Secrets of successful strategies: How Amazon, Apple, Microsoft and others make winning bets

Twenty-five years ago, more than a decade before the debut of the iPhone, a different piece of technology had people lining up outside stores around the world: Microsoft’s Windows 95.

“Everything was mayhem,” recalls Brad Chase, the former Microsoft executive who was in charge of marketing the operating system. “This was the product that ended up ushering computers and Microsoft and arguably Bill Gates into the mainstream. Everybody wanted to know everything about it.”

“One time I even went on press tour and tried to calm everybody down because I wanted them to know Windows 95 would not solve world hunger,” he jokes.

But beyond the sheer hype, Windows 95 was the culmination of Microsoft’s strategy — the company’s bet that there would be a market for a computer on every desk and in every home (and running Microsoft software, executives would add privately.)

Chase explores the ingredients of successful business strategies in his new book, “Strategy First: How Businesses Win Big,” published today, with examples from across the world of business and technology.

On this episode of the GeekWire Podcast, Chase analyzes the strategies of today’s tech giants, explains the components of effective strategies, and talks about the role of strategy in addressing challenges facing the world (a topic he also explores in this column on how companies can advance racial justice.) As a bonus on the podcast, he tells the inside story of how he struck the deal with the Rolling Stones to supply the iconic track for the Windows 95 advertising campaign.

Listen above, subscribe in any podcast app, and read on for edited highlights. 

How do you define strategy?

Brad Chase: Strategy is your plan to compete. And your plan to compete is all about making bets. We all make bets every day. Strategy is about making those bets in order to compete effectively. Any strategy is comprised of three key components. The first is customer value, the second is market potential, and the third is execution, how you run the business every day.

I riff off of the famous equation, arguably the most famous equation in the world, Einstein’s E = mc². But in my case, the ‘Strategy First’ model is E x mc². And that’s to help you remember that the three key components are, E for execution, M for market potential, and C for customer value, and the C is squared, because in most cases, customer value is the most important thing. And one last thing to remember is that your strategy only matters relative to the competition.

How do you create a winning strategy?

Chase: Try to have the best customer value you can relative to competition, execute well, and pick a market where you think there’s good market potential. … I have five key tips that people can use to help build those winning strategies:

1. Seek change. Change is always a strategic opportunity. (Example: Netflix capitalizing first on DVDs by mail and then the shift to video streaming.)
2. Mine the gaps. Whenever you are in a business, there may be opportunities because certain companies don’t provide enough customer value, or they don’t execute well. (Example: Uber and Lyft offering a superior user experience to traditional taxis.)
3. Expand the universe. Grow new businesses through acquisitions, new customer sets and new products.
4. Adapt to the tides. That’s how you deal with all the external factors. COVID is a great example. It’s actually more than a tide. It’s like a tsunami.
5. Build tall walls and climb short walls. Earn customer loyalty. Create a great ecosystem of products. Find low barriers to opportunity.

When you look at the strategies of today’s tech giants, such as Facebook, Amazon, Microsoft, Google or Netflix, which companies today stand out as textbook examples of the formula?

Chase: They all have done amazing things. So let’s talk about Apple as an example. One of the things about Apple that’s impressive is they have innovated a lot, and then they have built a lot of tall walls. … It’s really hard if you’re an iPhone user to switch because you use your AirPods, and you use FaceTime and you use Apple text messaging.

With Amazon, how many companies can you think of that have built two big bets in two very different businesses? Amazon Web Services is a great product. Microsoft is doing a good job with competing with them with Azure, and those are the two main players in the game, but AWS is still the leader and they’ve done a great job. And then, of course, the core e-commerce business. If you think about the customer value, you get your products quickly, the prices are good, their market potential is huge. They’ve just done a great job.

Is there a way for political leaders to look at the world’s challenges through the lens of strategy?

Chase: The answer is yes. …  We’re at a time where there’s greater awareness of the challenges of COVID on business and life. There’s greater awareness, due to the horror of George Floyd’s death, of the history of racial oppression in our country. … Politicians could learn a lot about how to internalize voters’ frustrations about those things. … If they don’t address those things, and they’re tone deaf about those things, they will not do well. … What’s the value you’re going to provide your voter? … The model works very well in a political environment.

I also think that this might be a milestone moment: we might see that customers care more about buying products from, and being associated with, companies that are doing better for moral good. We’re coming to that time where companies will have to broaden their perspective and contribute more to the greater good and to their communities.

“Strategy First: How Businesses Win Big,” by Brad Chase, is published by Greenleaf Book Group Press, with a foreword by Microsoft CEO Satya Nadella.