Bezos’ $1,000,000 Letters
Once a year, the world’s richest man takes time away from running the most successful business in the world to share the insights into what has made them both successful.
These insights are encapsulated in the annual shareholders letter that Jeff Bezos crafts for Amazon.com’s owners, and I’ve been taking this last week to read all twenty-one of them.
I’m deviating from the usual article this week to share what I consider to be the “Top 10” insights that struck me as particularly interesting and consequential.
I think you’ll agree.
Top-10 Insights
#10) “We use the term customer experience broadly. It includes every customer-facing aspect of our business…The customer experience we create is by far the most important driver of our business.” (2003)
#9) “There is no rest for the weary. I constantly remind our employees to be afraid, to wake up every morning terrified. Not of our competition, but of our customers. Our customers have made our business what it is, they are the ones with whom we have a relationship, and they are the ones to whom we owe a great debt. And we consider them to be loyal to us – right up until the second that someone else offers them a better service.” (1998)
#8) “We know our success will be largely affected by our ability to attract and retain a motivated employee base, each of whom must think like, and therefore must actually be, an owner.” (1997)
#7) “I believe high standards are teachable. In fact, people are pretty good at learning high standards simply through exposure. High standards are contagious. Bring a new person onto a high-standards team, and they’ll quickly adapt. The opposite is also true. If low-standards prevail, those too will quickly spread. (2017)
#6) “One advantage…of a customer-driven focus is that it aids a certain type of proactivity. When we’re at our best, we don’t wait for external pressures. We are internally driven to improve our services, adding benefits and features, before we have to. We lower prices and increase value for customers before we have to. We invent before we have to. These investments are motivated by customer focus rather than by reaction to competition.” (2012)
#5) “Working backwards from customer needs can be contrasted with a skills-forward approach where existing skills and competencies are used to drive business opportunities. The skills-forward approach says, ‘We are really good at X. What else can we do with X.’ That’s a useful and rewarding business approach. However, if used exclusively, the company employing it will never be driven to develop fresh skills. Eventually the existing skills will become outmoded. Working backwards from the customer needs often demands that we acquire new competencies and exercise new muscles, never mind how uncomfortable and awkward-feeling those first steps might be.” (2008)
#4) “We ask people to consider three questions before making a [hiring] decision: Will you admire this person? Will this person raise the average level of effectiveness of the group they’re entering? Along what dimension might this person be a superstar?” (1998)
#3) “Long-term thinking is both a requirement and an outcome of true ownership.” (2003)
#2) In reference to the newly introduced Kindle e-book reader “…we shouldn’t try to copy every last feature of a book – we could never out-book the book. We have to add new capabilities – ones that could never be possible with a traditional book.” (2007)
#1) At Amazon it is always “Day 1.” “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.” (2016)
I hope you enjoyed this week’s article. If so, please consider sharing with someone else that might benefit from it, but first read below to find the additional “Honorable Mentions” that didn’t quite make the top-10.
Also, I’d love to hear your thoughts on this article. Please drop me a line by email or reach out on Twitter @tldrSales. I’d love to hear from you!
If you haven’t done so I’d highly consider reading the consolidated list of letters here. It’s well worth your time.
Honorable Mentions
“Most large organizations embrace the idea of invention, but are not willing to suffer the string of failed experiments necessary to get there.” (2015)
“Start with customers, and work backwards. Listen to customers, but don’t just listen to customers – also invent on their behalf.” (2009)
“Many of the important decisions we make at Amazon.com can be made with data. There is a right answer or a wrong answer, a better or a worse answer, and math tells us which.” (2005)
“In the short term, the stock market is a voting machine; in the long term it’s a weighing machine. (Quoting Benjamin Graham)” (2000)
“To us, operational excellence implies two things: delivering continuous improvement in customer experience and driving productivity, margin, efficiency, and asset velocity across all businesses.” (1999)
“We first measure ourselves in terms of the metrics most indicative of our market leadership: customer and revenue growth, the degree to which our customers continue to purchase from us on a repeat basis, and the strength of our brand.” (1997)