Small-Biz Lessons From the Kindle's Success

When Amazon(AMZN Quote - Cramer on AMZN - Stock Picks) debuted its Kindle electronic reader last year, a few high-profile fans signed on (thanks, Stephen King!).

But the overall reaction was doubt mixed with defensiveness: How dare Amazon try to replace paper books with a soulless machine! How could squinting at a computer screen possibly compare to curling up with a favorite novel?

Launching the Kindle was a big risk for Amazon, and it looked like it might not pay off.

Until this week.

A few days ago, Citigroup analyst Mark Mahaney estimated that Amazon will sell almost 400,000 Kindles this year -- twice as many as analysts previously expected. By 2010, he predicted, the Kindle and associated electronic book sales would be a $1 billion business, which was enough to send Amazon stock shooting higher.

Amazon has been counted out before, but its willingness to take risks may be what keeps the company coming back. If you're wondering whether to launch a new product in the current, shaky marketplace, the Kindle offers a lesson in how to appeal to design-conscious customers while bringing in new revenue streams.

Sure, Amazon's got a wealth of technical know-how that's out of reach for most small companies. But no matter what your size or industry, you can follow the same model when launching a new product.

Here's what Amazon did right:

1. Think User-Friendly

Too often, gadgets are designed to show off a cool new trick that the engineers came up with, but leave the average user stymied. (When's the last time you read the entire manual that came with a new cellphone or video camera?) The Kindle was designed to replicate, as closely as possible, the experience of reading a book -- without flashy graphics or other distractions.

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