For couple of years now it was clear to me that Alexa was not working as a product and a business.
My reason was among all the 30 people around me who have Alexa devices, none of them actually use it. Even for once or twice a week. The few who do only seem to use it for turning on/off lights or music.
So why did we all including Amazon employees think it was a success, or atleast the Superbowl ads with Jeff made it seem like it was a huge business success.
Why did we all think it was a success? Because a lot of Alexa devices were being sold. Not enough to justify a $10B spend, but enough to keep making us think that its a worthy pursuit.
The sales of Alexa devices are misleading because if you have a website with 100M shoppers and you give away a gadget with futuristic features worth $50 for $20. Then a lot of those 100M shoppers will buy it to give it a try or gift it. And Amazon made sure Alexa devices were dead cheap in sales events in the last five years.
I think an analysis of organic vs inorganic sales will reveal if Alexa devices ever had a product market fit.
I don’t have metrics to back it up, but Alexa is a business failure that no one in Amazon leadership wanted to point out internally.
Will this be end of Alexa?
I don’t think so. I think even with recent layoffs and budget restrictions Alexa as a product will exist inside Amazon just like Bing exists in Microsoft. But the flashy spending will stop inside the org. The management will be forced to scale linearly with the business they will be generating rather than pushing more hardware products out for experimentation. The approach will change but the product will persist and evolve.