Invent and Wander: The Collected Writings of Jeff Bezos

by Jeff Bezos

“Curiosity is more important than knowledge.”

“You know the business plan won’t survive its first encounters with reality,” he says. “But the discipline of writing the plan forces you to think through some of the issues and to get sort of mentally comfortable in the space. Then you start to understand, if you push on this knob, this will move over here and so on. So, that’s the first step.”

Keeping his focus on the customer, he emailed one thousand of them to see what else they would like to be able to buy. The answers helped him understand better the concept of “the long tail,” which means being able to offer items that are not everyday bestsellers and, thus, don’t command shelf space at most retailers.

“The advantage of being customer focused is that customers are always dissatisfied. They always want more, and so they pull you along.

“We make money when we help customers make purchase decisions.”

“You get paid to make a small number of high-quality decisions.

There are three criteria he instructs managers to consider when they are hiring: Will you admire this person? Will this person raise the average level of effectiveness of the group he or she is entering? Along what dimension might this person be a superstar?

We now know vastly more about online commerce than when Amazon.com was founded,

Though we are optimistic, we must remain vigilant and maintain a sense of urgency.

feel good about what we’ve done, and even more excited about what we want to do.

Our customers tell us that they choose Amazon.com and tell their friends about us because of the selection, ease-of-use, low prices, and service that we deliver.

I constantly remind our employees to be afraid, to wake up every morning terrified. Not of our competition, but of our customers. Our customers have made our business what it is, they are the ones with whom we have a relationship, and they are the ones to whom we owe a great obligation.

Will you admire this person? If you think about the people you’ve admired in your life, they are probably people you’ve been able to learn from or take an example from.

I’ve always tried hard to work only with people I admire,

Life is definitely too short to d...

Will this person raise the average level of effectiveness of the gr...

the company five years from now. At that point, each of us should look around and say, “The standards are so high now—boy, I’m glad I got in when I did!”

Along what dimension might this person be a superstar?

Operational excellence: To us, operational excellence implies two things: delivering continuous improvement in customer experience and driving productivity, margin, efficiency, and asset velocity across all our businesses.

Often, the best way to drive one of these is to deliver the other.

bold bets have included everything from our investment in digital and wireless technologies, to our decision to invest in smaller e-commerce companies, including living.com and Pets.com, both of which shut down operations in 2000.

Online selling (relative to traditional retailing) is a scale business characterized by high fixed costs and relatively low variable costs.

improved customer self-service capabilities.

shares are worth only the present value of their future cash flows, not the present value of their future earnings.

a company can actually impair shareholder value in certain circumstances by growing earnings.

AT AMAZON’S CURRENT scale, planting seeds that will grow into meaningful new businesses takes some discipline, a bit of patience, and a nurturing culture. Our established businesses are well-rooted young trees. They are growing, enjoy high returns on capital, and operate in very large market segments.

These characteristics set a high bar for any new business we would start. Before we invest our shareholders’ money in a new business, we must convince ourselves that the new opportunity can generate the returns on capital our investors expected when they invested in Amazon.

And we must convince ourselves that the new business can grow to a scale where it can be significant in the ...

The culture demands that these new businesses be high potential and that they be innovative and differentiated, but it does not demand that they be large on the day that they are born. I

In our experience, if a new business enjoys runaway success, it can only begin to be meaningful to the overall company economics in something like three to seven years. We’ve seen those time frames with our international businesses, our earlier nonmedia businesses, and our third-party seller businesses.

Anytime you make something simpler and lower friction, you get more of it.

In our retail business, we have strong conviction that customers value low prices, vast selection, and fast, convenient delivery and that these needs will remain stable over time.

It is difficult for us to imagine that ten years from now, customers will want higher prices, less selection, or slower delivery.

Our annual goal setting process begins in the fall and concludes early in the new year after we’ve completed our peak holiday quarter.

Our goal setting sessions are lengthy, spirited, and detail oriented. We have a high bar for the experience our customers deserve and a sense of urgency to improve that experience. We’ve been using this same annual process for many years. For 2010, we have 452 detailed goals with owners, deliverables, and targeted completion dates. These are not the only goals our teams set for themselves, but they are the ones we feel are most important to monitor. None of these goals are easy and many will not be achieved without invention. We review the status of each of these goals several times per year among our senior leadership team and add, remove, and modify goals as we proceed. A review of our current goals reveals some interesting statistics: 360 of the 452 goals will have a direct impact on customer experience.

Start with customers and work backward.

“Amazon has made it possible for authors like me to get their work in front of readers and has changed my life.

Career Choice is a program where we prepay 95 percent of tuition for our employees to take courses for in-demand fields, such as airplane mechanic or nursing, regardless of whether the skills are relevant to a career at Amazon. The goal is to enable choice.

We seek leaders who can invent, think big, have a bias for action, and deliver results on behalf of customers.

A DREAMY BUSINESS OFFERING has at least four characteristics. Customers love it, it can grow to very large size, it has strong returns on capital, and it’s durable in time—with the potential to endure for decades.

When you find one of these, don’t just swipe right, get married.

Amazon hasn’t been monogamous in ...

we are now happily wed to what I believe are three such life partners: Marketplace, Prime, and AWS. Each of these offerings was a bold bet at first, and sensible people worried (often!) that they could not work.

Big Winners Pay for Many Experiments

corporate cultures: for better or for worse, they are enduring, stable, hard to change. They can be a source of advantage or disadvantage. You can write down your corporate culture, but when you do so, you’re discovering it, uncovering it—not creating it. It is created slowly over time by the people and by events—by the stories of past success and failure that become a deep part of the company lore.

And while I’ll focus on those three, I assure you that we also remain hard at work on finding a fourth.

We want Prime to be such a good value that you’d be irresponsible not to be a member.

Prime members who watch Prime Video are more likely to convert from a free trial to a paid membership, and more likely to renew their annual subscriptions.

We want to combine the extraordinary customer-serving capabilities that are enabled by size with the speed of movement, nimbleness, and risk-acceptance mentality normally associated with entrepreneurial start-ups.

If you walk through and don’t like what you see on the other side, you can’t get back to where you were before. We can call these Type 1 decisions.