If you haven’t heard of Jeff Bezos, then you have no doubt heard of the trillion-dollar company that he built from scratch, Amazon… yes, it’s currently standing with a market value of a mere $1.7 trillion. Not just an online shopping store but one that has expanded into cloud accounting, entertainment, advertising and even finance. Amazon has taken the world by storm and Bezos is one of the most influential businessmen of our time.
With Bezos now having vacated his role as CEO, here are 10lessons we can all learn from the man himself.
When he was in the early days of starting up an online bookstore – back in the day when the internet was only used by a select few – Jeff thought of himself as an 80 year old, looking back on his life. What would he be proud of, and what would he regret? He didn’t want to regret taking the leap into the online world, because at the time he thought it was going to be a really big deal, and boy was he right.
Bezos knew he wanted to build an internet business and he saw the opportunity of pairing this with an online book business. He wasn’t even that fond of books, but they seemed like a good match to take advantage of the internet’s massive growth potential. There are millions of books available, so they’re easy to stock and they are easy to ship. Simple.
Whilst many companies preach the motto of customer focus, none of them live it quite like Bezos. He was so passionate about the customer experience, he didn’t only want a company that made you feel good, but one that you really couldn’t live without. Each new product created needed to come with a 6 page narratively structured memo that everyone in the company had to read, live and breathe. There had to be a story behind it and that story had to explain why the customer could not live without the product.
When Amazon first kicked off, online shopping pretty much sucked. Only about one-third of households had a computer, even less had internet and those that did found it painfully slow. So Bezos had to create an experience – low prices, great selection, flawless fulfilment – that would help his customers overcome the early barriers of buying online.
And he had to stay one step ahead of the rest. As online shopping started to boom, he still needed his customers to choose Amazon; and in turn he needed to make their lives easier or better by providing a service of such value that it would exceed all costs.
Customers give you money, competitors do not. Focus your worry on your revenue source and don’t worry about anyone else.
Jeff has long been known to stick it to the (investment) man and not care about quarterly earnings or profits. He believed that the fundamental measure of the company’s success would be the shareholder value they create over the long term. They wanted their customers to be loyal and frequent shoppers. So, by offering Prime membership (free two-day delivery on everything for $79 a year) his shipping costs actually exceeded the price of membership. He didn’t care. He knew that by having a loyal membership base the sales would skyrocket and he was right. Short term pain for long term gain.
The term ‘flywheel effect’ was first used by Jeff in 2001, at which point he revealed Amazon’s clear growth strategy that once momentum picked up, it allowed Amazon to mainly stand back and let things unfold. Books were always going to be just the beginning.
He wanted a large selection of products, low prices and great customer service. By staying true to this, he attracted third-party sellers to the platform which in turn attracted more customers, and so on. Sounds too easy right?
Put the customers first and work backwards from there.
Are you sick of hiring great people and seeing them leave?Give your employees a mission; something with real purpose. Let them run with it and keep the passion alive.
You may have heard the cutthroat stories of working atAmazon – long hours, brutal working conditions and an environment that pushes everyone beyond their limits. Jeff has been famously known not to deny such things, yet he also fiercely protects the culture, which has been created slowly over time by the people and events, by the stories of past success and failure that has become a deep part of the company story.
There’s going to be critics at every corner. But what is important is your own values and belief system. With your values in mind, look in the mirror and take time to decide if your critics are right… if they’e right, change, if they’re wrong they’re just being critical.
Strategy is our strength, so if you would like help planning your future move(s) (like Jeff did), get in touch with one of our AttuneAdvisory team. Phone 1300 866 113or click here.