Jeff Bezos was an investment banker who in 1994 walked into his boss’ office in New York City and said: “You know, I’m going to go do this crazy thing and I’m going to start this company selling books online.”
It seemed like a ridiculous idea back in 1994, but Jeff had been observing internet businesses for years and identified an opportunity. What seemed to be a strange idea at the time resulted in a business called Amazon.
Today, Amazon has a market cap over $1.5 trillion.
So what stands out about Jeff Bezos as a leader and operator?
I had the pleasure of speaking to Steve Anderson on my podcast recently. You can listen to the podcast here.
Steve is the author of “The Bezos Letters: 14 Principles to Grow Your Business Like Amazon”. This refers to the 21 letters to shareholders that Bezos has issued annually since the company’s inception.
Having gotten access to the letters, Steve shared with me the insights he thought entrepreneurs needed to know, kicking off with Bezos’s focus on long term thinking.
Every letter from 1998 through to now, Jeff writes: “As is my habit, I attach a copy of our 1997 letter and encourage you to read it”. That 1997 letter is over 20 years old, but it is still how Jeff references his plan for growing Amazon! What I find fascinating about this (despite not having access to the 1997 letter), is that Jeff has stayed true to his initial intention from the start of Amazon.
Embrace Failure: Stop Being Protective of Your Business Model
I spoke with Netflix co-founder Marc Randolph on my podcast, who told me how Blockbuster laughed at him and co-founder Reed Hastings when they asked them if they were interested in purchasing their company for $50 million.
Blockbuster was silly enough to protect what got them there, and weren’t thinking about the future and where viewing habits were going. And they weren’t alone; Kodak and Blackberry did the exact same thing for a very long time.
Steve shared with me: “That’s where Amazon shines. Bezos says several times in his letters (that) Amazon is actually the best place for an employee to fail because they have a structure around it. They encourage successful failure. They learn from their failures and they pivot to something better.”
Steve was clear that Amazon continues to have a lot of failures because they experiment. And Jeff Bezos makes very clear: “If you’re going to do an experiment, you have to embrace failure because if you don’t have the option for failure in an experiment, it’s not an experiment.”
He argues that every business needs more experimentation, which leads to invention, which then allows innovation later.
The phrase Bezos uses over and over again is that “we invent at Amazon on behalf of the customer.”
New Idea Model: Write The Press Release and The FAQs First
Another interesting strategy from Jeff Bezos to consider is as follows: Amazon uses what’s called the six-page narrative, a tool that they use to get all of the thoughts and ideas about a new venture, a new decision, a new platform, a new product, out beforehand.
This means writing the future press release about the product before it’s launched; again, focusing on the benefit to the customers.
This also entails writing out all the FAQs customers will have and answering them ahead of time.
The intent of this exercise is to obsess over your customers, which is a critical exercise in new product release. However, please still don’t seem to do it!
Founders have a habit of obsessing over problems they believe to be real, instead of obsessing over their customers; the only people who matter to get market adoption.
So ahead of a new product launch or venture, remember the following points:
- Long-Term Thinking: Sticking to your vision from the start.
- Customer Obsession: Constantly thinking about what customers want and need.
- Embrace Failure: Don’t protect your old business model. If you need to pivot, do it.
- The Six Page Narrative: Writing the future press release about the product before it’s launched, and writing out all the FAQs customers will have and answering them ahead of time.
This approach from Jeff Bezos is a game changer, and one that I believe can help a lot of founders to get their startups off the ground and continue to innovate.