Jeff Bezos: defining Day 2
Jeff Bezos, Amazon’s CEO (Chief Executive Officer) has released the 2016 (this year) letter to shareholders.
This is a tradition at Amazon, and honestly, I think this is one of the most valuable ones yet.
You can read it here:
and you can read previous ones here:
along with annual reports and proxy statements.
What makes it valuable?
It’s really about philosophy, and that’s what gives me confidence (reasonable confidence, I would say) in Amazon’s long-term success.
I have a lot invested in Amazon being here and going strong fifty years from now.
It’s possible I’ll still be around and using their services in 2067 (you never know). Even if I’m not, though, the odds are pretty good that people both in my family and in the general public will be affected by things I’ve done by and through Amazon (including writing).
Amazon is sometimes seen as a cult of personality around Jeff Bezos…will that driving and guiding force still be actively present in 2067? Again, that’s possible: Bezos would be turning 103.
What can certainly still be active is the philosophy of Amazon.
That, however, is not inevitable…and that’s the entire point of this year’s shareholders’ letter.
Jeff Bezos likes to say that Amazon is in “Day 1”: still in the beginning.
That’s always an uncertain, dynamic time. I work in a company where there are many smaller “units”, which we can think of as geographically defined. Let’s think of them as states in the United States.
When we are going to make a change that affects the entire company, we like to pilot it in one or two of these “states” first.
I like to tell the people there that there are big advantages and disadvantages.
The disadvantage is that whatever it is won’t work as well in the first state as it will in the fiftieth.
We will have identified problems and solved most of them.
We will have had a lot of input from the frontline people who depend on it.
The earlier you are in an in situ development process, the more power you have.
When you get to the twentieth state to “go live”, you simply can’t change things that affect the first nineteen without a lot of effort.
Day 1 is chaos…and power.
The letter says:
“Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”
The stasis part is key. You want to always be changing, because the world is always changing. Just because you are at the top of the heap right now doesn’t mean that there isn’t going to be a bigger heap growing next door.
As I recall (and this is just from memory), Yul Brynner responded to the question of what should be on the actor’s tombstone this way: “I would like it to say, ‘I Have Arrived’..because when you believe you’ve arrived, you’re dead.”
I’ve always liked that. It goes along with the Doc Savage (one of my literary heroes, and soon to be played by Dwayne “The Rock” Johnson in a major movie) oath: “Let me strive every moment of my life to make myself better and better, to the best of my ability, that all may profit by it.”
Never stop getting better, never believe you are done.
I had a director, Ross Graham, who said years ago, “When you stop being a student, you stop being an artist.”
That’s a lot of what this year’s letter discusses. Keep evolving, and know you are never finished.
This last short excerpt I’ll give you (and encourage you strongly to read the letter, even if you have no involvement with Amazon), ties that ever evolving concept with being a “customer focused” company:
“There are many advantages to a customer-centric approach, but here’s the big one: customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great. Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf.”
That’s a philosophy, and one that won’t be irrelevant fifty years from now.
I observed myself quite some time ago that the way that customer-served companies lose their leadership position isn’t by underestimating their competitors, as is commonly assumed, but my overestimating their customers’ loyalty.
It happens when a company figures that customers won’t leave them for an upstart because, you know, “we are the company for this”.
In terms of what the letter might portend, Jeff Bezos talks about embracing external trends, and specifically mentions artificial intelligence and machine learning. No question, that’s important, and could change just about everything else.
It’s good because it’s conceptual. It’s not a specific product. You could get to artificial intelligence a lot of ways, and it may not be the way we are trying now.
I do think that augmented (more than virtual, but virtual, too) is a big part of Amazon’s future this year. However, that is a more specific, narrow thing than AI, so I think it’s good Bezos didn’t mention it in the letter.
Something that’s also nice: this year’s letter, as is traditional, also reproduces the 1997 letter, where JB talks about Day 1 (although it’s in reference to the internet and specifically to Amazon, not just Amazon).
This is why I have confidence in Amazon. It won’t be easy to stay in Day 1 for fifty more years…but they will try to do that.
Do you have thoughts about the letter, or in general, about Amazon’s future? Feel free to let me and my readers know by commenting on this post.
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