Amazon’s CEO annual letter to his shareholders is a must-read. Customer focus, decision-making or the importance of writing down important things… Here are my takeaways from Jeff’s latest.
Whatever we think of its founder and CEO, Amazon remains a remarkable example of great management. Since its 1994 start, the company enjoyed steady growth, relentlessly conquering new markets and sectors, coupled to exceptional resilience shown when the company weathered two market crashes (2000 and 2008). In addition, Bezos has demonstrated a consistent ability to convince his board and shareholders to let expansion take precedence over profits and dividends. (No one can complain: thousand dollars invested in Amazon’s 1997 IPO are now worth more than half a million, a 500x multiple).
This didn’t happen without damage. By some measures, Amazon isn’t an enviable place to work and the pressure it applies to its suppliers rivals the iron fist of Walmart’s purchasing department. All things considered, Amazon’s level of corporate toxicity remains reasonable compared to Uber, as an example.
Jeff Bezos is also able to project an ultra-long term vision with his space exploration project for which he personally invests about a billion dollars per year.
Closer to our concerns, he has boosted a respected but doomed news institution — The Washington Post — thanks to a combined investment in journalistic excellence and in technology, two areas left fallow by most publishers.
That is why I thought Bezos’ written addresses to his shareholders (here) are worth some exegesis.
Let start with last week’s letter. (Emphasis mine, and while quotes are lifted from the original documents, some paragraphs have been rearranged for clarity and brevity).
Bezos starts his 2016 missive with a question asked by staffers at all-hands meetings:
“Jeff, what does Day 2 look like? (…) [Bezos reply:] Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”
Then he enumerates the three obsessions that make Amazon what it is today:…