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1/ Last week I read every Amazon shareholder letter starting in 1997.
I wanted to share a few takeaways about what I think are the key drivers of Amazon success as expressed in the shareholder letters.
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I wanted to share a few takeaways about what I think are the key drivers of Amazon success as expressed in the shareholder letters.
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2/ Bezos has a phrase he likes to repeat: It remains Day 1.
He mentions it at the very beginning of the first shareholder letter: "this is Day 1 for the internet and, if we execute, well, for Amazon.com"
He mentions it at the very beginning of the first shareholder letter: "this is Day 1 for the internet and, if we execute, well, for Amazon.com"
3/ Key to the Day 1 philosophy is a sense of urgency: you must keep that same sense of urgency that existed on Day 1 of starting the company when it felt like everything could disappear.
4/ They even named the biggest building on the Amazon campus, a 521 ft. tall skyscraper, Day 1.
5/ And he continued repeating it in 1998 and nearly every subsequent shareholder letter
6/ One way that this Day 1 philosophy is expressed is that Amazon shareholder letters are very focused on mentioning new products.
Here’s the 2008 shareholder letter talking about Kindle
Here’s the 2008 shareholder letter talking about Kindle
7/ Naval has talked about how shipping is the number one predictor of whether a company will reach product market fit
8/ The mantra of Day 1 is a way for Bezos to continually reinforce that perception: we are still at Day 1 and so the speed of innovation must continue.
9/ Day 1 also implies a certain attitude towards risk. On Day 1 of a company, you aren’t afraid to take big risks and make big changes because you have nothing to lose.
10/ In the 2015 letter, he brought up how Marketplace, one of Amazon’s most successful decisions, was born out of failure to encourage innovation.
11/ In the 2016 shareholder letter, he talked about how he wanted Amazon to be a “large company that’s also an invention machine”
12/ There is a distinction betweetn Type 1 and Type 2 Decisions
Type 1 Decisions are big and irreversible
Type 2 Decisions are smaller and easy to change
Type 1 Decisions are big and irreversible
Type 2 Decisions are smaller and easy to change
13/ The tendency as companies get bigger is to use Type 1 decision making (heavy-weight and slow) on most decisions, inlcuding Type 2
14/ This inertia has to be fought. Even at scale, most decisions should be made by the frontline without consulting management.
John Boyd advocated a very similar philosophy of pushing decision making down the hierarchy - taylorpearson.me/ooda-loop/
John Boyd advocated a very similar philosophy of pushing decision making down the hierarchy - taylorpearson.me/ooda-loop/
15/ It's Always Day 1 means:
1. Maintain a high shipping cadence and sense of urgency
2. Keep taking smart risks and don't become loss averse
3. Keep almost all decision making fast and handled by the person at the frontline.
1. Maintain a high shipping cadence and sense of urgency
2. Keep taking smart risks and don't become loss averse
3. Keep almost all decision making fast and handled by the person at the frontline.
16/ Let me know if this was helpful, other big themes I'd like to cover from the letters are:
How to Be Customer-centric
How to Think Long-term
How to Hire Well and Establish a Strong Culture
How Make Bold Decisions and Make Them Quickly
How to Establish Market Leadership
How to Be Customer-centric
How to Think Long-term
How to Hire Well and Establish a Strong Culture
How Make Bold Decisions and Make Them Quickly
How to Establish Market Leadership
17/ Part 2 on How to Be Customer-centric:
