I’ve recently read The Everything Store by Brad Stone and this is the summary of the book. I stripped out anything non-essential.
“There’s so much new that’s going to happen. People don’t have any idea yet how impactful the Internet is going to be and that this is still Day 1 in such a big way”
– posted on a plaque next to Bezos’ office
“The idea was always that someone would be allowed to make a profit as an intermediary. The key question is: Who will get to be that middleman?”
If he couldn’t build a true everything store right away, he could capture its essence—unlimited selection—in at least one important product category.
you could build a store online that simply could not exist in any other way
The Regret-Minimization Framework
“When you are in the thick of things, you can get confused by small stuff, I knew when I was eighty that I would never regret walking away from my 1994 Wall Street bonus. I knew that I might sincerely regret not having participated in this thing called the Internet.”
“The whole thing seemed pretty iffy at that stage, There wasn’t really anything except for a guy with a barking laugh building desks out of doors in his converted garage”
The first challenge was to do something better than these other guys, There was competition already. It wasn’t as if Jeff was coming up with something completely new.”
The company held no inventory itself at first. When a customer bought a book, Amazon ordered it.
The first week after the official launch, they took $12,000 in orders
Revenues were growing 30 to 40 percent a month, a frenzied rate. No one had any idea how to deal with that kind of growth, so they all made it up as they went along.
the cash from Kleiner Perkins hit the place like a dose of entrepreneurial steroids, making Jeff more determined than ever.
Get Big Fast. The bigger the company got, the lower the wholesale prices
Bezos preached urgency: the company that got the lead now would likely keep it
!!! Amazon boasted a negative operating cycle. Customers paid with their credit cards when their books shipped but Amazon settled its accounts with the book distributors only every few months. With every sale, Amazon put more cash in the bank
Amazon had one website and, at that time, a single warehouse and inventory. Amazon’s ratio of fixed costs to revenue was considerably more favorable than that of its offline competitors.
Barnes & Noble
“Look, you should wake up worried, terrified every morning, but don’t be worried about our competitors because they’re never going to send us any money anyway.”
Barnes & Noble’s distribution operation was geared toward servicing physical stores by sending out large shipments of books to a set number of locations. The shift from that to mailing small orders to individual customers was long, painful, and full of customer-service errors. For Amazon, that was just daily business
Established brick-and-mortar business, or any company that might be used to doing things a certain way, will find it hard to be nimble or to focus attention on a new channel.
Amazon was looking for products that had high SKUs (the number of potentially stockable items), were underrepresented in physical stores, and could easily be sent through the mail. This was a key part of Amazon’s early strategy: maximizing the Internet’s ability to provide a superior selection of products as compared to those available at traditional retail store
Bezos now felt expansion into new categories was urgent. In customers’ minds, the Amazon brand meant books only. He wanted it to be more malleable, like Richard Branson’s Virgin
After watching the wild expansion for a few months, Pope said to Spiegel, “What we are doing here is building a giant rocket ship, and we’re going to light the fuse. Then it’s either going to go to the moon or leave a giant smoking crater in the ground. Either way I want to be here when it happens.”
Wright asked Bezos what products they would be shipping. “He said, ‘I don’t know. Just design something that will handle anything, Wright recalls. “I’m going, You’re kidding me, right? And he said, ‘No, that is the mission
why not rank everything on the site, not just the top sellers? “I thought, ‘Hey, why do we stop at a hundred? This is the Internet! Not some newspaper bestseller list. We can have a list that goes on and on.’ This catered to the authors’ more neurotic impulses. “Bezos knew sales rank would be like a drug to authors”
Ebay, unlike Amazon, was profitable. The company had the perfect business model: it took a commission on each sale but had none of the costs of storing inventory and mailing packages.
In online marketplaces, the network effect was pervasive; sellers stuck around for access to a critical mass of buyers, and vice versa. In the auctions category, eBay already had an insurmountable advantage
Dot-Com Boom And Insane Ideas
Bezos claimed he was impervious to the hype, but as the dot-com frenzy intensified, he used the unique climate to hasten Amazon’s growth. If there was to be a great Internet landgrab, he reasoned, Amazon should rush to carve out the biggest parcel of territory.
Bezos even wondered aloud whether Amazon could hire college students on every block in Manhattan and get them to store popular products in their apartments and deliver them on bicycles. Employees were dumbstruck. “We were like, Aren’t we already worried about theft from our distribution center in Atlanta?”
Personally Investing In Google
he was impressed by the Google guys’ “healthy stubbornness” as they explained why they would never put advertisements on their home page
Bezos immediately told Shriram that he wanted to personally invest in Google. Shriram told him the financing round had closed months ago, but Bezos insisted and said he wanted the same deal terms as other early investors
The Almost Dead Store
in February, Amazon sold $672 million in convertible bonds to overseas investors.
The deal was completed just a month before the crash of the stock market, after which it became exceedingly difficult for any company to raise money. Without that cushion, Amazon would almost certainly have faced the prospect of insolvency over the next year.
But through it all, Bezos never appeared to worry about the wild swings in public sentiment.
Up until that point, I had seen Jeff only at one speed, the go-go speed of grow at all costs. I had not seen him drive toward profitability and efficiency,” says Scott Cook
About The Wall Street Bears
the danger for Amazon was that in their wrongness, Suria and other Wall Street bears might prove themselves right. “The most anxiety-inducing thing about it was that the risk was a function of the perception and not the reality”
Toys “R” Us
Toys “R” Us inventory would be kept in Amazon’s distribution centers—the first step toward making the most expensive and complicated part of Amazon’s business a platform that other companies could use
The deal became a template for Amazon.
All of these deals improved Amazon’s balance sheet in the short term, but in the long run, they were awkward for all parties. By relying on Amazon, the retailers delayed a necessary education on an important new frontier and ceded the loyalty of their customers to an aggressive upstart.
On Stock Prices
In the span of three weeks in June, it dropped from $57 to $33, shedding almost half its value. Employees started to get nervous. Bezos scrawled I am not my stock price on the whiteboard in his office and instructed everyone to ignore the mounting pessimism. “You don’t feel thirty percent smarter when the stock goes up by thirty percent, so when the stock goes down you shouldn’t feel thirty percent dumber,” he said at an all-hands meeting. He quoted Benjamin Graham, the British-born investor who inspired Warren Buffett: “In the short term, the stock market is a voting machine. In the long run, it’s a weighing machine” that measures a company’s true value. If Amazon stayed focused on the customer, Bezos declared, the company would be fine
About Express Shipping The 4th Harry Potter
Amazon lost a few dollars on each of about 255,000 orders, just the kind of money-losing gambit that frustrated Wall Street. But Bezos refused to see it as anything other than a move to build customer loyalty. “That either- or mentality, that if you are doing something good for customers it must be bad for shareholders, is very amateurish”
Bezos was obsessed with the customer experience, and anyone who didn’t have the same single-minded focus or who he felt wasn’t demonstrating a capacity for thinking big bore the brunt of his considerable temper.
Third Party Sellers
The fact that third-party selling on Amazon wasn’t working meant, to Bezos, only that it wasn’t working at that particular moment.
If Amazon wanted to host other sellers on its site, it would have to list their wares right alongside its own products on the pages that customers actually visited. “It was a great meeting,” says Jeff Blackburn. “By the end of the day we all felt one hundred percent sure that this was the future”
Customers got to choose whether to purchase the item from Amazon itself or from a third-party seller. If they chose the latter, the company would lose the sale but collect a small commission. “If somebody else can sell it cheaper than us, we should let them and figure out how they are able to do it.”
“Imagine you’re the guy on the hook for a zillion dollars’ worth of inventory and this other lunatic comes over putting low-priced crap on your page. You can bet that leads to some squabbles.” The new strategy would result in years of tension. Bezos didn’t care about any of that, as long as it offered more choices to customers. With a single brilliant and nonintuitive strategic move, he managed to upset almost everybody, even his own colleagues. “As usual,” says Mark Britto, “it was Jeff against the world.”
Costco buys in bulk and marks up everything at a standard, across-the-board 14 percent, even when it could charge more. It doesn’t advertise at all, and earns most of its gross profit from the annual membership fees.
That July, as a result of the Sinegal meeting, Amazon announced it was cutting prices of books, music, and videos by 20 to 30 percent. “There are two kinds of retailers: there are those folks who work to figure how to charge more, and there are companies that work to figure how to charge less”
!!! Lower prices led to more customer visits. More customers increased the volume of sales and attracted more commission-paying third-party sellers to the site. That allowed Amazon to get more out of fixed costs like the fulfillment centers and the servers needed to run the website. This greater efficiency then enabled it to lower prices further. Feed any part of this flywheel, they reasoned, and it should accelerate the loop.
!!! They felt that, after five years, they finally understood their own business. But when Warren Jenson asked Bezos if he should put the flywheel in his presentations to analysts, Bezos asked him not to. For now, he considered it the secret sauce
Bezos felt that word of mouth could deliver customers to Amazon. He wanted to funnel the saved marketing dollars into improving the customer experience and accelerating the flywheel.
Free Super Saver Shipping
Amazon would divide its customers into two groups: those whose needs were time sensitive, and everyone else. The company could then reduce the expense of free shipping, because workers in the fulfillment centers could pack those free-shipping orders in the trucks that Amazon sent off to express shippers whenever the trucks had excess room. Bezos loved it.
End Of The Editorials
An algorithm called Amabot brought about the downfall of editorial. The system handily won a series of tests and demonstrated it could sell as many products as the human editors.
in moving quickly to satisfy Bezos’s open-ended goal to store and ship everything, they had created a system that was expensive and unreliable “It was a mess”
Allgor and his supply-chain algorithms team would become Amazon’s secret weapon, devising mathematical answers to questions such as where and when to stock particular products within Amazon’s distribution network and how to most efficiently combine various items in a customer’s order in a single box.
Communication Is Bad / Company Structure
I understand what you’re saying, but you are completely wrong,” he said. “Communication is a sign of dysfunction. It means people aren’t working together in a close, organic way.”
“A hierarchy isn’t responsive enough to change”
He wanted doers—engineers, developers, perhaps merchandise buyers, but not managers
“Autonomous working units are good. Things to manage working units are bad”
two-pizza teams. Employees would be organized into autonomous groups of fewer than ten people—small enough that, when working late, the team members could be fed with two pizza pies. These teams would be independently set loose on Amazon’s biggest problems. They would likely compete with one another for resources and sometimes duplicate their efforts, replicating the Darwinian realities of surviving in nature.
“Was distribution a commodity or was it a core competency? If it’s a commodity, why invest in it?”
The equipment and software from third-party vendors simply wasn’t designed for the task at hand. Amazon would have to rewrite all the software code.
One by one, we unplugged our vendors’ modems and we watched as their jaws hit the floor, they couldn’t believe we were engineering our own solutions.”
Amazon’s operating all of its own technology, from the supply chain to the website, allowed them to create algorithms that modeled countless scenarios for each order so systems could pick the one that would yield the quickest and cheapest delivery
Wilke started his negotiations with UPS that summer in Louisville, ahead of a September 1 contract deadline. When UPS was predictably obstinate about deviating from its standard rate card, Wilke threatened to walk. UPS officials thought he was bluffing. Wilke called Jones in Seattle and said, “Bruce, turn them off.” “In twelve hours, they went from millions of pieces [from Amazon] a day to a couple a day” says Jones, who flew to Fernley to watch the fallout.
Yes, we could have operated mostly without them,” Wilke says. “But it would have been very hard, very painful. They knew that. I didn’t want to leave them, I just wanted a fair price.
Being an unstore meant, in Bezos’s view, that Amazon was not bound by the traditional rules of retail. It had limitless shelf space and personalized itself for every customer. It allowed negative reviews in addition to positive ones, and it placed used products directly next to new ones so that customers could make informed choices.
Amazon had to concern itself only with what was best for the customer. The conventions of the jewelry business allowed routine 100 or 200 percent markups, but, well, that just didn’t apply to Amazon
I know you’re retailers and I hired you because you are retailers,” Bezos said. “But I want you to understand that from this day forward, you are not bound by the old rules.”
“It was never about the seventy-nine dollars. It was really about changing people’s mentality so they wouldn’t shop anywhere else”
the shipping club was now top priority. “This is a big idea”
A speedy shipping club for consumers whose needs were time sensitive and who weren’t price conscious? He suggested that it could work like a music club, with a monthly charge.
There was no clear way to break even. “We made this decision even though every single financial analysis said we were completely crazy to give two-day shipping for free”
the introduction of Amazon Prime was an act of faith.
Bezos was going on gut and experience. He knew that Super Saver Shipping had changed customers’ behavior. He also knew from 1-Click ordering that when friction was removed from online shopping, customers spent more.
!!! Prime would eventually justify its existence. The service turned customers into Amazon addicts who gorged on the almost instant gratification of having purchases reliably appear two days after they ordered them. Signing up for Amazon Prime was like going from a dial-up to a broadband Internet connection.” The shipping club also keyed off a faintly irrational human impulse to maximize the benefits of a membership club one has already joined.
The Rise Of Google
Google’s valuation was more than four times Amazon’s, and it had been public for less than a year. Fixed-price online retail was simply out of vogue.
Both Amazon and eBay had to compete with each other to advertise on Google. They were essentially paying a tax to Google on sales that began with a search.
Google began to suck engineers out of Amazon en masse
From Retail To Tech Company
He simply refused to accept Amazon’s fate as an unexciting and marginally profitable online retailer. “There’s only one way out of this predicament,” he said repeatedly to employees during this time, “and that is to invent our way out.”
“You climb the top of the first tiny hill and from there you see the next hill.”
At ten years old, Amazon could be a deeply unhappy place to work. The stock price was flat, there were strict limits on annual raises, and the pace was unrelenting.
In the engineering department, employees were constantly trying to fix a technical infrastructure that was now an aging, sprawling mess.
The world’s best engineers were fleeing a poisonous Amazon culture and flocking to Google and other hot Internet companies in Silicon Valley.
He needed a dramatic breakthrough.
Amazon Web Services
Atlas said that while working on the S3 project, he frequently had difficulty grasping just how big Bezos was thinking. Bezos told him, “This has to scale to infinity with no planned downtime. Infinity!”
The primitives that Amazon would subsequently turn into Web services, from storage and computing to database, payments, and messaging: “We tried to imagine a student in a dorm room who would have at his or her disposal the same infrastructure as the largest companies in the world”
!!! The best analogy that I know is the electric grid,” Bezos said. “You go back in time a hundred years, if you wanted to have electricity, you had to build your own little electric power plant. As soon as the electric power grid came online, the factories dumped their electric power generator, and they started buying power off the grid. It just makes more sense. And that’s what is starting to happen with infrastructure computing.
He didn’t want to repeat “Steve Jobs’s mistake” of pricing the iPhone in a way that was so fantastically profitable that the smartphone market became a magnet for competition. The comment reflected his distinctive business philosophy. Bezos believed that high margins justified rivals’ investments in research and development and attracted more competition, while low margins attracted customers and were more defensible. (He was partly right about the iPhone)
!!! Google chairman Eric Schmidt said it was at least two years before he noticed that the founders of seemingly every startup he visited told him they were building their systems atop Amazon’s servers. “All of the sudden, it was all Amazon,” Schmidt says. “It’s a significant benefit when every interesting fast-growing company starts on your platform.”
The creatures were evolving in ways that Bezos could not have imagined. It was the combination of EC2 and S3—storage and compute, two primitives linked together—that transformed both AWS and the technology world.
Finally, after years of setbacks and internal rancor, Amazon was unquestionably a technology company.
E-books seemed like a technological dead-end and a hopeless medium—to almost everyone
He started a secretive Silicon Valley skunkworks with the mysterious name Lab126. The hardware hackers at Lab126 were given a difficult job: they were to disrupt Amazon’s own successful bookselling business with an e-book device.
!!! “We were freaking out over what the iPod had done to Amazon’s music business”
!!! “It is far better to cannibalize yourself than have someone else do it”
!!! “We didn’t want to be Kodak”
Great companies fail not because they want to avoid disruptive change but because they are reluctant to embrace promising new markets that might undermine their traditional businesses and that do not appear to satisfy their short-term growth requirements.
!!! Your job is to kill your own business,” he told him. “I want you to proceed as if your goal is to put everyone selling physical books out of a job.”
Nothing like that had been tried before. Bezos insisted that customers should never have to know the wireless connection was there or even pay for access. “I thought it was insane, I really did,” Parekh says
Here’s my scenario, I’m going to the airport. I need a book to read. I want to enter it into the device and download it right there from my car.” “But you can’t do that,” Hobbs replied. “I’ll decide what I can do,” Bezos said. “I’ll figure this out and it is not going to be a business model you understand. You are the designers, I want you to design this and I’ll think about the business model.”
Pressuring The Publishers
“Amazon isn’t happening to the book business, The future is happening to the book business.”
Publishers didn’t really understand Amazon. They were very naïve about what was going on with their back catalog,” says Goss. “Most didn’t know their sales were up because their backlist was getting such visibility.” Amazon had an easy way to demonstrate its market power. When a publisher did not capitulate and the company shut off the recommendation algorithms for its books, the publisher’s sales usually fell by as much as 40 percent. “Typically it was about thirty days before they’d come back and say, Ouch, how do we make this work?”
Miller took an almost sadistic delight in pressuring book publishers to give Amazon more favorable financial terms.
The company had finally learned the tricks of the century-old trade that is modern retail. Profit margin is finite. Better financial terms with suppliers translate directly into a healthier bottom line—and create the foundation on which everyday low prices become possible.
Now suppliers needed Amazon more than Amazon needed them
100.000 Digital Books Available On Kindle
In the midst of this changing landscape, Amazon started to pitch publishers on the Kindle.
Toward the goal of one hundred thousand e-books: “I described my job as dragging publishers kicking and screaming into the twenty-first century”
Publishers felt caught up in a schizophrenic assault by Amazon that combined supplication and threats and alternated urgency with delay.
“It seems clear to me that the insanity being directed at us was coming directly from Jeff Bezos, who had some mania about a magic number that needed to be hit about the number of titles available on the Kindle on the word go”
$9.99 Price For All Ebooks
Amazon knew quite well that publishers would absolutely hate the $9.99 price. The pricing pulled the rug out from under traditional retailers,
Amazon decided not to let publishers know about the planned $9.99 price, lest they object.
I think we were absolutely naïve in agreeing to supply those files without any caveats around them,” says another executive at a big-six publisher “If I could rewrite history I would have said, ‘Thanks so much, I love the idea of the Kindle, but let’s have an agreement that says you will not sell below the cost.’ I feel like I was asleep at the tiller.”
The new low price for top-selling e-books changed everything. It tilted the playing field in the direction of digital, putting additional pressure on physical retailers, threatening independent bookstores, and giving Amazon even more market power.
Hitting It Big
Prime, the two-day shipping service, was an engine spinning the company’s flywheel ever faster.
!!! Customers who joined Prime doubled, on average, their spending on the site.
Amazon was enjoying operating leverage—it was getting more out of its assets, and its famously microscopic profit margins started to expand.
eBay’s was flying apart. The appeal of online auctions had faded; a customer wanted the convenience and certainty of a quickly completed purchase
“In order to be a two-hundred-billion-dollar company, we’ve got to learn how to sell clothes and food,” Bezos said frequently to colleagues during this time.
Every major company faces decisions over whether it should build or buy new capabilities. “Jeff almost always prefers to build it”
But not this time.
Endless – Amazon’s own site for shoe shopping – offered free overnight shipping and free returns. The deal ensured Amazon would lose money on each sale. But it would clearly apply pressure to a certain company in Las Vegas – Zappos. The Zappos board members matched it with free overnight shipping.
inside Zappos, a big problem had emerged. It had been acquiring inventory with a revolving $100 million line of credit, and the financial crisis froze the capital markets.
That’s when Amazon hit.
The Great Recession As Cloaking Device / Amazon Stock Going Big
!!! The great recession was in some ways a gift to Amazon. The crisis not only drove Zappos into Amazon’s arms but also significantly damaged the sales of the world’s largest offline retail chains, sending executives scurrying into survival mode. Desperate to protect their profit margins, many retailers reacted by firing employees, cutting down their product assortment, and lowering the overall quality of their service, and this just as Bezos was investing in new categories and more rapid distribution. The economic crisis served as a kind of cloaking device, hiding Amazon’s evolution into a dangerous diversified competitor. Retailers were scared, but the bogeyman was the reeling global economy and declining consumer spending, not Amazon
Walmart.com lowered its prices again, Amazon matched it again. It was just the kind of price pressure from Walmart that Amazon executives had always worried about—but it came ten years too late to do Amazon any harm.
The world was broadly recognizing Amazon’s potential—the power of Prime and of Amazon’s mighty fulfillment network, the promise of AWS, and the steady gains seen in Asia and Europe. Analysts en masse upgraded their ratings on Amazon’s stock. For the first time, Amazon was spoken in the same breath as Google and Apple—not as an afterthought, but as an equal.
There is a clandestine group inside Amazon, which buys large volumes of products from competitors and measures the quality and speed of their services. Its mandate is to investigate whether any rival is doing a better job than Amazon.
The money-losing Amazon Mom program was obviously introduced to help kill Diapers.com and force a sale. A month after the acquisition, Amazon closed the program to new members. But by then the Federal Trade Commission was reviewing the deal, and a few weeks after it closed the program, Amazon reversed course and reopened it, though with much smaller discounts
Bezos had won again, neutralizing an incipient competitor and filling another set of shelves in his everything store.
Bezos had ruthlessly engineered another acquisition by driving his target off a cliff. Says one observer who had a seat close to the battle, “They have an absolute willingness to torch the landscape around them to emerge the winner.
Manufacturers are not allowed to enforce retail prices for their products. But they can decide which retailers to sell to, and one way they wield that power is by setting price floors with a tool called MAP, or minimum advertised price.
Bezos sees it as his company’s mission to drive inefficiencies out of the supply chain and deliver the lowest possible price
Amazon executives view MAPs and similar techniques as the last vestiges of an old way of doing business, gimmicks that inefficient companies use to protect their bloated margins. Amazon has come up with countless workarounds
Apple in particular keeps Amazon on a tight leash, giving it a limited supply of iPods but no iPads or iPhones.
Amazon closely monitors what third-party vendors on the Amazon Marketplace sell, notices any briskly selling items, and often starts selling those products itself.
!!! Amazon’s own employees have compared third-party selling on the site to heroin addiction—sellers get a sudden euphoric rush and a lingering high as sales explode, then progress to addiction and self-destruction when Amazon starts gutting the sellers’ margins and undercutting them on price
Becoming a Book Publisher / Gatekeepers
Book publishers were refusing to play by Amazon’s rules. So Amazon decided to reinvent the rulebook. It started a New York–based publishing imprint with the lofty ambition to publish bestselling books by big-name authors—the bread-and-butter of New York’s two-century-old book industry.
Amazon’s founder repeatedly suggested he had little reverence for the old “gatekeepers” of the media. This was to be a new age of creative surplus, where it was easy for anyone to create something and allow the market to determine the proper economic reward.
A kind of industrywide immune response then kicked in. The book world rejected Amazon’s new publishing efforts en masse
“Apple, Nike, Disney, Google, Whole Foods, Costco and even UPS strike me as examples of large companies that are well-liked by their customers. Walmart, Microsoft, Goldman Sachs, and ExxonMobil tended to be feared.”
Not cool: rudeness, defeating tiny guys, close-following, conquerors, capturing all the value only for the company, pandering to the crowd, hypocrisy, mercenaries
Cool: young, risk taking, winning, polite, defeating bigger unsympathetic guys, inventing, explorers, empowering others, leadership, conviction, straightforwardness, authenticity, thinking big, the unexpected, missionaries
Lubricants? / The Question Mark Escalation
He started the meeting with his customary “Hello, everybody,” and followed that with “So, Steve Shure is sending out e-mails about lubricants.” Bezos didn’t sit down. He locked eyes with Shure. He was clearly fuming. “I want you to shut down the channel,” he said. “We can build a one-hundred-billion-dollar company without sending out a single fucking e-mail.”
No amount of revenue was worth jeopardizing customer trust. It was a revealing—and confirming—moment. He was willing to slay a profitable aspect of his business rather than test Amazon’s bond with its customers.
Eventually, they compromised. E-mail marketing for certain categories such as health and personal care was terminated altogether.
!!! The company relies on metrics to make almost every important decision. Yet random customer anecdotes, the opposite of cold, hard data, also carry tremendous weight and can change Amazon policy. If one customer has a bad experience, Bezos often assumes it reflects a larger problem and escalates the resolution of the matter inside his company with a question mark.
While he was charming and capable of great humor in public, in private, Bezos could bite an employee’s head right off.
“It was brutal. I almost quit. I was a resource of his that failed. An hour later he would have been the same guy as always. He can compartmentalize like no one I’ve ever seen.”
He devotes his full attention to the conversation, and, unlike many other CEOs, he never gives you the sense that he is hurried or distracted
Bezos thought analytically about everything, including social situations. Single at the time, he started taking ballroom-dance classes, calculating that it would increase his exposure to what he called n+ women. He later famously admitted to thinking about how to increase his “women flow,” a Wall Street corollary to deal flow, the number of new opportunities a banker can access.
“If you’re not good, Jeff will chew you up and spit you out. And if you’re good, he will jump on your back and ride you into the ground.
He had seen firsthand how technology, patience, and long-term thinking could pay off.
Jeff does a couple of things better than anyone I’ve ever worked for,” Dalzell says. “He embraces the truth. A lot of people talk about the truth, but they don’t engage their decision-making around the best truth at the time. “The second thing is that he is not tethered by conventional thinking. What is amazing to me is that he is bound only by the laws of physics. He can’t change those. Everything else he views as open to discussion.
Bezos often said that Amazon had a “willingness to be misunderstood,” which was an impressive piece of rhetorical jujitsu—the implication being that its opponents just didn’t understand the company
!!! Steady progress toward seemingly impossible goals will win the day. Setbacks are temporary. Naysayers are best ignored
“we don’t make money when we sell things. We make money when we help customers make purchase decisions”
“Physically, I’m a chicken. Mentally, I’m bold.”
“Do I need to go down and get the certificate that says I’m CEO of the company to get you to stop challenging me on this?”
“Are you lazy or just incompetent?”
Unlike other technology companies, Amazon backloads the grant toward the end of the four-year period. Employees typically get 5 percent of their shares at the end of their first year, 15 percent their second year, and then 20 percent every six months over the final two years.
It was a multidecade project. The notion that he can accomplish a huge amount with a larger time frame, if he is steady about it, is fundamentally his philosophy
“for many years we were on a journey to figure out if we could get to same-day delivery.”
!!! “We are genuinely customer-centric, we are genuinely long-term oriented and we genuinely like to invent.”
the Bezos Theory of Communicating.” Bezos takes a red pen to press releases, product descriptions, speeches, and shareholder letters, crossing out anything that does not speak simply and positively to customers.
Have Backbone; Disagree and Commit: Leaders are obligated to respectfully challenge decisions when they disagree
We try not to spend money on things that don’t matter to customers. There are no extra points for headcount, budget size or fixed expense.
Managers in departments of fifty people or more must dismiss the least effective performers.
This is what, for employees, is so absolutely scary and impressive about the executive team. They force you to look at the numbers and answer every single question about why specific things happened
“Every time we hire someone, he or she should raise the bar for the next hire, so that the overall talent pool is always improving”
Miller knew nothing about toy retailing, but in a pattern that would recur over and over, Bezos didn’t care. He was looking for versatile managers—he called them “athletes”—who could move fast and get big things done
Values: customer obsession, frugality, bias for action, ownership, and high bar for talent. Later Amazon would add a sixth value, innovation.
At least one anointed bar raiser would participate in every interview process and would have the power to veto a candidate who did not meet the goal of raising the company’s overall hiring bar. Even the hiring manager was unable to override a bar raiser’s veto.
Jeff slammed his hand on the table and said, ‘That is not how an owner thinks! That’s the dumbest idea I’ve ever heard.’ “Of course everyone else was thinking [executives should be allowed to fly business-class], but I was the exposed nail in the room,” Price says
Bezos began the meeting by asking Price what the customer wait times were. Price then violated a cardinal rule at Amazon: he assured Bezos that they were well under a minute but without offering much in the way of proof. Really?” Bezos said. “Let’s see.” On the speakerphone in the middle of the conference table, he called Amazon’s 800 number. Incongruously cheerful hold music filled the room. Bezos took his watch off and made a deliberate show of tracking the time. A brutal minute passed, then two
The famous wooden door desks