20 Years of Wisdom From Amazon’s Jeff Bezos


Love him or hate him, there’s some inspiring stuff here for sure.

When it comes to shareholder letters, none are more popular than the annual missive from Berkshire Hathaway‘s Warren Buffett. And rightfully so: Buffett is arguably the world’s greatest investor, and his pithy wisdom is easy for everyone to digest.

But there’s another founder/CEO giving Buffett a run for his money: Over the last 20 years, Amazon‘sJeff Bezos has been putting pen to paper and churning out the same type of actionable wisdom we should all be reading.

Here’s the most important nugget from each one of those 20 letters.

1997: We’re focused on the long term

From the outset, Bezos made it clear that he would ignore Wall Street’s modus operandi and focus on the uber-long-term:

Because of our emphasis on the long term, we may make decisions and weigh trade-offs differently than some companies. … We will continue to make investment decisions in light of long-term market leadership … rather than short-term … Wall Street reactions.

1998: Here’s how you hire right

This year’s snippet is somewhat out of context from the rest, but it still offers insight into how the company hired some of the brightest minds available in the late 1990s:

During our hiring meetings, we ask people to consider three questions before making a decision:

  • Will you admire this person? …

  • Will this person raise the average level of effectiveness of the group they’re entering? …

  • Along what dimensions might this person be a superstar?

1999: E-shopping is as bad as it’ll ever be

It might seem obvious now, but Bezos very clearly foresaw how e-commerce would change over time.

The current online shopping experience is the worst it will ever be … but it will get so much better.

The real Jedi mind trick is accepting this: Bezos would probably say the online shopping experience right now is much worse than it will be moving forward.

2000: We’re learning from our mistakes

Like all dot-coms, Amazon suffered when the tech bubble burst. Bezos admits that he, too, got carried away:

In retrospect, we significantly underestimated how much time would be available to enter these categories and underestimated how difficult it would be for single-category e-commerce companies to achieve the scale necessary to succeed.

2001: Here’s why we’ve started cutting prices

Starting in 2001, the company started lowering prices on goods. The “loop” he mentions below will be covered in MBA classes for decades:

Focus on cost improvement makes it possible for us to afford to lower prices, which drives growth. Growth spreads fixed costs across more sales, reducing cost per unit, which makes possible more price reductions. Customers like this, and it’s good for shareholders. Please expect us to repeat this loop.

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