Invent and Wander: The Collected Writings of Jeff Bezos
Jeff Bezos
Harvard Business Review Press (November 2020)
For this CEO, it will always be “Day 1”
What we have in this volume is a collection of Jeff Bezos’ writings: shareholder letters as well as excerpts from essays, commentaries, transcripts of interviews, and public statements dating from April 1997 until July 2020.
At least until earlier this year, in or near the downtown area of most major cities, there was a farmer’s market at which a few merchants offered slices of fresh fruit as a sample of their wares. In that same spirit, here is a selection of brief excerpts that suggest the thrust and flavor of Bezos’ thinking.
o “Ouch! [2000] has been a brutal year for many in the capital markets and certainly for Amazon.com shareholders. [The value of an Amazon share had fallen from $106 to $6 within a few months.] Nevertheless, by any measure, Amazon.com the company is in a stronger position now than at any time in its past.” Bezos then explains why in his letter to shareholders. (Page 51)
o From the 2002 letter: “Given how much we’ve grown and how much the Internet has evolved, it’s notable that the fundamentals of how we do business remain the same.” They remain the same today. (63)
o “In our retail business, we have strong conviction that customers value how prices, vast selection, and fast convenient delivery. It is difficult for us to imagine that ten years from now, customers will want higher prices,less selection, or slower delivery. We know that the energy we put in now will continue to pay dividends well into the future. Our belief in the durability of these pillars is what gives us the confidence required to invest in strengthening them.” (85-86)
o While many of Amazon’s systems are based on the latest in computer science research, “this often hasn’t been sufficient: our architects and engineers have had to advance research in directions no academic had yet taken. Many of the problems we face have no textbook solutions, and so we — happily — invent new approaches.” (92)
o Companies often know where they’re going. “In contrast, wandering in business is not efficient — but it’s also not random…Wandering is an essential counterbalance to efficiency. You need to employ both. The outsized discoveries — the ‘nonlinear’ ones — are highly likely to require wandering.” (169)
o If I make, like, three good decisions a day, that’s enough, and they should just be as high quality as I can make them. Warren Buffett says he’s good if he makes three good decisions a year, and I really believe that.” (209)
o “I don’t even like the phrase ‘work-life balance.’ I think it’s misleading. I like the phrase ‘work-life harmony.’ I know if I am energized at work, happy at work, feel like I’m adding value, part of a team, whatever energizes you, that makes me better at home. It makes me a better husband, a better father. Likewise, if I’m happy at home, it makes me a better employee, a better boss.” (223)
o “I love garage entrepreneurs and invest in a lot of their companies. I know many of them. But nobody in their garage is going to build an all-carbon fiber, fuel-efficient Boeing 787. It’s not going to happen. You need Boeing to do that. If you like your smartphone, you need Apple to do that; you need Samsung to do that. There are things that well-functioning entrepreneurial capitalism does very well. And there are market failures that no one takes care of, and you look to philanthropy and government to take care of them. So you need different models for different things. But definitely, this world would be worse off without, for example, Boeing, Apple, and Samsung.” (233)
o “To invent you have to experiment, and if you know in advance that it’s going to work, it’s not an experiment. Outsized returns come from betting against conventional wisdom, but conventional wisdom is usually right.” (260)
I was especially interested in what Bezos has to say about organizational performance. “Staying in Day 1 requires you to experiment patiently, accept [and learn from] failures, plant seeds, protect saplings, and double down when you see customer delight. A customer-obsessed culture best creates the conditions where all of that can happen.”
What if you don’t stay in Day 1?
“Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1. To be sure, this kind of decline would happen in extreme slow motion. An establish company might harvest Day 2 for decades, but the final [inevitable] result would still come.”
Bezos also explains what he characterizes as “high-velocity decision making” which enables Amazon to sustain its Day 1 mindset.
“First, never use a one-size-fits-all decision-making process…Second, most decisions should probably be made with somewhere around 70 percent of the information you wish you had…Third, use the phrase ‘disagree and commit.’ It’s helpful to say, ‘Look, I know we disagree on this, but will you gamble with me on it?’ By the time you’re at this point, no one can know for the answer for sure, and you’ll probably get a quick yes…Fourth, recognize true misalignment issues early and escalate them immediately.”
Bezos constantly asks, “Are we delighting customers? We can have the scope and capabilities of a large company and the spirit and heart of a small one. But we have to choose it.” And then make it happen.
He obviously agrees with Thomas Edison: “Vision without execution is hallucination.”
Whatever you may think of Bezos, whatever you may think of Amazon, the fact remains that both have had a profound, unique, and permanent impact on standards of living and quality of life throughout the world.
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I also highly recommend these two books:
The Amazon Management System: The Ultimate Digital Business Engine That Creates Extraordinary Value for Both Customers and Shareholders
Ram Charan and Julia Yang
Ideapress Publishing (December 10, 2019)
The Everything Store: Jeff Bezos and the Age of Amazon
Brad Stone
Little, Brown & Company (August 12, 2014)