One of the best things I’ve read recently is Jeff Bezos' most recent letter to shareholders of his company, Amazon. Jeff Bezos is known for being a pioneer and his letter shows why. It’s unlike any I’ve read before and is worth the time it takes to read it. It's a free lesson from a master who has built an empire and has worlds yet to conquer.
If you are not into investing, publicly-traded companies’ annual reports are prefaced by a letter to shareholders written (or ghost-written) by the CEO or sometimes the Chairman of a company. It is usually a page or two highlighting some of the things that are going right, covers some of the things that might not have got right, talks about market conditions the company is facing and what strategies they will pursue in the immediate future. (If you are interviewing for a job with a publicly-traded company, it’s a good place to start doing research on what’s going on inside a company.) Typically, they are uninspired boilerplate rah rah stuff, and often focus on more on the financial success or brilliance of the CEO, than the future of the company.
Amazon’s is different in many aspects – Founder & CEO Jeff Bezos highlights several things not normally covered – he talks about the high standards he has set for the company across all levels. He talks about their management philosophy. He talks about their culture. Their approach to talent. The number of small businesses that are growing in their marketplace. (Contrast the Wal-Mart effect) In short, if you were starting a company, or trying to figure out how to be more like Amazon, you do not have to look much farther than this document.
What amplified my fascination is that he includes the letter to shareholders he wrote back in 1997, when the company, and internet, was in its infancy. He laid out his strategy and philosophy back then and has done what they said they would do.
From time to time, Amazon has been criticized for not “resting on it’s laurels” and giving more profits back to investors. He specifically highlights in the 2017 letter why he does not want to rest on his laurels. In the 1997 letter he lays out that making long-term investments to achieve market dominance is more important than short-term gains or meeting Wall Street expectations.
I admire Mr. Bezos. He’s always trying to figure out what’s next, invests heavily in the infrastructure to do it well, learns from the failures and is generally not been satisfied with the status quo. He was quick to recognize that hiring the right talent was critical to the company success, and building a diverse culture where high-performance is rewarded and expected. Which is probably why Amazon has disrupted so many markets. Based on their stock performance, I’d say he’s on to something.
The sad part is his formula is not a secret – he freely tells it to anyone who wants to read it. The difference between knowledge and execution is the challenge.
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