Amazon’s Working Backwards approach, also known as PR/FAQ, involves starting large initiatives by writing a press release and FAQ document to succinctly express its value from a customer-centric perspective; evaluating and iterating it with leadership critiques; and finally working backwards to establish how to deliver on its promise.
THE PRESS RELEASE.
The Press Release (PR) imagines a successful launch and captures the customer value or ‘so what?’ in a single page. It must quickly outline how the product is faster/ easier/ cheaper for a customer pain point in plain English. The main elements of the PR include:
THE FAQ AND VISUALS.
The FAQ provides details about the approach, addressing key issues from an external customer perspective and exploring the economics, risks and challenges from an internal business perspective. The external questions are practical things that customers might ask including how it works and how to buy it.
The internal questions typically include an analysis of consumer need and Total Addressable Market (TAM), or the potential market for the product. Questions to establish this are:
How many consumers have this need or problem?
How big is the need?
For how many consumers is this problem big enough that they are willing to spend money to do something about it?
If so, how much money would they be willing to spend?
How many of these consumers have the characteristics/capabilities/constraints necessary to make use of the product?
The internal section of the FAQ also has a Profit and Loss (P&L) outline, answering questions about the per-unit economics; the expected gross profit and contribution profit; the rationale for the price point; how much investment will be required upfront etc.. This section would also address broader questions around dependencies and feasibility.
While not always included, there is a preference towards including mockups and wireframes in the appendix of the document to preview the customer experience. The idea is to match the prototype fidelity with the maturity of the idea. In Amazon’s context, it would typically involve previewing the experience from the landing page to purchase point, and perhaps even delivery.
Once created, the PR/FAQ documents are critiqued by leadership meetings. These start with everyone reading the document to themselves, then move onto high-level feedback before working through each paragraph to challenge, identify gaps, and provide detailed feedback.
While many PR/FAQ documents are iterated and improved, most are never developed let alone see their product launched. Advocates see this as a 'feature rather than a bug', explaining that upfront investment in ideas promotes innovation and customer-centricity. Indeed, Bezos was known for pushing ahead with some projects even with unanswered questions, if the perceived TAM and rewards were large enough.