Amazon recently reported its earnings from the second quarter of the year, showcasing a profit of just $197 million on some really strong sales of $38 billion. Their profits have dropped by a whopping 77 percent from $857 million this time a year ago. The main reason being Amazon's aggressive investments in its own business.
Ergo, the CEO of Amazon, Jeff Bezos now dwindles down to number two spot amongst the richest men in the world. After his long stint being the number one, now probably, the Microsoft co-founder, Bill Gates would be back on the number one spot with a fortune of 90.8 billion.
But given the constant fluctuations in the market cap for both Amazon and Microsoft, and as both the companies continue to grow at a swift pace, it's highly likely the two billionaires will trade the title back and forth a number of times in the coming months.
But there are some life lessons that we all must learn and adapt from Jeff.
"If you're not stubborn, you'll give up on experiments too soon. And if you're not flexible, you'll pound your head against the wall and you won't see a different solution to a problem you're trying to solve.The thing about inventing is you have to be both stubborn and flexible, more or less simultaneously. The hard part is figuring out when to be which!"
Bezos seems to believe in small, autonomous groups. (Maybe the roots for this go back to his days as a startup CEO) He believes in a "two pizza rule" for teams, meaning that the groups should be small enough to feed with only two pizzas. This generally works out to about 5 to 7 people in a team.
At Amazon, the two-pizza teams have created the Gold Box feature that we still see today!
"If you double the number of experiments you do per year you're going to double your inventiveness."
"At Amazon, experimentation and willingness to invent has always been a part of the culture. It's not secondary or something that has to be done because everyone else does it."
Ever noticed how many products and services Amazon offers? You can trace that back to Bezos's philosophy of rapid experimentation and invention. In this sense, Bezos is the anti-Steve Jobs. Apple offers only a few products, but Amazon offers dozens. At the bottom of the Amazon homepage, you can see the wide range of different products and services they offer!
If you can know only one thing about Bezos, it should be that he thinks long term.
Once, when asked about Amazon's revenue growth, Bezos couldn't even remember the exact growth percentage, something rare for a CEO. When asked why he didn't know, he said:
"I'm thinking a few years out. I've already forgotten those numbers."
Innovation = Experimentation + Willingness to Invent
"There are a few things…if you want to be an innovative company that you have to do. First of all, I think innovation is a point of view. You have to actually select people that are a part of the company who want to innovate and explore. Being a pioneering company and an explorer company isn't for everybody."
"Focusing on the customer makes a company more resilient. We're not competitor obsessed, we're customer obsessed. We start with the customer and we work backwards."
"I very frequently get the question: 'what's going to change in the next 10 years?' And that is a very interesting question; it's a very common one. I almost never get the question: 'what's not going to change in the next 10 years?' And I submit to you that that second question is actually the more important of the two – because you can build a business strategy around the things that are stable in time….in our retail business, we know that customers want low prices and I know that's going to be true 10 years from now. They want fast delivery, they want vast selection. It's impossible to imagine a future 10 years from now where a customer comes up and says, 'Jeff I love Amazon, I just wish the prices were a little higher [or] I love Amazon, I just wish you'd deliver a little more slowly.' Impossible."
"Good entrepreneurs don't like risk; they seek to reduce risk…Starting a company is already risky, and then you systematically eliminate risk step by step in those early days….you kind of need to systematically identify risk and then as the company gets bigger and more robust, you can start taking risks again but in those early days a lot of it is about 'okay I have a good idea, how do we reduce risk?'"
When Bezos was thinking about building Amazon, he had to decide whether to start the company or keep his good job on Wall Street. He created a framework to use for making the decision that he calls a Regret Minimization Framework. It helped him realize he didn't want to not do it and regret it later. This fear of regret is one of the key reasons why he decided to go ahead and start Amazon.
That's all, mates. You can reach out to me on firstname.lastname@example.org.