absolutely.

00;42;39;18 - 00;42;49;18
Craig Andrews
And that gives me my starting point where I can break it down. It makes my time more efficient, but doesn't eliminate the human element. The human element is essential.

00;42;49;21 - 00;43;12;23
Steve Anderson
Correct. So yeah, and I think those are again, I think those are good examples. It gives you a starting point. You go in and put your voice on it and all those kinds of things. But those are just I think those kinds of examples are being multiplied out as people are coming off the hype cycle and starting to look at it as a tool.

00;43;12;23 - 00;43;16;09
Steve Anderson
And how can we use it and where should we use it?

00;43;16;12 - 00;43;50;02
Craig Andrews
Yeah. Well, Steve, we've run into a problem. I knew we would run into. We've barely touched your book. I mean, we've covered one aspect of your book we haven't even talked about your your other company kind of it. And, and I know we could talk for another 2 or 3 hours. This has been fascinating. so I guess where we are right now, tell us a little bit about your company, Catlett and I apologize for not getting into more details on your book, because frankly, what you just covered, I think was so valuable.

00;43;50;02 - 00;43;57;07
Craig Andrews
If people just take that and focus on that, I think they need to buy your book and then take the next principle and start working on that.

00;43;57;14 - 00;43;58;15
Steve Anderson
Yeah.

00;43;58;18 - 00;44;00;22
Craig Andrews
Yeah. But tell me a little bit about Catlett.

00;44;00;26 - 00;44;33;17
Steve Anderson
What does Catlett and again, it's, you know, picking a company name is interesting, but catalysts for change it at the end for technology. So Catlett and basically it's, it's a company I started and founded with seven other state insurance agent associations. They invested in the company to help solve a problem for their members, which was having trusted technology advice and resources and information.

00;44;33;19 - 00;45;00;18
Steve Anderson
And so we now work with 23 different state associations for on behalf of their members. And we provide advice on the technology that they should be using, how to select the right platform for their needs. And it covers, actually, we have about 25 different categories of technology. So social website, database systems, you know, all kinds of different areas.

00;45;00;20 - 00;45;21;23
Steve Anderson
And we gather information about the vendors that are out there and write reviews about their product, all to service agents and help them manage, their technology to maximize it and to help them with efficiency and profitability.

00;45;21;25 - 00;45;46;26
Craig Andrews
That sounds awesome. I think, you know, anybody in the insurance industry that's listening, you need a person like Steve in your life, you know, and I think that's, and that's what we're talking about. You bring together two types of thought that, you know, from different sides. The, you know, the let's take risk and let's avoid risk. And you bring those two thoughts together.

00;45;46;26 - 00;46;01;01
Craig Andrews
And, and I think that's one of the keys to your success. And so I do hope people reach out to you. I hope people get your book. obviously a lot of wisdom there. I'm sorry we don't have time to cover more details of it.

00;46;01;04 - 00;46;15;01
Steve Anderson
Well, me too, but, I understand there's, again, lots of principles, lots of information. took a couple years to write it, and so, but I'm glad we were able to go over what we did.

00;46;15;04 - 00;46;17;14
Craig Andrews
Well, thanks for coming on, Leaders and Legacies.

00;46;17;17 - 00;46;21;23
Steve Anderson
Greg, I appreciate it. Thanks for having me.

00;46;21;23 - 00;46;50;19
Unknown
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00;47;14;05 - 00;49;24;19
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