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Kindle Notes & Highlights
by
Jeff Bezos
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January 4 - January 5, 2021
Blue Origin’s larger orbital rocket, New Glenn, named after John Glenn, the first person to orbit the Earth,
Blue Origin has partnered with Lockheed Martin, Northrop Grumman, and Draper on the project.
Donald Graham,
The Washington Post has an incredibly important role to play in this democracy.”
He told me every wart and pimple and he told me all the things that were great.
1. Focus on the long term.
2. Focus relentlessly and passionately on the customer.
An investor complained that Bezos was forgetting that Amazon only makes money when it sells things, so negative reviews hurt the business. “When I read that letter, I thought, we don’t make money when we sell things,” Bezos says. “We make money when we help customers make purchase decisions.”
3. Avoid PowerPoint and slide presentations.
“We don’t do PowerPoint (or any other slide-oriented) presentations at Amazon,” he wrote in a recent shareholder letter. “Instead, we write narratively structured six-page memos.
4. Focus on the big decisions. “As a senior executive, what do you really get paid to do?” he asks. “You get paid to make a small number of high-quality decisions.
He divides the decisions that have to be made into those that can be walked back and those that are irrevocable. The latter require a lot more caution. In the case of the former, he tries to decentralize the process.
5. Hire the right people.
Compensation, especially early on, was heavily weighted to stock options rather than cash.
each of whom must think like, and therefore must actually be, an owner.”
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 believe that a fundamental measure of our success will be the shareholder value we create over the long term.
Market leadership can translate directly to higher revenue, higher profitability, greater capital velocity, and correspondingly stronger returns on invested capital.
each of whom must think like, and therefore must actually be, an owner.
We established long-term relationships with many important strategic partners, including America Online, Yahoo!, Excite, Netscape, GeoCities, AltaVista, @Home, and Prodigy.
1998
launched Amazon.com Auctions.
Heads-down focus
1999, announced the lease of a highly mechanized distribution center of approximately 323,000 square feet in Fernley, Nevada.
improve time-to-mailbox for customers.
As we do not need to build physical stores or stock those stores with inventory, our centralized distribution model has allowed us to build our business to a billion-dollar sales rate with just $30 million in inventory and $30 million in net plant and equipment.
We hold as axiomatic that customers are perceptive and smart, and that brand image follows reality and not the other way around.
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. And we consider them to be loyal to us—right up until the second that someone else offers them a better service.
During our hiring meetings, we ask people to consider three questions before making a decision:
Will you admire this person?
Will this person raise the average level of effectiveness of the group they’re entering?
Along what dimension might this person be a superstar?
recognized as best-of-breed
As far as we can determine, no other company has ever grown 90 percent in three months on a sales base of over $1 billion.
feel free to send an email to jeff@amazon.com.
2 billion in annualized sales but requiring just $220 million in inventory and $318 million in fixed assets.
We believe we have reached a “tipping point,” where this platform allows us to launch new ecommerce businesses faster, with a higher quality of customer experience, a lower incremental cost, a higher chance of success, and a faster path to scale and profitability than any other company.
Benjamin Graham said, “In the short term, the stock market is a voting machine; in the long term, it’s a weighing machine.”
we believed passionately in the “land rush” metaphor for the Internet.
Price performance of processing power is doubling about every eighteen months (Moore’s Law), price performance of disk space is doubling about every twelve months, and price performance of bandwidth is doubling about every nine months.
shipping that is free (year-round) on orders over $99.
We built a new feature called Look Inside the Book.
If you could know for certain just two things—a company’s future cash flows and its future number of shares outstanding—you would have an excellent idea of the fair value of a share of that company’s stock today. (You’d also need to know appropriate discount rates, but if you knew the future cash flows for certain, it would also be reasonably easy to know which discount rates to use.)
Amazon.com is not a normal store. We have deep selection that is unconstrained by shelf space.
American Customer Satisfaction Index, the most authoritative study of customer satisfaction, Amazon.com scored an eighty-eight, the highest score ever recorded—not
LONG-TERM THINKING IS both a requirement and an outcome of true ownership. Owners are different from tenants. I know of a couple who rented out their house, and the family who moved in nailed their Christmas tree to the hardwood floors instead of using a tree stand. Expedient, I suppose, and admittedly these were particularly bad tenants, but no owner would be so short-sighted.
At Amazon.com, we use the term customer experience broadly. It includes every customer-facing aspect of our business—from our product prices to our selection, from our website’s user interface to how we package and ship items.
OUR ULTIMATE FINANCIAL measure, and the one we most want to drive over the long-term, is free cash flow per share.
