Money out of Air
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Money out of Air

A Few Things I Learned from Jeff Bezos’ 2016 Letter to Investors

Don’t come at Bezos with your Conjoined Triangle of Success. Or your Porter’s 5 Forces. Or any jargon from business school or so-called gurus.

Bezos is on another level.

You need to read Bezos’ 2016 letter to shareholders. You can see the entire thing right here. I just finished reading it and below I’ve highlighted some of my favorite moments.

If you work in tech, run your own company or like learning about the tech industry, you will find what Bezos writes as a glimpse into this thought process and what kind of potential there is for the future.

“I’ve been reminding people that it’s Day 1 for a couple of decades. I work in an Amazon building named Day 1, and when I moved buildings, I took the name with me. I spend time thinking about this topic.

Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”

“Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf. No customer ever asked Amazon to create the Prime membership program, but it sure turns out they wanted it, and I could give you many such examples.”

“The process becomes the proxy for the result you want. You stop looking at outcomes and just make sure you’re doing the process right. Gulp. It’s not that rare to hear a junior leader defend a bad outcome with something like, “Well, we followed the process.” A more experienced leader will use it as an opportunity to investigate and improve the process. The process is not the thing. It’s always worth asking, do we own the process or does the process own us?”

“Good inventors and designers deeply understand their customer. They spend tremendous energy developing that intuition. They study and understand many anecdotes rather than only the averages you’ll find on surveys. They live with the design.”

“These big trends are not that hard to spot (they get talked and written about a lot), but they can be strangely hard for large organizations to embrace. We’re in the middle of an obvious one right now: machine learning and artificial intelligence.”

Side note: I am little shocked he did not talk about robotics here. I don’t know if you’ve seen this video but…

“Day 2 companies make high-quality decisions, but they make high-quality decisions slowly. To keep the energy and dynamism of Day 1, you have to somehow make high-quality, high-velocity decisions. Easy for start-ups and very challenging for large organizations.”

“Most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you’re probably being slow.”

“Recognize true misalignment issues early and escalate them immediately. Sometimes teams have different objectives and fundamentally different views. They are not aligned. No amount of discussion, no number of meetings will resolve that deep misalignment.”

“Use the phrase “disagree and commit.” This phrase will save a lot of time. If you have conviction on a particular direction even though there’s no consensus, it’s helpful to say, “Look, I know we disagree on this but will you gamble with me on it? Disagree and commit?”

I hope you all enjoyed this post. Once again the original link to read his entire letter to investors is in the first few sentences above. Admire him or despise him, you just learned a little bit more about Jeff Bezos. And hopefully each insight will help you in some way.

Make sure you’re also following me on Twitter.



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I write about investing and manage my own account. I look for misunderstood companies that can be big long-term winners.