Jeff Bezos explains how creating the Echo was a huge risk for Amazon that was worth taking

Amazon's Echo smart speakers and its voice assistant Alexa were not a sure thing when they first debuted back in 2014.

A small speaker with built-in microphones, connected to the internet, that lives in my house? No thank you!

That sentiment is far from normal nowadays; over 100 million devices with Alexa built in have been sold in the last five years. It is another hugely successful product from Amazon, alongside the Kindle and Amazon Prime.

But in 2013?

"No customer was asking for Echo. This was definitely us wandering," Bezos said in his annual letter to shareholders. "If you had gone to a customer in 2013 and said 'Would you like a black, always-on cylinder in your kitchen about the size of a Pringles can that you can talk to and ask questions, that also turns on your lights and plays music?' I guarantee you they'd have looked at you strangely and said 'No, thank you.'"

That high risk mentality is crucial to Amazon's strategy.

As Bezos put it in the letter: "As a company grows, everything needs to scale, including the size of your failed experiments. If the size of your failures isn't growing, you're not going to be inventing at a size that can actually move the needle."

In the case of the Echo and Alexa, a major failure with the Amazon Fire phone was turned into a major success with the Echo and Alexa.

"Development of the Fire phone and Echo was started around the same time. While the Fire phone was a failure, we were able to take our learnings (as well as the developers) and accelerate our efforts building Echo and Alexa," Bezos said.

Over 100 million devices later and that pivot was a massive success.

Read more from Jeff Bezos' 2019 letter to Amazon shareholders: