On Wednesday, Amazon CEO Jeff Bezos sent out his annual letter to shareholders, outlining new challenges and even disagreements within the company. He touched upon third-party sellers, not becoming a “Day 2” company, high-velocity decision making, the key to understanding customers and why you should embrace external trends (in Amazon’s case, that’d be machine learning, A.I., drones, etc.).
It’s a solid read.
But Bezos also attached his 1997 letter, the company’s original missive to shareholders (revenue at $147.8 million!). He called it “Day 1 for the Internet.” Also would have been a good time to throw an Alexander Hamilton at the company. Looking back, the man was prescient.
A few 20-year old lessons that shaped Amazon and could still help shape your business:
1. Think long term: For Bezos, market leadership and scale were always fundamental, the building blocks that eventually lead to “higher revenue, profitability and stronger returns on invested capital.”
2. Obsess over your customers: “From the beginning, our focus has been on offering our customers compelling value. We realized that the Web was, and still is, the World Wide Wait. Therefore, we set out to offer customers something they simply could not get any other way.”
3. Analytics rule: “We will continue to measure our programs and the effectiveness of our investments analytically, to jettison those that do not provide acceptable returns, and to step up our investment in those that work best.”
4. Be bold and make mistakes: If a bold decision could yield market leadership advantage, Bezos was always willing to roll the dice. “Some ... will pay off. Others will not. We will have learned another valuable lesson in either case.”
5. Bootstrap whatever you can: “We understand the importance of continually reinforcing a cost-conscious culture, particularly in a business incurring net losses.”
6. Treat valued employees like owners: “We will continue to focus on hiring and retaining versatile and talented employees, and continue to weight their compensation to stock options rather than cash. 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.”
7. But if you want to create a legacy, don't handle 'em with kid gloves: “It’s not easy to work here (when I interview people I tell them, ‘You can work long, hard, or smart, but at Amazon.com you can’t choose two out of three’), but we are working to build something important, something that matters to our customers, something that we can all tell our grandchildren about.”
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