10 Amazing Lessons From Jeff Bezos’ Letters To Shareholders
Jeff Bezos' annual letters to shareholders are an MBA on their own. Many would agree that reading Amazon's founder messages can bring great insight, especially for business CEOs.
Andre Oentoro, founder of Breadnbeyond, shares 10 amazing lessons that CEOs can take from Bezos’ letters to shareholders.
Although many leaders often mention phenomenal tech entrepreneurs as their true inspiration, like Steve Jobs, Mark Zuckerberg, Jack Ma, Elon Musk, and Bill Gates, Bezos’ name used to be overshadowed in the past few years—until his resignation from Amazon and his last letter caught the attention. A lot of entrepreneurs began to check Bezos’ extraordinary messages to his shareholders.
So, what can we learn from Bezos’ annual letters throughout his years at Amazon? Here are some outstanding messages for business CEOs to learn about his vision on innovations, products, and customers.
1. Company culture to be reshaped as employee-centric and customer-centric
While Amazon has succeeded in achieving innovation, it was less successful on other fronts. Bezos admits that the company’s efforts to pursue labour unions have not been fruitful and shares his disappointment with this outcome. He also acknowledges some shareholders’ opinions about how focusing more on employees will mean a shift away from customer-centricity. Still, he remains confident in the company’s success as long as they keep innovating while making sure workers are cared for.
2. In times of crisis, be aggressive and agile
When something bad happens, you have three choices. First, you can either let it define you, let it destroy you, or try to make the best of a difficult situation and use your experience as a strength. Bezos was very optimistic about hiring more workers to meet demand and help others collect customer data. Since the Covid19 pandemic hit businesses severely, many business CEOs would lay off employees to cut fixed costs. In contrast, Bezos argued that the crisis was the right time to be agile and stronger in order to stay relevant to the market.
3. Wandering is “one key” to innovate a great thing
In his messages, Bezos mentioned how impractical market research was for big companies. His past research in 2013 asking people their opinion on cylindrical equipment that talked (later he named Amazon Alexa) would result in nonsense. That’s why you can’t wholly depend on market research for innovation. You need to wander a bit to ignite your creativity spark naturally. Don’t get easily discouraged when you haven’t found any since every wander would mean another successful experiment.
4. Put your company culture on a high standard
Bezos said, “We don’t believe in just sitting around admiring our own navel. We’re all here because we want to change the world.” Having a cultured workspace will help you achieve your target rather quickly when you set your mindset high for a greater purpose. You should make a standard where employees can resonate with and be proud about when your company has reached its destination. Bezos always asked his staff to build high standards into Amazon culture. Hence, everyone feels empowered to strive for perfection without being an outlier or feeling left behind by their peers.
5. Move fast and focus on outcomes
It is important to be patient but also stay focused on your work. It doesn’t matter who you are or where you’re from. As long as you’re able to do the best you can, there will always be something for which somebody needs what you have to offer. Focusing on results would force you to work harder and faster. When you know what you want to serve to the greater audience, you’d have the desire to complete all the work in the span of a short time. That’s because trends keep changing, your effort will be fruitful when you provide your service or product at the right time. This way of thinking has helped Bezos overall in his years making innovation and building Amazon into what it is today.
6. Don’t fret over easily reversible decisions
Jeff Bezos argued that businesses need to be careful when it comes to decisions not to become stagnant. For example, if a company has an idea with unlimited benefits and is too cautious about its decision-making process, the opportunity will slip right through its fingers. To remain innovative as you grow, learn which decisions can be quickly reversed. So, hesitation doesn’t get in your way of innovation.
In order to maintain creativity as a company grows, it’s important to understand the difference between reversible decisions and irreversible ones. Big companies like Amazon make risky bets now because they know that if things don’t work out, they can easily reverse their decision when needed. However, small startups that take similar risks are often stuck with bad consequences for years due to a lack of resources. Know your priorities but also don’t be too cautious when making decisions.
7. Bet on ideas that have unlimited benefits
You’ll have failures, but all winners have had failures at one point in their journey. You need a bold move to make innovations. Always be rational but don’t hold yourself from doing experiments that lead to failure. Increase your risk tolerance when doing experiments. Know when you start and when to stop by measuring a few important things. Get experimental when you know if:
- Customers will love it
- It has some potential to be big
- It has some potential to give you a massive return
- It’s something your company can endure
8. Be proactive in innovating
Amazon’s culture of creativity is the reason why Amazon has been so successful on so many levels and why it has become one of the biggest marketplace players in the world. Bezos would rather make something even before customers ask them and, more importantly, know about it. That kind of entrepreneurial spirit spreads throughout all aspects of Amazon’s business model.
9. Build long-term customer trust
When companies are able to retain their consumers for longer periods of time, they don’t need as much marketing or acquisition spending because those same people will spend more money with them every year. Amazon’s high lifetime value among its consumer base is clear evidence that building long-term customer trust works well enough on an individual level. If other businesses were willing to take risks as Amazon did, you’d see many successful businesses flourishing today.
10. Focus on inputs; outputs will come naturally
When setting goals for a business or product, focus on inputs or the ones we can control instead of focusing on outputs that are out of our hands over time. If you want your products or companies to be successful, then you need them focused entirely on one thing: know what customers find most important in their lives.
The lessons from Jeff Bezos’ letters to shareholders are an amazing resource for any leader. They can help you make better decisions, be more productive, and even understand our perception that changes over time. Learning from Bezos’ letters allows you to navigate your business better in order to reach your destination. It’s important to take notes on what Bezos did in his entire years in Amazon to bring it as prominent today. You can learn the same way to improve your leadership skills and eventually help your business to grow in success.
Andre Oentoro is the founder of Breadnbeyond, an award-winning explainer video company. He helps businesses increase conversion rates, close more sales, and get positive ROI from explainer videos.