23. 5 Profound Lessons I Learned From Reading Jeff Bezos Letters To Amazon Shareholders
Feb 28, 2018
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Learn valuable insights from Jeff Bezos' letters to shareholders, including the importance of long-term thinking, customer obsession, and adapting for survival. Understand how short-sighted choices can impact future success and why constantly thinking about market changes is crucial. Discover the cult-like culture at Amazon and the Darwinian reality of survival in the business world.
Long-term thinking leads to greater success and a better life.
Customer obsession ensures long-term customer satisfaction over short-term profits.
Amazon's radical cult-like culture motivates employees and promotes continuous improvement.
Deep dives
Long-Term Thinking: The Key to Success
Jeff Bezos emphasizes the importance of long-term thinking in his letters to shareholders. While most people focus on instant gratification, Bezos considers the second, third, fourth, and fifth order consequences of his decisions. He believes that making choices based on long-term benefits, even if they sacrifice short-term gains, leads to a better life and greater success.
Customer Obsession: Putting Customers First
Bezos prioritizes customer obsession as a guiding principle at Amazon. Instead of being competitively focused or profit-driven, he ensures that decisions are based on what's best for the customer. Bezos understands that by treating customers well, they will reward the business in return. He encourages others to adopt this principle and make decisions that prioritize long-term customer satisfaction over short-term profits.
Benjamin Graham Worldview: Focus on Future Cash Flows
Bezos draws from Benjamin Graham's book, 'The Intelligent Investor,' to shape his worldview on measuring business performance. Instead of fixating solely on short-term profits or market reactions, Bezos focuses on long-term future cash flows. By considering what will generate the most cash flow in the future, Bezos aligns his decision-making with the sustainability and growth of Amazon.
Radical Cult-Like Culture: Building a Strong Company Culture
Amazon stands out for its radical and cult-like company culture, which emphasizes work ethic, frugality, rejecting conventional thinking, and focusing on achieving goals. Bezos has created an ecosystem within the company where teams compete for resources, ensuring continuous improvement. By establishing a strong culture that aligns everyone's actions, Amazon has built a highly motivated and effective workforce.
Survival of the Fittest: Adapting to the Changing Business Landscape
Bezos employs the concept of survival of the fittest within Amazon. He constantly challenges and pushes teams to compete against each other, adapting to the changing business landscape. Bezos recognizes the need for businesses to evolve and be ahead of the curve, akin to nature's principle of adaptation for survival. This approach keeps Amazon agile and enables it to outperform competitors.
If there's anybody in the world you should learn from, Jeff Bezos should be one of them.
Bezos has grown Amazon to be the most valuable company in the world and from that, he’s also the richest man in the world. Success leaves clues -- And since Amazon is a public company, Bezos has left a carefully articulated set of clues that dates back to Amazon's inception -- Amazon’s annual letters to shareholders. Every year Bezos writes a 1-3 page letter to his shareholders where he reports on the progress their making at Amazon as well as his predictions for the future.
Below is a list of the five things that I took away from the letters:
1. It's all about the long-term
2. Customer obsession
3. Benjamin Graham worldview
4. Radical cult-like culture
5. The Darwinian reality of surviving in nature
I explain all of these in detail in the podcats -- make sure you hear it in full because there's a lot of gold nuggets you don't want to miss!
Also, I compiled all of the letters from 1997-2017 for you into one easy-to-read pdf which you can download for free here: