Jeff Bezos quit his investment banking job at the age of 30 to start Amazon. Initially, he was doing all the work, including packaging up products and bringing them to delivery services to deliver. Now, Amazon has turned into a household name with 2/3 of American household’s paying for Amazon Prime. Bezos shares his top pieces of advice from over the years.
If the size of your failure isn’t growing, you’re not inventing at a size that can actually move the needle. Failure is inevitable before success, and so new failures and larger failures can lead to more significant wins. Small failures mean small risks, and no failures means staying in the comfort zone.
Take calculated risks. Failure is inevitable, but just doing things for the sake of having failures does not make a whole lot of sense. Think through what to do and if the odds of success makes sense, go ahead and jump into action.
Getting what the customer what they want and also what they didn’t consider. Sometimes, a combination is required. Asking customers what kind of vehicle they wanted 100 odd years ago, and they would have said the best newest taken care of horse that you can find. The idea of an automobile was not even in consideration, as it was an entirely new invention. For entirely new inventions, customers will not know. But within an existing domain, upgrades and improvements based on customer use and feedback can prove to be invaluable.
Be employee oriented, and also offer owner compensation where possible. Being employee oriented would mean focusing on the well being of them and considering them a priority, as they are the ones running the company. By offering incentives on the owner level, this can incentivize work and lead to alignment.
Think in the long term, long horizons, not 2–3 years timeframe. Too many now live as NPCs in the day to day, thinking about how to spend evenings and weekends, but not really sure where to be in the long run, e.g., 5, 10, or even 20 years. Thinking in the long-term will guide present term actions, rather than aimlessly and impulsively doing whatever feels the best in the moment.
Amazon had high fixed costs but positive incremental contribution margin. Starting with a high fixed cost where the variable cost can be driven down over time is a nice advantage, because it will lead to better margins over time. While the initial cost to start would be higher, if successful, profits will be higher.
Customer driven, not competition driven. You can be ahead of your competition, but not your customer, as they always have “needs”. It’s a waste of time to focus on competition, as there is always competition. Peter Thiel would say that competition is just for losers. Focus on a higher need, that comes from the customers themselves, is more important.
Both innovation and operational excellence are needed to excel. Without innovation, you end up being innovated out. Without operational excellence, nice ideas are simply worthless. Having a combination is hard to have, and that’s why great businesses are hard to find, much less other many qualities required.
It is always day one. By having this mindset, this ensures a beginner’s mindset and a continuous need to improve and be better. Once you’re thinking becomes it’s finished, you’re finished.
People work harder if they see others seeing them, or if they have no other option (reading a memo with others). Social peer pressure an be used positively to bring out certain desired behaviors.
If you have to manage the present, the company will go down. Needing to proactively manage the present will cause a ship to go rudderless and in the wrong direction. The future direction needs to be shaped, with also the present being managed properly. One foot in the future, one foot in the present, and no feet in the past.
Look at what the haters say about you; if it’s not true, ignore it. Behaving as a stoic, gathering facts that are true and not comfortable are opportunities for growth. If it isn’t true, then it’s entirely a waste of time.
You don’t find your passion; your passion finds you. A job vs a career vs a calling. A job doesn’t have room for advancement. A career has opportunity for advancement. A calling is a true purpose that has no boundaries. Passions cannot be found like locating a destination on a map. It may actually find you through trial and error and doing things. Often the activities we do without thinking about that aren’t required to do are what we are passionate about.
People are unimaginative and live a fraction of what they could live. Entertainment causes people to be living in a comfortable mediocrity and sedates the person from doing more. Real life causes people to become realistic and give up on their dreams. When dreams die, the people die.
Buffett is one of his heroes, followed in his early 20s. Like tends to attract like as Jeff Bezos had chosen Buffett as his hero from afar while starting as a young adult. Choose your heroes carefully, for your thoughts, attitudes, behaviors, actions, and then destiny, may end up moving in the direction of your heroes.
Disclaimer
This is not Financial Advice. This article is meant only for educational and perhaps entertainment purposes.