Pete Sauerborn, eCommerce CEO and Board Member, (ex-Amazon, ex-McKinsey),

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In this episode, Chris is joined by a friend, former colleague, and mentor from his time at Amazon Marketplace, Pete Sauerborn.

Pete is a seasoned eCommerce leader with impeccable credentials: a VP at Amazon Marketplace, an MBA from Chicago Booth, stints at Apple and McKinsey, and owner of a $300 million P&L at Teleflora.

But what sets Pete apart is his customer obsession. That’s a buzzword, for sure, but there is no better phrase for what guides Pete.

You’ll hear how Pete’s obsession with serving his customers led him to uncover stories at Amazon about real people that didn’t show up in the data. These stories ran counter to the narrative that Pete and his team were using to run the business—and ended up redefining the future of Amazon Marketplace.

Chris and Pete explore:

  • The path that took Pete from reviving his brother’s failing paper route as a kid to growing Amazon Marketplace from 15 people to 4,000
  • One of Pete’s biggest failures as a leader at Amazon
  • How writing Amazon’s famous 1-pagers and 6-pagers forces an intense clarity of thinking
  • Why pain is necessary for business transformation
  • The time Chris turned himself into a robot

And much more!

009 Pete Sauerborn: Amazon, Customer Obsession & the Stories That Aren’t in the Data

Pete Sauerborn 00:01
And now you have to say, What's the new story? What's the new vision? And how do you evolve the thinking of the team and stakeholders to that vision?

Announcer 00:11
Welcome to The Storied Future Podcast with Chris Hare, a show that provides the knowledge and inspiration C-suite leaders need to shift the future. Hear from experts, innovators, and purpose driven leaders who have harnessed the power of strategic narrative to create lasting change.

Chris Hare 00:28
Hi, and welcome to The Storied Future Podcast. I'm Chris Hare, and I'm glad you're here. Each episode I talk to C-suite leaders, experts, and innovators who have created strategic narratives that change minds, change behavior, and change the future. In this episode, I'm joined by Pete Sauerborn. I first met Pete on March 23rd of 2013, at 6:30am, for breakfast in Seattle. Who requests a meeting at 6:30am? Apparently, Pete does. At that time, Pete was the general manager of Amazon Marketplace where he eventually rose to the rank of Vice President. I’d just received an offer, and we were meeting to get my comp package across the finish line. I liked this guy right off the bat. He was kind, he was whip smart, and he believed in the power of storytelling to change a business. Of course, having a meeting that early in the morning should have been an early warning sign of the level of intensity that this guy brings to work. And I'd be lying if I said I wasn't somewhat intimidated by Pete. He had all the credentials. He earned his MBA at Chicago Booth. He worked at Apple, put in his time at McKinsey, and owned a P&L for a $300 million business at Teleflora, and on and on the list goes. But what set Pete apart is his customer obsession. I always hate to use buzzwords and phrases, and customer obsession is very buzzy indeed. But there is no better phrase for how Pete leads. In this episode, we talk about how his obsession with serving his customers led him to uncover stories about real people that didn't show up in the data, stories that ran counter to the beliefs that Pete and his team had about the market, stories that shifted the entire narrative he and his team believed about their business, and stories that transformed the entire future of Amazon Marketplace. We talk about Pete's path that took him from reviving his brother's failing paper route as a kid to eventually growing Amazon Marketplace from 15 people to 4000. We explore one of Pete's biggest failures as a leader at Amazon, and how that transformed him; how writing Amazon one-pagers and six-pagers forces an intense clarity of thinking; and finally, we talk about why pain is often necessary for transformation. Let's dive in.

Pete, welcome to The Storied Future Podcast.

Pete Sauerborn 02:51
Chris, thanks for having me. Super excited to do it.

Chris Hare 02:55
Let's start out. You and I met at Amazon. But I want to go back long before that. Let's start with your early days. I'd love to know a little bit of what you were like as a kid. And then how did that kind of shape your eventual journey into business?

Pete Sauerborn 03:08
Well, let’s see. I was born in the late 60s, mid 60s, in New Jersey, and raised in a, you know, my dad's German, mom's Irish. So, I'd say kind of a traditional Catholic East Coast upbringing. I was number two of four kids. I guess my thing from an early age was I just had sort of a bit of I'd say a work ethic or just like intensity in terms of, I would overcome obstacles with just determination and work, not necessarily skill. So, it didn't really have the finesse or the skill, but just would apply myself. That was kind of my thing. So I remember one of my early stories, my brother, a great guy, but he was a bit more athletic and focused on his baseball, and he had a failing paper route. I was, like, eight years old. I took it over, doubled the circulation, and then took another paper route. So I really started applying myself and working and building up, you know, those sort of things at a pretty early age. So it's something I reflect back on sometimes.

Chris Hare 04:13
That's really cool. And then what ultimately took you to, like, what path did you go down in college? And then eventually, how did that take you to business school?

Pete Sauerborn 04:22
Well, when I first went to college, you know, I honestly didn't know what I wanted to do. I initially started as an aerospace engineering major at Cal Poly. And it wasn't as sexy and exciting as I thought it was going to be in terms of the mechanical engineering aspects. And I really kind of started to get more excited about business and the legal profession. I was really curious. So anyway, I changed majors. I took a double major in economics and English. I did a six-month internship with this top law firm in San Francisco and really kind of got a feel for what corporate law looks like. And I realized I didn't want to do it after about six months of that. And then I did another internship in 1987 at Apple Computer. And that was really exciting. It was during a period of time when Apple was going through a struggle, as many people know, in the history of it. But nevertheless, it was super exciting energy and Silicon Valley and technology and business to kind of where those come together. It's just got me super fired up and excited.

Chris Hare 05:28
Yeah, and I know after college, you went to McKinsey. What was that experience like for you?

Pete Sauerborn 05:32
Actually, what I did is after college, I worked in Silicon Valley for four years at 3Com, and 3Com was early days of the data networking. And so prior to what we think of as the public internet, you know, it was back then it was there was no graphical browser, it was really about the plumbing. And you could send emails across this thing called the internet, but it was, you had to know what you're doing. And so I did that for four years. I decided to go back to grad school to get an MBA. And so I went to the University of Chicago, which is called Chicago Booth now. And there, I studied finance and strategy. And when I left Chicago, I joined McKinsey. So that was kind of to connect the dots. McKinsey was fantastic, and a great experience. For me, it was a three-year stint, you know, very intense, very analytical. And so you get thrown into various situations as a young kid, trying to advise these clients in industry. So you really hone your analytical skills and strategic skills and working in different places and build up some confidence that you can sort of take your intellect and apply it in a certain way to try to add some value to a business.

Chris Hare 06:49
And I imagine kind of at the end of that time, there was probably a desire growing in you to be able to own something for yourself, right, versus the consulting side of things? And how did you make that transition out of consulting? If that's the case?

Pete Sauerborn 07:02
Yeah, I mean, first, you know, professional services, you're obviously supporting and trying to help add value to a growing concern to a business. And for me, anyway, I think there was a point where it's like, okay, I want to be the guy running the business, you know, not just the guy advising. And so that was a bit of a conscious decision. So, as I said, really enjoyed that experience, and really wanted to get out and roll up my sleeves and apply myself and do the work. And so yeah, so that's what I did. I ended up leaving in the late 90s, which was the frothy sort of internet bubble. And I joined a startup company, which was in the broadband space. It was a ISP for DSL, so an internet service provider to run high speed internet to the home. And that was super exciting, but it was caught up in this internet bubble. It was headed for an IPO in 1999. I think we all know the story now – that bubble burst. In our case, the IPO didn't happen. But there was a portion of the business that was providing a value-added services to businesses. It was a B2B, secure, virtual private network solution. And we saw a lot of value in that. So myself and a few others from the leadership team actually took that portion of the business out of bankruptcy and ran that business – we called that business Accelerant – for about five years, from 2000 to 2005. And then ultimately had a nice exit, a sale of that business to a larger corporation.

Chris Hare 08:40
I want to get into your journey at Amazon. So when we met, it was the first part of 2013. I remember I woke up that day, like, I was sick out of my mind with a cold. And I actually was all medicated and I almost canceled. And I remember walking in and shaking your hand and then telling you I was sick and seeing this look of horror on your face. That's like, What did I do? I already, I'd heard all the horror stories about Amazon interviews and how scary they are. I’m like, I'm not getting off on a great foot. And then I started settling down, becoming myself, and you asked me this question of how I plan to replace myself with a robot. I didn't have an answer for you. So I remember kind of pantomiming being a robot and answering in this robotic voice while I was trying to come up with some BS answer. And I guess somehow I still got the job. So something must have worked.

Pete Sauerborn 09:34
Well, actually, Chris, it's been a while since I've seen you in person. So how do I know you're not a robot right now?

Chris Hare 09:40
Exactly. I think maybe I accomplished what you had set out for me in that challenge. I remember actually telling the team afterwards. The culture at the time when I joined the team, for some reason certain people on the team were like, terrified of leadership. And I actually told them that I did that in my interview. They were like, You did what? And I was like, He thought it was funny. It worked.

Pete Sauerborn 10:02
Yeah, yeah, actually, I just want to riff on that a bit. So, I think it's fascinating that you bring it up. I think a couple of things in that interaction. One is the strategic use of humor. Even in the most intense environment, most analytical environments, there's a lot of value in that. And, Chris, as you well know, also the power of storytelling as well. So I think there's a bunch that I learned from you starting probably on that day, and then carrying forward where you kind of converge this sort of heavily analytical and automated perspective together with the humanistic storytelling. And that's where the power is. I’ve come to believe that anyway.

Chris Hare 10:41
I really appreciate that. I actually, it was funny, because I actually made it my mission after that, and some other conversations with the team of like, I'm going to have fun, and I'm going to help shift the culture on our team. Because there was nothing, I don't think there was anything you were doing, like you were you. And I'm like, No, Pete likes to laugh. He's a human being. And let's make this part of what we do, right? And so yeah, as much as possible, I tried to push that at least a little bit.

Pete Sauerborn 11:05
Yeah, well, first, I would say I remember when I first joined, I felt at home in a sense. I felt a great fit. I remember reading that, you know, famously, Jeff Bezos wrote his first letter to the shareholders. I think it was 1997, or something like that. And the gist of it, at least one of the big things that I took away, was two things. One is the intensity of the customer obsession. And then from a financial perspective, the focus on long-term free cash flow over short-term financial measures, such as quarterly earnings. And it was sort of bucking the pressures and the trends that you would typically see in a big corporation. And so I kind of fell in love with that as a framework. And then I really tried to learn the culture. And Amazon has a very unique culture, and I tried to apply that in everything I did. And, frankly, there's a lot of learnings and a lot of mistakes along the way. I started with a relatively small team as the General Manager for the marketplace. And it was still in the investing and building phases back then. I joined in 2010. And I started with, I think, 15 team members on my team. And then by 2020, when I left, I had a team of 4000 people in, like 13 different countries. And it was really about, you know, how do we scale the marketplace and create a, I like to think of a Win-Win-Win, you know. A win for the customer, a win for the seller, and of course, a win for the shareholders as well. So, you know, I think if I reflect back on the robot comment, you know, the gist of all these things, in part of the culture at Amazon, was really about how do you start something small, figure it out, and then scale it with automation? And that's where the robot piece comes in, you know? And so almost everything that we would do, and that I would do, I would always try to think is, can it be really, really big? And if so how are you going to scale it to that level? And so always having that in mind. And so it's okay to start very small, hands on, scrappy, process for using spreadsheets, or some kind of manual process, as long as you have a vision to how it can be big and then how you're going to automate.

Chris Hare 13:26
And I think what's interesting is the pressure inside most businesses is because of, as you're alluding to, that short-sightedness of what are you producing this quarter, right? And it leads to poor decision making, right? How do you balance that where you're kind of building for the long term? And it seems like you had permission to do that. But you're also having to deliver results every single day. How do you stitch those two things, that seem at odds almost, with each other?

Pete Sauerborn 13:56
Yeah, yeah. I mean, it's interesting. I think, in some aspects, it becomes even easier to do as you become more senior, because you can almost think of it as a bit of a portfolio. But I think that another way of saying it is, you have to move the needle on the metrics in the business in the short-term, and earn the right to start to influence the evolution of the business for the longer-term. And so probably easier said than done. But I do think being conscious and aware that you’ve got to, however you want to characterize it, pay the bills, and make sure you have enough in your portfolio that's delivering in the short-term, while starting to bring out insights and highlight areas that you can point to to say, we need to evolve this way of thinking or this process or this metric, to achieve even a greater success in the future. And demonstrate that you can do those things. I can say walk and chew gum at the same time.

Chris Hare 14:56
Yep. The thing I loved about Amazon is that a good idea can come from anywhere, right? But Amazon is well known for one-pagers and six-pagers, right, for communicating ideas. It really struck me the first time I presented a paper to you, because I was used to working with other companies that will remain nameless, where you spend weeks on something or months, and they don't even read it, right? And you read every single line, took copious notes before even talking to me, right? You read the entire thing with me in the room, right? So that level of respect for me, but also for the ideas and the process really struck me. Can you talk a little bit about the role that writing and narrative played in your leadership? And in your time at Amazon?

Pete Sauerborn 15:39
Yeah, yeah. So I think a couple things on the written narrative. One, turns out about half the people are sort of introverts, half are more extroverted. And in a culture, in a corporate culture, you can get great ideas from both introverts and extroverts, but you need an equalizer. And so in some aspects a written narrative equalizes that. The other thing about it is it really, to write a coherent sentence, and then put a few sentences together into a coherent paragraph, and then put a few paragraphs together into a document, it's quite challenging, and it really forces a very intense clarity of thinking to do it. And so the completeness of the thought is so much greater. And then I think, within the culture, then being able to really sit, interpret, understand where is person coming from, and crystallizing the idea. And then disseminating that idea to a broader team to do it, to implement it, to scale it up, to make it happen. To hire the team, or whatever it may be. It's an incredibly powerful tool.

Chris Hare 16:45
Can you talk a little bit about what your greatest failure was at Amazon?

Pete Sauerborn 16:50
Well, there's one that comes to mind. It was kind of an early-ish, mid part of my tenure. And I took over responsibility for, I would say, a bit of a pet project of my boss's boss. The idea was really great creative idea, which was like, How can we create automation to basically go out, identify potential sellers on the web and using other data inputs, and then prioritize them and score them in such a way that we can invite them to come launch via self-service or give them to the sales team as a lead? It was a big dream project. To be honest, I think no one had enough understanding or courage to go back and say, Hey, this is a great idea, but certain parts are not practical and other parts are. So I took that on, and busted my butt and many other people's butts for a couple of years before I would have enough confidence, understanding, and courage to come back and say, We got to change course on this. It's not working. So I guess in a sense of a failure, one, the failure was the vision wasn't delivered in the way that it was originally articulated. And two, I learned that I should have, and could have, stopped wasting time sooner in that process, if I had enough confidence and experience.

Chris Hare 18:10
And was that all, I mean, it's definitely very analytical, but at the same time, do you recall how it might have hit you, like, at the emotional level?

Pete Sauerborn 18:18
Well, yeah, at the emotional level, I thought I was gonna get fired. I guess I would say maybe the word is scared. Is that an emotion? I mean, stressed, scared. And so then you're not operating in your most optimal way, as a leader, and as an employee.

Chris Hare 18:37
But then what does that do for you, though, when you're not fired, right? That obviously says something about, in some way, about the leader that you're working for, unless they're just like, Hey, we can't get someone to replace Pete. But no, I mean, it says something that you're able to stay on and continue after a failure, right?

Pete Sauerborn 18:54
Yeah, that's right. I think two things. One is, obviously you're adding enough value in other places where it makes sense to keep you, I guess, in some ways. But also, it's a cultural acknowledgement that we’ve got to try really ambitious things, and some of those things are going to fail. And so as a leader, in this case, my boss's boss was aware enough to say, Hey, this was a really risky and challenging thing and it didn't work out. That's okay. Let's close it up and move on to the next thing. And so I think, if you want to have really big achievements, you've got to embrace failure as a potential outcome.

Chris Hare 19:31
You know, it’s funny. After the Fire Phone flopped, my buddy, after that, we were commuting to work at Amazon one day and he says, Chris, you do know what the Alexa is, don't you? It's all the stock of the Fire Phone. They just threw it in a tube and put a speaker on the end of it. The biggest lesson that stuck with me from my time working with you was around customer obsession. It transformed how I work, right? I credit that lesson to most of my success since then. So I'd love to understand just a little bit about what that looked like and how you specifically applied that in your work.

Pete Sauerborn 20:16
Yeah, yeah. Well, as I said earlier, when I first joined, one of the things that really spoke to me about the culture was this idea of customer obsession. And I really took it to heart and applied it. And partly, I think, in reaction to some of my past experiences where the financial results are more important than the vision of delivering value to the customer and other organizations. And so coming to Amazon was this really, incredibly freeing concept to really obsess on the end consumer first, right, and to make sure that we deliver a great value for the end consumer. And to apply that same frame of reference to the seller. What I found was, in a large organization, when you have hundreds of 1000s of sellers and millions, I think now billions, of SKUs, you know, different products and different geographies and so many different angles, it can become very easy to operate with large numbers and averages. And so what I found was, the beauty and the insight comes from combining hands-on anecdotes together with big data. And that's where you get really interesting insights. And so I would, to your point, personally tried to spend time directly with sellers. I had a bit of a, I guess you’d say, a Rolodex of sellers that I first establishing trust with, got to know them a bit. And when we were bouncing ideas around, or I had, basically, I think it was a panel of people, I could quickly email with trust and get a quick response: how a program is going or what do you think of this idea. And I could quickly bring that anecdote, that seller perspective, together with some data and some program ideas, and accelerate things much faster that way. So that's how I've thought about it. And it's something that stuck with me. And not everyone is comfortable doing it. So they need a bit of a push. But the organization is so much more powerful when everyone is talking to customers.

Chris Hare 22:19
Can you talk a little bit about how you applied customer obsession?

Pete Sauerborn 22:23
One of the things that was fascinating to me was that what I observed in the organization was there was a perception of what a prototypical seller was: a reseller of branded products. And I think it came from the original days, Amazon retail was selling books and sellers were selling used books, and then that extended to music and video and DVD. And so this mindset of, hey, a seller is a reseller, and a brand owner is a vendor to our retail business, was pretty well established. And so then people, when you take that, and then you start operating with large numbers, you miss something. I remember, I invited some sellers to come to an all-hands meeting so I could interview them and just get closer to customers. To be honest, I had no idea what the plan was, there was no plan behind it. It was more just like, let's talk to real sellers to see what they say. My favorite discussion with a seller is, Hey, tell me how did you get into this business? How did you start? Like, tell me the story. And the stories, everyone is unique. But I find it incredibly fascinating to hear these entrepreneurial journeys. One of the sellers that I interviewed that day was Bernie Thompson, who's the CEO of a company called Plugable. He was an engineer at Microsoft. And at home, he was having trouble plugging in all the kids’ phones and devices to charge up and was looking for some sort of a USB hub to recharge devices, and he couldn't find quite what he was looking for. So he turned that into a business idea. And so fast forward, by the time I was talking to Bernie, he now had a business. He had nine employees, but he sold his products in seven different countries. And he was 100% selling and fulfilled by Amazon. And the way he described it to me is, because Amazon's handling the logistics of the selling piece and the fulfillment piece, I can focus all my energy and all my team's energy on the product innovation and the customer service part. And so I can scale in a very different way. And so this in my mind was clearly, Bernie was a brand owner, not a reseller. And then as I further inquired and talked to more sellers, I realized there's an entire group like this, but there was no place in our database that would tell us what percentage of sellers, what number of sellers, what amount of SKUs, what amount of revenue comes from brand owners versus resellers? And it's an important question, because there's so many things you can do, way to support brand owners differently, create more value for them and more value for consumers. So that was, like, I felt like I found a little nugget of gold, but no one really knew about it. And, I mean, people had a general idea but didn't quite know what to do with it. And so taking that idea, we built out a whole set of new programs for brand owners, new marketing options and tools of brand registry, brand protection services, etc. So it became a really big part of the business. And it also had a lot of implications for big strategic conversations about, How do we think about vendors versus sellers and marketplace versus retail, etc.? So, to me, it was like, Wow, that's a good reason to be customer obsessed. And it's a really good reason to get out from behind your desk, stop looking at the data and the metrics for a minute, and actually hear the story. And then think about that story, that inspiration, and say, Where can I see that in my data? And then realize you can't see it in your data, because you haven't thought about it that way and re-construct your data in some way to illuminate that. So that's probably one of my big inspirations on customer obsession.

Chris Hare 26:14
Things are clicking as we're talking because you and I went out for breakfast before I accepted my offer. And I remember you talking about how excited you were about storytelling. But understanding it in that context and where you are seeing it going? That really kind of closes that loop in my brain. One thing I'd love to click into a little bit, as you talked about, I think you said something like 25% of fulfillment by Amazon was coming out of Brooklyn at a certain time. Is that right?

Pete Sauerborn 26:40
Yeah, don't quote me on the exact percentage, but a very high percentage of FBA revenue in the US coming just out of Brooklyn, yeah.

Chris Hare 26:50
Yeah. And then, but there was something there that led you to some of the local populations and conversations with them and that sort of thing. Do you recall about that?

Pete Sauerborn 26:59
Well, you know, yeah, there was, I'd say it's an archetype, maybe that's the right word for it, which is, what I discovered is there is a pattern. And this to me was very inspirational. A pattern of really, I guess, you say, immigration to the US. So the story was more or less that the parents or the grandparents emigrated to the US, and got into the retail trade of some sort of another. So one example I remember was a vacuum cleaner store back in the days when there was a separate store just for vacuum cleaners. And it was very successful for years. And the kids went away to college and got kind of a higher level of education than the parents or the grandparents. And as one of the kids is graduating from college, the store is starting to decline and suffering, you know, against competition, etc. And the son comes home and says, I've learned something about the internet and this thing on eBay. Maybe we could start selling on eBay and boost up the sales. And so, begins down this journey of extending the market through marketplace, in that case, eBay. And then Amazon comes along with FBA. And so the business grows even more, diversifying on Amazon. And then in that pattern of reinvention, kind of reinvigorates the family business, increases the sales. And then the next level change happens even faster, which is now Amazon's getting really competitive, and reselling vacuum cleaners is a really tough business and low margin when there's a lot of competition. But the accessories that you sell along with the vacuum cleaners have a high margin. And many of those are somewhat generic. So you could go to China, find a factory, source these accessories, etc. And now you go from being a reseller to being a brand owner with much higher margins. And so, in this all I can see these stories happening within the space of really two generations. And it went from brick-and-mortar reseller to online reseller, from online reseller to online brand owner. And this whole process of, I guess you'd say, creative destruction, or evolving the business, identifying what's working, what's not, and keep pivoting and changing what's happening right in front of our eyes. And I talked to so many versions of that story from these folks in Brooklyn, I guess, in a way, to me it was a little bit of the American Dream kind of being played out right in front of you.

Chris Hare 29:28
Yeah, and that's, I love that. It's just an amazing case for going outside the walls of the business, right? And not just looking at the data, because like you said, you would never have seen or found those stories, right? Well, I want to shift a little bit. What were some of your more painful moments at Amazon that led to transformation?

Pete Sauerborn 29:46
Well, I had a very intense leadership style, and it was probably in some ways exacerbated by the culture at Amazon, which suited my style. So I think I discovered at various times in my career at Amazon, as I was making progress, it'd be two steps forward one step back. And it took me a while to realize this, but there were cases where the team wasn't with me. I was trying to take steps forward. But because of the nature of my style, and my intensity, and maybe a lack of connection to some of the team, I didn't engender enough trust and confidence in the team to move faster. And it took, frankly, you know, sometimes being surprised, like somebody just quit and I had no idea they were unhappy. And so that was, frankly, a painful set of learnings about how to balance my style to get the most out of myself and the team in the long run, not just in short run.

Chris Hare 30:50
Yeah, so in Amazon speak, I think that would be like long-term free relationship flow, instead of cash flow, right? It's like, in order to grow the business, it's making sure that those relationships, not just with your customers, but also with the people on your team, are flowing in the way that they need to so that you can build that long-term vision together, right?

Pete Sauerborn 31:12
Yeah, yeah, that's right.

Chris Hare 31:15
That's really cool.

Pete Sauerborn 31:16
I think you know, another one, maybe, in my current experience, I don't know if you want to go there. But as the CEO of Catch.com.au, which is an Australian eCommerce marketplace, I took on that role. And it was during the period of COVID lock downs, and just the beginning of the lock downs. And so we saw tremendous growth in the business. And we were scaling up, the company had just been acquired by a big brick-and-mortar conglomerate here in Australia, they hired me to be the CEO, to really help scale it up and leverage some of the brick-and-mortar assets. Anyway, during that process, we were hiring team mostly remotely during COVID. We were scaling up the retail side of the business, scaling up the marketplace side of the business. And when you're making a big investment in the business, you're always looking for signals of, Is this working? And how do I quickly see if it's working and double down, and if it's not working, to course-correct? And in the case of, let's say, our retail buying model for that business, everything was working, because it was COVID, because people could not go to the store. So therefore, our buying model and our pricing model is working. And so it was interesting. There was a lack of pain for about, let's say, a year and a half or two year period, only to be confronted by a big pile of pain at the end of that process when people go back to shopping in the stores. And so I think many businesses probably, you know, you see this in the headlines everywhere. And there's a lot of uncertainty in customer demand patterns and shopping behaviors and so on. But to me, it was like, it was a learning of like, you can't grow a healthy business without a regular set of painful feedback to guide you.

Chris Hare 33:13
So what happened when you – obviously were not on the other side of COVID yet, right? – coming out of that boom, and then you hit that pain? How did you respond and pivot in that moment?

Pete Sauerborn 33:25
That particular one, I think, was just, it was a bit of catching up on the pain and the dynamics of the market are shifting. So it's combination of like, Hey, what did we learn? Now, we have almost discount what we thought was learnings from the prior two years that said, Hey, we believe if we buy these types of products and price them this way, then we're going to have success. It was almost like, you had the cache, to release that memory from your cache and reset your memory in the current period. So I think that's probably the biggest thing was to sort of say, What timeframes are valid for informing future decision making? And how do you make adjustments during lockdown and not during lockdown to really understand the dynamics of the business? And then, as much as possible, then how do you encode that into some system or process for the team, you know, probably starting with spreadsheets and that sort of thing, and then eventually becoming more automated.

Chris Hare 34:21
And what's kind of, you know, obviously, you have a lot of expectations from your parent company. You have employees that you need to align around this future vision. And then you need to bring customers along as well. And so what was the narrative that you put forth or that you and your team put forth, that kind of helped guide you all initially, but then through the transformation once the pain hit?

Pete Sauerborn 34:45
Yeah, so I think the narrative in a sense in this case was, we had a few things happening, right? One is, we had this we had weave some stories together, right? So you have this the founding story of the business that was already 13 years old that has been established by these founders here in Australia and was quite successful. And then you have the big, bad Amazon entering the market and scaring the heck out of all the retailers in Australia. And then you have the biggest and most trusted retail conglomerate emerging and acquiring the startup. And now you have to say, What's the new story? What's the new vision? And how do you evolve the thinking of the team and the stakeholders to that vision? So really, for us, this was about focusing. Again, I took my inspiration from customer obsession, which is focusing really like a laser on the Australian consumer, and how do we serve the Australian consumer? And then of course, from a strategic perspective, how do we leverage this great business that was founded here in Australia, and evolve to the current state, and now this new set of resources and assets that we have from Wesfarmers, from this parent company? And so the story for us was about how do we establish this really unique omni channel shopping experience in Australia, leveraging the top brands and our Australian roots, to differentiate ourselves from Amazon? How do we create something really unique and differentiated that's right here in Australia? And so this idea that, Hey, we can create some pieces of this right here and create these really great jobs right here. You don't have to move to the US and go to work for Amazon. That's very compelling.

Chris Hare 36:35
This goes back to the long-term piece. But you know, we were talking recently about when someone has the ability to kind of pattern match and see the future of a business or where a business should head. But others don't necessarily see that. So I've found myself in that place historically, I believe and imagine you have as well. And that can really be an uncomfortable and or painful place to be. How have you seen this play out over your career?

Pete Sauerborn 37:05
Yeah, a couple of thoughts here. One is sort of this idea that you can see something further out in the future, but the current day-to-day is somehow disconnected from that. And I think you got to pay the piper today to earn the right for articulating that vision for tomorrow. So there's some aspect of that to think about in your portfolio of work and effort. I'd say another piece is you need to be talking to the right people at the right level. There are times when, for whatever reason, that your boss or your stakeholder is the wrong audience for that message, and you need to get to that more senior person. This could take all different forms. It can be your boss's boss, in one aspect. It could be you need to talk to the CEO, or it could be you need to talk to the Board of Directors, or in some aspects, you may need to influence the investors, too, in some way. So there's many different stakeholders. And, you know, I think, if you're not positioned correctly, be smart enough to move on and get yourself in an environment where you are connected to the right stakeholders, so you can have that influence.

Chris Hare 38:11
Yeah, I think that was a big learning for me at Amazon where, in terms of the leadership principle “Think big”, that was a sweet spot for me. But at the same time, when you present the big vision, people don't necessarily see it. And so I had that happen once and it wasn't accepted. But then I pivoted to do the smallest version, the pilot, like you said, the smallest version possible. And people were like, Oh, this really works. I was like, yeah, I know, it does work, right? But that's something that I've taken with me is, I use the “Think big”, I don't neglect it. And so I give the big vision. But then I say, here's this little tiny way that we can get started and start delivering impact, and then scale that when it's working, right?

Pete Sauerborn 38:51
Yeah, one of the most rewarding things that I had, if I reflect on my experience at Amazon, was having such an innovative and diverse team, and then being surprised by some of the things that the team does. It felt very uplifting as a leader to kind of be surprised on the upside by a really cool idea that you could quickly get behind and resource. It almost felt like cheating, in a way. And to me, that was a reflection of that strong culture and alignment of the different team members.

Chris Hare 39:25
Awesome. Well, thanks so much. I really appreciate you joining the podcast.

Pete Sauerborn 39:29
Hey, Chris. It's great to connect. You've been an inspiration to me, so I appreciate what you're doing.

Chris Hare 39:36
I often keep the outro of the podcast serious, but today, we're gonna keep it light. I have a lot of favorite Pete stories, but my favorite took place one Friday afternoon at 1pm. Pete was in a war room with VPs and other leaders from across the globe, working to write the six-pager for our SVP that put forth the case for a new approach that would transform the marketplace business and the customer experience. Pete stops by my desk and says, Chris, do you have Photoshop on your computer? I need your help. It should only take a few hours. Sure, Pete, but you know, Matthew right here next to me is an art director, right? I have the software, but he has the skills and the training. His response? Nah, you've got this, Chris. I had recently won a hackathon. And part of my idea had been rolled up into the strategy, and they wanted me to come help them visualize the customer experience. Keep in mind, I had zero training in design. I walk into the room, and Pete gives me my marching orders: Chris, we want you to design a brand new customer experience. And we need this to look customer ready, like the rest of the Amazon site. Oh, also, we need you to design this for desktop, Fire TV, tablet, and mobile. And we need you to build the entire experience across multiple states, meaning going several clicks deep. For context, if you're not in this world, this is something that would probably take weeks for an entire team. So a pretty crazy ask. At 1am, I finished the last comp and fired them off to everyone in that meeting. I pulled off a miracle. It looked good. It looked like an actual product. And I had a feeling this was gonna get me a whole lot of praise, and probably a promotion. The adrenaline was still pumping as I went to sleep, imagining the career transforming accolades that Pete and the leadership team would heap on me over email the next morning. Sometime Saturday morning, I cracked open my inbox to a single email from Pete with what I believe was just two sentences. This is great, Chris. Now, can you please design XYZ pages as well? Well, X, Y, and Z would have taken an entire day, if not the entire weekend. In that moment, I had a choice: Suck it up and do what Pete was asking and lose the rest of my weekend, or go to an Amazonian’s best friend, the company's famous leadership principles. And the principle I picked? “Have backbone, disagree, and commit.” I took some time, I mulled it over. And I eventually responded to Pete and all of those VPs, not without some nervousness. And here's what I wrote: Thanks, Pete. I think what you actually need is an ecosystem slide showing how you can connect all of these experiences together. Here it is, have a great weekend. Apparently that did it. Because my inbox was peaceful for the rest of the weekend. Oh, Pete, thanks for how hard you pushed me. And thank you for everything you taught me. Sure, we had some great wins that were reflected in the data. But it's the stories that changed me. It's the stories that changed you. And it's the stories that changed the impact we had with our customers as an organization. And that's it. Until next week. Thank you for joining The Storied Future Podcast. Please subscribe, leave us a review, and be sure to visit TSFpod.com for more information about Pete Sauerborn, Show Notes, and to check out other episodes.

The Storied Future Podcast is a production of The Storied Future, LLC, produced and edited by Ray Sylvester, audio engineering by Ali Özbay, logo design by Evan MacDonald, theme music by The Brewz. Your host is me, Chris Hare. Learn more about our work helping leaders create great B2B narratives for a change at www.thestoriedfold.wpengine.com.


Pete’s LinkedIn

Pete Sauerborn is an eCommerce executive and board member with more than 30 years of experience. He is a student of mindful leadership who’s passionate about building automation and management practices to scale large businesses.

Most recently, Pete was the CEO of Catch.com.au, a leading eCommerce marketplace based in Melbourne, Australia. Under Pete’s leadership, Catch expanded its leadership team, doubled revenue to $1.1B, launched new automated fulfillment centers, and expanded its shopping subscription program incorporating the largest physical retailers in Australia.

Prior to Catch, Pete spent a decade leading the scaling of Amazon.com’s Seattle-based 3P Marketplace business from $15B to over $200B, by developing a culture of technology, self-service automation, and a big data machine-learning approach. He identified the trend of direct-to-consumer (D2C) brands selling online and spearheaded the development of new programs to help D2C brands grow and thrive on Amazon.

Early in his career, Pete was a consultant at McKinsey & Co based in Los Angeles. He earned a BA from Cal Poly in San Luis Obispo and an MBA with high honors from the University of Chicago Booth School of Business. Pete is a non-executive board director of Trademe.co.nz, the largest online classifieds and marketplace in New Zealand.