Jeff Bezos

The Wall Street banker who built the world's largest online bookstore and created $1.5 trillion

At Amazon, it's always Day 1 ... Walk into Amazon's Day 1 head office in Seattle and you will find the Day 1 room, it's Jeff's room. And he only has meetings in the afternoon, the morning is for entrepreneurial thinking. Amazon's Day 1 approach remains the same as it was on Jeff's very first day when he arrived in a VW campervan from Wall Street - to make smart, fast decisions, stay nimble, invent, and focus on delighting our customers.

Jeff Bezos started Amazon in his garage nearly 30 years ago. He recently stepped up from CEO to become executive chairman, saying it will give him “time and energy” to focus on his other ventures. Bezos, again the world’s richest man with a $200bn fortune (depending on share prices), will be replaced later this year by Andy Jassy, who currently leads Amazon Web Services (the cloud computing business which he has led for 15 years, and contributes 63% of Amazon’s total operating profits).

Bezos’s legacy is phenomenal. Since leaving his Wall Street job in 1994 and heading west towards Seattle in a VW campervan to launch an online bookstore, his journey has been unique. Nobody else has

  • Grown a business from zero to $1.5 trillion market cap
  • Turned the biggest cost centres into profit centres
  • Generated recurring revenues from 82% of US homes
  • Hired over half a million people in 12 months

Amazon now employs 1.3 million people globally and has its hand in everything from package delivery and streaming video to cloud services and advertising. It reported $38 billion in sales in 2020, up 38% from 2019. Profits almost doubled, rising to $21.3bn.

“Being the CEO of Amazon is a deep responsibility, and it’s all consuming. When you have a responsibility like that, it’s hard to put attention on anything else,” Bezos said in a letter to his Amazon staff.

“As Executive Chair I will stay engaged in important Amazon initiatives but also have the time and energy I need to focus on the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and my other passions. I’ve never had more energy, and this isn’t about retiring. I’m super passionate about the impact I think these organisations can have.”

Each year, Jeff Bezos writes an open letter to Amazon’s shareholders. Over the last 20 years, these letters (you can download them all from my website) have become an unparalleled source of insight into how the world’s richest man thinks about leadership, digital strategy, business efficiency, online customer experiences, managing through crises, and more.

Since founding Amazon in 1994, Jeff Bezos has run his company according to an unconventional set of principles. Don’t worry about competitors, don’t worry about making money for shareholders, and don’t worry about the short-term. Focus on the customer, and everything else will fall into place, he repeats. Quotes from previous letters include:

  • On decision-making: “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. Plus, either way, you need to be good at quickly recognizing and correcting bad decisions. If you’re good at course correcting, being wrong may be less costly than you think, being slow is going to be expensive for sure.”
  • On customer-centricity: “There are many advantages but here’s the big one: customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great. 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.”
  • On AI and machine learning: “Over the past decades computers have broadly automated tasks that programmers could describe with clear rules and algorithms. Modern machine learning techniques now allow us to do the same for tasks where describing the precise rules is much harder. At Amazon, we’ve been engaged in the practical application of machine learning for many years now.”

Bezos’ new letter, published in April 2020, focuses on the threat posed by Covid-19, to Amazon and to the world. His key message is simple: Amazon is acting aggressively to create value and keep people safe, following some criticism from media. Amazon earned $75 billion revenue in the last quarter, up 22% on last year. That’s $10,000 per second. He is also spending $4 billion on Covid-19 safety measures for his people and customers.

He considers the new stress that Amazon has been put under to be a productive stress, something that will, in the long run, help Amazon by teaching it how to operate under a chaotic set of circumstances.

He concludes “Reflect on this from Theodor Seuss Geisel: ‘When something bad happens you have three choices. You can either let it define you, let it destroy you, or you can let it strengthen you.’ I am very optimistic about which of these civilisation is going to choose.”

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