Posted on 06 December 2017
In association with INTHEBLACK Magazine. Entrepreneur, investor, computer scientist, philanthropist, space nut and briefly the world’s richest person, Jeff Bezos is arguably best known as the founder and chief executive of tech giant Amazon. A kid from Albuquerque who built a business on books, Bezos has changed the way the world shops, and he continues to have countless ideas for making the world a better place, including frustration-free packaging, artificially intelligent delivery drones and populating a new world … in space.
Here he speaks to the president and chief executive of the Internet Association, Michael Beckerman, about all he has done and all he still dreams of doing.
Michael Beckerman: At what point did you realize the scale of the success you’ve had with Amazon, from the initial foray into books to where you are now as a company?
Jeff Bezos: Did I anticipate what would happen over the last 22 years at Amazon? The answer is God no. Amazon started as a very small company – it was me and a few other people. I was driving all the packages to the post office myself, and when I raised money for Amazon I had to raise a million dollars from 22 different investors at US$50K each. They got 20 percent of the company for the million dollars. Forty people told me no. [It took] 60 meetings to get 20 yeses. The first question was always, “What’s the internet?”. I had to walk through that, and this was 1994, early 1995. Did I anticipate [what Amazon is] today and the current version of it? No. It has been one foot in front of the other and I think that is true for most businesses – you kind of proceed actively, step by step, and figure it out. You have a success and then you kind of double down on that success and you figure out what else you can do and what customers want. Everything we’ve done, all the success we have, is at its root primarily due to the fact that we have put customers first.
People have a very different idea of what Amazon is. Some people see you as an e-commerce company or a retailer. Others see you as an innovative tech company. You have Amazon Web Services and you have original content. You have Alexa [Amazon’s voice-controlled virtual assistant] and many other things. How should we be thinking about Amazon?
Bezos: We do such a diverse array of things, from producing original content at Amazon Studios to Amazon Web Services where we sell start-ups and enterprises computer infrastructureto our consumer [where] we deliver things in little brown boxes. The common thread is in [our] approach.
We have a very distinct approach that we have been honing and refining and thinking about for 22 years. It’s really just a few principles that we use. At the very top of the list is customer obsession, instead of competitor obsession or business-model obsession or product obsession or technology obsession. There are many ways to center a business and many of them can work. I know and have friends who lead very competitor-obsessed companies and those companies can be successful. Personally, I like the customer obsession model.
The second one is that we are willing – eager, even – to invent and pioneer, and that marries really well with customer obsession. Customers are always dissatisfied. Even when they don’t know it, even when they think they are happy, they want a better way and they just don’t know yet what that should be. Customer obsession is not just listening to customers; it is also investing on their behalf because it’s not their job to invent for themselves.
Finally, there is real long-term orientation. I ask everybody to not think in two- or three-year time frames but to think in five- to seven-year time frames. When somebody congratulates Amazon on a good quarter what I’m thinking to myself is those quarterly results were actually pretty much fully baked about three years ago. Today, I’m working on a quarter that is going to happen in 2020, not in the next three months.
Next quarter, for all practical purposes, is done already and it’s probably been done for a couple of years. If you start to think that way it changes how you spend your time, how you plan and where you put your energy. Your ability to look around corners gets better, and so many things improve if you can take a long-term view. That’s Amazon. It’s a collection of principles and an approach that we deploy, and it’s fine. I dance into work.
Clearly, you don’t take the success of Amazon lightly and you’re very involved in the company, so what does keep you up at night when you think about the continued success of Amazon?
I’m gifted with sleeping really well. I know what you mean though. For me, the thing I worry about the most is that we lose our way, that we lose our obsessive focus on customers or we somehow become short-term oriented or start to become overly cautious – kind of failure averse – and therefore unable to invent and pioneer. You cannot invent and pioneer if you cannot accept failure. To invent you need to experiment. If you know in advance that it is going to work it is not an experiment.
It’s embarrassing to fail, but you have to say no, that’s not how this works. It encourages you to experiment more. It’s the right business decision to experiment more, it’s also better for your customers – customers like successful experiments.
There is a giant misconception in a lot of young, inexperienced entrepreneurs. What’s fashionable right now is to talk about how disruptive a business plan is going to be, but the invention is not disruptive, it is customer adoption that is disruptive. At Amazon, we have invented a lot of things that customers did not care about at all. Believe me, they were not disruptive to anyone. It’s only when customers like the new way that anything becomes disruptive.
Amazon has changed so much. Ten years ago you were barely in cloud computing. Can you preview or predict what Amazon is going to look like in a decade?
Bezos: That’s a very good question. I think, on the outside, Amazon could change quite a bit. As you said, 10 years ago you wouldn’t think that AWS would be such a significant contributor to the business, and there could be more things in a 10-year time frame that we don’t know about.
The one thing I hope will not change, of course, is the approach I outlined at the beginning: the customer obsession, the willingness to invent, the patience, letting things develop, and accepting failure as a path to success.
One thing I should point out about failure is that there is a different kind of failure, which is not what you want. That’s where you don’t know what you are doing and you just screw it up. That’s not a good failure, that’s just bad execution.
The right kind of failure should be an invention. It should be something that you know is an experiment. You don’t know if it is going to work and you know up front that you don’t know if it is going to work. That shouldn’t be opening a new fulfillment center.
I would advise any entrepreneur or large business to identify their big ideas; there should only be two or three of them and the good news is they are usually incredibly easy to identify.
For Amazon – the consumer business – the three big ideas are low prices, fast delivery, and vast selection. The big ideas should be obvious. It’s very hard to maintain a firm grasp of the obvious at all times so you have to back up and say, “These are the three big ideas. How do we always deliver things a little faster? How do we always reduce our cost structure so that we can have prices that are a little lower?” And the good thing about these big ideas is they will be stable in time.
Ten years from now, customers will still like low prices no matter what happens with technology. No matter what happens, people are going to like faster delivery. I know that customers like low prices and they like availability. They like data security.
It’s not hard to figure out what the big ideas are and then you can keep putting energy into those things and they will still be paying you dividends 10 years from now.
To read more insight into Jeff Bezos, life and success you can purchase his book “The Everything Store” https://www.amazon.com/Everything-Store-Jeff-Bezos-Amazon-ebook/dp/B00BWQW73E