Jeff Bezos’ Compressed Annual Shareholder Letter 2019

Amazon’s annual shareholder letter has particular significance in the business world. Because it is essentially representative of the vision of Amazon. Jeff Bezos published Amazon’s annual shareholder letter on Thursday, April 11th, 2019.

Here’s an essential review and summary of key points. You can read the entire letter here.

Compressed Version of Amazon’s Annual Shareholder Letter 2019

Third-Party Sellers

  • Third-party sellers are kicking our first party butt. Badly.
  • Third-party sales have grown from 3% of the total to 58% (from 1999 to 2019)
  • Third-party business growth has gone from $1.6 billion in 1999 to $117 billion this past year (2018).
  • Amazon attributes this growth in part due Amazon helping independent sellers compete against our first-party business by investing in and offering them the very best selling tools we could imagine and build.

Culture of Amazon

  • From very early on in Amazon’s life, we knew we wanted to create a culture of builders — people who are curious, explorers.
  • A builder’s mentality helps us approach big, hard-to-solve opportunities with a humble conviction that success can come through iteration: invent, launch, reinvent, relaunch, start over, rinse, repeat, again and again.
  • It’s guided — by hunch, gut, intuition, curiosity, and powered by a deep conviction that the prize for customers is big enough that it’s worth being a little messy and tangential to find our way there.
  • Customer centricity: Amazon spends a lot of time thinking about what those organizations want and what the people inside them — developers, dev managers, ops managers, CIOs, chief digital officers, chief information security officers, etc. — want.
  • Much of what we build at AWS is based on listening to customers.
  • Anticipation is key (for customer centric innovation). No business could thrive without that kind of customer obsession. But it’s also not enough. The biggest needle movers will be things that customers don’t know to ask for.


  • No one asked for AWS. No one. Turns out the world was in fact ready and hungry for an offering like AWS but didn’t know it.
  • We had a hunch, followed our curiosity, took the necessary financial risks, and began building — reworking, experimenting, and iterating countless times as we proceeded.
  • Within AWS, that same pattern has recurred many times. For example, we invented DynamoDB, a highly scalable, low latency key-value database now used by thousands of AWS customers.
  • We spent several years building our own database engine, Amazon Aurora, a fully-managed MySQL and PostgreSQL-compatible service with the same or better durability and availability as the commercial engines, but at one-tenth of the cost.
  • Modern applications are driving the need for low latencies, real-time processing, and the ability to process millions of requests per second.
  • AWS is now a $30 billion annual run rate business and growing fast.

Machine Learning

  • It took years of wandering — experimentation, iteration, and refinement, as well as valuable insights from our customers — to enable us to find SageMaker, which launched just 18 months ago.
  • SageMaker removes the heavy lifting, complexity, and guesswork from each step of the machine learning process — democratizing AI.
  • Today, thousands of customers are building machine learning models on top of AWS with SageMaker. We continue to enhance the service, including by adding new reinforcement learning capabilities.

Imagining the impossible — The Long Game

  • Amazon today remains a small player in global retail. We represent a low single-digit percentage of the retail market, and there are much larger retailers in every country where we operate.
  • And that’s largely because nearly 90% of retail remains offline, in brick and mortar stores. (e.g. like in the U.S.)
  • With Amazon Go, we had a clear vision. Get rid of the worst thing about physical retail: checkout lines. No one likes to wait in line.
  • Getting there was hard. Technically hard. It required the efforts of hundreds of smart, dedicated computer scientists and engineers around the world. We had to design and build our own proprietary cameras and shelves and invent new computer vision algorithms, including the ability to stitch together imagery from hundreds of cooperating cameras.
  • The reward has been the response from customers, who’ve described the experience of shopping at Amazon Go as “magical.
  • We now have 10 stores in Chicago, San Francisco, and Seattle, and are excited about the future.

Failure needs to scale too — Internalizing Failure Tolerance

  • As a company grows, everything needs to scale, including the size of your failed experiments.
  • We will work hard to make them good bets, but not all good bets will ultimately pay out.
  • 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.
  • The vision for Echo and Alexa was inspired by the Star Trek computer (Jeff is huge sci-fi nerd)
  • 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.” (Amazon created an AI-consumer Arms race from a good bet)
  • Since that first-generation Echo, customers have purchased more than 100 million Alexa-enabled devices.
  • Developers doubled the number of Alexa skills to over 80,000, and customers spoke to Alexa tens of billions more times in 2018 compared to 2017.
  • The number of devices with Alexa built-in more than doubled in 2018.

Amazon as a Workplace

  • Last year, Amazon raised our minimum wage to $15-an-hour for all full-time, part-time, temporary, and seasonal employees across the U.S.
  • This wage hike benefitted more than 250,000 Amazon employees, as well as over 100,000 seasonal employees who worked at Amazon sites across the country last holiday.

My Note:

Today’s Amazon stock costs $1,844. One year ago it was $1,427. Five years ago it was $311.73. What’s next for Amazon? We’ll be watching.