6 Things Jeff Bezos Knew Back in 1997 That Made Amazon a Gorilla from Forbes

November 16, 2011

Amazon CEO Jeff Bezos a

Steve Levy had a really interesting interview with Jeff Bezos earlier this week.

He talks in detail about how he thinks about Amazon (AMZN) and how he runs this business. In my opinion, with Jobs now gone, Bezos is the best CEO in the world. How he’s built the company into an e-commerce juggernaut over the last 15 years is utterly amazing — especially when you consider he was in his early 30s and an ex-quant from D.E. Shaw when he moved out to Seattle and started the company.

One thing I learned a long time ago about really smart people: study, read, or listen to the things that they think are great. It’s a shortcut to greatness. If you can grab a few insights here and there from Bezos or Jobs or whoever, it’s no guarantee you’re going to be great yourself — but you’re certainly going to be further ahead than if you just keep fumbling around in the dark on your own.

One thing jumped out of the Bezos intereview:

Levy: You’ve also given $42 million to the Long Now Foundation for the development of a giant clock designed to last for 10,000 years. Does that project relate at all to what you’re doing at Amazon?

Bezos: It does fit into my view. Our first shareholder letter, in 1997, was entitled, “It’s all about the long term.” If everything you do needs to work on a three-year time horizon, then you’re competing against a lot of people. But if you’re willing to invest on a seven-year time horizon, you’re now competing against a fraction of those people, because very few companies are willing to do that. Just by lengthening the time horizon, you can engage in endeavors that you could never otherwise pursue. At Amazon we like things to work in five to seven years. We’re willing to plant seeds, let them grow—and we’re very stubborn. We say we’re stubborn on vision and flexible on details.

In some cases, things are inevitable. The hard part is that you don’t know how long it might take, but you know it will happen if you’re patient enough. Ebooks had to happen. Infrastructure web services had to happen. So you can do these things with conviction if you are long-term-oriented and patient.

So, after emailing the kind people at Amazon Investor Relations, I located this 1997 letter.

Let me summarize: it’s a manifesto for how Amazon has been run. If you bought in at the first price Amazon started trading at in 1997 and held your shares, you’re up 12,397% (vs. 100% for the Nasdaq).

It boils down to 6 key things that have been critical to the company’s success (and they ring true with many of the values of Steve Jobs at Apple (AAPL) and many other successful companies):

1. When you have a window of opportunity, go for the jugular – even if you have to exhaust a huge number of resources. Critics saw a bottomless pit but Bezos knew he had a time-limited chance to make Amazon an e-commerce leader.

We have a window of opportunity as larger players marshal the resources to pursue the online opportunity and as customers, new to purchasing online, are receptive to forming new relationships. The competitive landscape has continued to evolve at a fastpace. Many large players have moved online with credible offerings and have devoted substantial energy and resources to building awareness, traffic, and sales. Our goal is to move quickly to solidify and extend our current position while we begin to pursue the online commerce opportunities in other areas. We see substantial opportunity in the large markets we are targeting. This strategy is not without risk: it requires serious investmentand crisp execution against established franchise leaders.

2. Think long-term meaning 5 – 7 years, not 5 – 7 months. Jack Ma recently said the same thing at a talk in Hong Kong. It’s smart.

We believe that a fundamental measure of our success will be the shareholder value we create over the long term. This value will be a direct result of our ability to extend and solidify our current market leadership position. The stronger our market leadership, the more powerful our economic model. Market leadership can translate directly to higher revenue, higher profitability, greater capital velocity, and correspondingly stronger returns on invested capital.

Our decisions have consistently reflected this focus. We first measure ourselves interms of the metrics most indicative of our market leadership: customer and revenue growth, the degree to which our customers continue to purchase from us on a repeat basis, and the strength of our brand. We have invested and will continue to invest aggressively to expand and leverage our customer base, brand, and infrastructure as wemove to establish an enduring franchise.

3. Long-term market share is more important than short-term profits because without long-term market share there will be no long-term profits.

We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations orshort-term Wall Street reactions.

4. It’s ok to make mistakes but it’s not ok to be timid.

We will make bold rather than timid investment decisions where we see asufficient probability of gaining market leadership advantages. Some of these investments will pay off, others will not, and we will have learned another valuable lesson in either case.

5. Obsess over Customers. As Bezos said in his Wired interview, the best customer service experience is when they never have to contact you.

From the beginning, our focus has been on offering our customers compelling value. We realized that the Web was, and still is, the World Wide Wait. Therefore, we set out to offer customers something they simply could not get any other way, and began serving them with books. We brought them much more selection than was possible in a physical store (our store would now occupy 6 football fields), and presented it in a useful, easy-to-search, and easy-to-browse format in a store open 365 days a year, 24 hours a day. We maintained a dogged focus on improving the shopping experience, and in 1997 substantially enhanced our store. We now offer customers gift certificates, 1-Click(SM) shopping, and vastly more reviews, content, browsing options, and recommendation features. We dramatically lowered prices, further increasing customer value. Word of mouth remains the most powerful customer acquisition tool we have, and we are grateful for the trust our customers have placed in us. Repeat purchases and word of mouth have combined to make Amazon.com the market leader in online bookselling.

6. Be first in a big market. It’s easy to think now that Amazon was first in a big market, but people assumed at the time they were in a niche market facing established players. But Bezos always had grand ambitions for his company and saw the opportunity. It’s partly why he pushed for a land-grab of market share.

[A]s we’ve long said, online bookselling, and online commerce in general, should prove to be a very large market, and it’s likely that anumber of companies will see significant benefit. We feel good about what we’ve done, and even more excited about what we want to do.

It’s been an amazing run.


Volkswagen gets it… innovation on the highest order

July 25, 2011


Great article from Adam Bryant with Bing Gordon FAVS in Bold

June 26, 2011

Really Great Passage:  A. In hiring, I like in-person meetings for chemistry and I like references for truth.  But, you know, the best predictor of performance is going to be past performance. I will always ask about your learning practices, who are your heroes, what do you read.  I want to know your hobbies, what’s the personal arc you see for your career, where are you trying to get to. I’ve also come to believe that if somebody’s going to be great, they’re going to have a great first week.  And let’s be real explicit about what a great first week is.  My experience is that people who become revered in an organization over the years started really fast.  In the real world, the only leaders who have institutionalized fast starts are U.S. presidents.  You know, they show up and they clean house.  They come in with an agenda for the first 100 days.  They start with a bang. I’ve seen that with people, when they’re promoted to positions of authority, like C.E.O.’s or presidents — the more experienced they are, the faster they learn to make a transition.


 

A. In my world, I read résumés upside down, so I start with personal interests.  So if somebody doesn’t have believable, interesting interests, they’re not going to work in a creative business.  You know, you can’t have a creative organization without individual peccadilloes, so if somebody’s not copped to something interesting, and if they aren’t passionate about something in life, they’re just not going to be able to bring it.  So I start with that.  Then I’ll scan for pattern of achievement.My sense is that people who are used to achieving will keep achieving.  And most people on their résumés report task and process —   “I held this job, and I was responsible for this.  I held this job, and I was responsible for this.” It’s like, O.K., you’re telling that you don’t measure yourself by achievement.  If you don’t even measure yourself by achievement, how are you going to set achievement levels for other people?

 

I think differently.  I’m not a chess player, but I think life is a little like chess.  In chess, every move counts, so every move has got to have offense and defense.  And if you waste a move, you’re increasingly likely to lose.  A thing that I like about the Internet is that stuff moves quickly.  We’re kind of in the fruitful, high-paced natural selection, and that’s appropriate for me.

This interview with Bing Gordon, a partner with the venture capital firm Kleiner Perkins Caufield & Byers, was conducted and condensed by Adam Bryant.

 

Earl Wilson/The New York Times

Bing Gordon, a partner at the venture capital firm Kleiner Perkins Caufield & Byers, says that “I’m kind of teacher-consultant more than wielder of power.”

Corner Office

Every Sunday, Adam Bryant talks with top executives about the challenges of leading and managing. In his new book, “The Corner Office” (Times Books), he analyzes the broader lessons that emerge from his interviews with more than 70 leaders. Excerpt »

Q. Were you in leadership positions early on?

A. I ran the high school newspaper and was in student government.  I played sports my whole life but was never picked as captain.  But even as an 18-year-old, I had to grow comfortable with my leadership style, which is that I was really impatient with under-motivated people — extremely impatient, to the point where I was counterproductive as a manager of underproductive people. And that hasn’t really changed.  If people need to be motivated, I’m no good.

Q. What happens?

A. I get cranky. I stop being polite and I stop looking for win-win opportunities. It’s just: “What?  You’re doing this thing and you’re not trying to do it really well?  I just don’t understand.”  As you grow up, you become more comfortable with your own peccadilloes, and I’m bad with people who aren’t self-motivated.  And now, when I see them coming, I run the other way.

Q. Tell me about the first paid management job.

A. The first time I had a secretary, I was sheepish about being demanding or even asking questions.  A woman was assigned to me named Sandy Fitzgerald, and she said, “You don’t know how to manage an exec assistant, do you?” And I said, “No.”  And she said: “Well, I’m going to teach you. You have to ask for this, you have to do this and you have to do this.”  So it was like Secretary 101.  So it’s actually a lesson for management.  It’s hire people who can teach you how to be their manager and to be real explicit.  I think what a lot of managers know is that you’re owned by the people you’re responsible for.

Q. You were the chief creative officer at Electronic Arts. Now you’re in a different kind of leadership role as a venture capitalist. Can you talk about the differences?

A. Early on, I learned that I’m better with influence than power.  And, in fact, I’m not power-hungry.  My sense is that to be a good operator, you need to be power-hungry.  You need to care more about power than prestige, and probably more about power than money, and more about power than intellectual stimulation.  And people who are good operators tend to want power so they can get stuff done.  They want to wield it.  And there’s a cost to having power, which is that the people you have sway over actually own you, especially if you’re in a business where there are more jobs than there are good people.I like having influence.  I like being with interesting people and helping them become better and being part of the flow of ideas.  And that’s a little bit uncomfortable, as a boss.  It doesn’t make sense to people that the boss, who is kind of a figurehead and maybe a confidence-giving parent figure, just wants to be an experienced helper. As a person of authority, I’m kind of teacher-consultant more than wielder of power.

The fitness function of a venture capitalist — meaning the metrics of performance, the report card — is pretty pure.  You show up with money, and one way or another more money has to come back than goes in.  So I just do stuff I’ve learned over time and work with people who I like who are really motivated, who want to listen to me most of the time and take feedback and then make it their own. And I work in areas that I want to learn about, areas that are fascinating, because fascination is a good thing.

It’s better to work with people who you would pay to be able to work with.  So if you’re working with someone in an area that fascinates you, with people you can add value to and have good conversations with, who are capable and really motivated and you would pay to hang out with them, I’m pretty confident good things would happen.

Q. What were some other important leadership lessons?

A. One is, test yourself at extremes as early as possible.

Q. What do you mean by that?

A. The interesting thing about team sports is that it’s hard to win all the time, so it’s kind of a true test.  Even Michael Jordan couldn’t win all the time.  You can take yourself all the way to the extreme and you start finding out that with billions of people on the planet, no matter how good you think you are, there’s always somebody better and you can’t bring it equally every day.  So sports is a good real-world test.  I think that living in cities is a good real-world test.  Trying to make it in business is a good real-world test.So I’d say, first, be tested somehow in a way that feels legit.  And I don’t think being tested by grown-ups is a legitimate test.  I’ve seen people go to certain universities and get kind of a stamp and that gives them confidence. I’m not sure that that’s a sufficient test.

 

Second, for me, I became a commercial fisherman and it turns out you can die as a commercial fisherman.  And it was at a time for me when boys tend to feel invulnerable, so running up against Mother Nature is kind of the ultimate test.  I mean, commercial fishing is just a factory job, but you can die.

Corner Office

Every Sunday, Adam Bryant talks with top executives about the challenges of leading and managing. In his new book, “The Corner Office” (Times Books), he analyzes the broader lessons that emerge from his interviews with more than 70 leaders. Excerpt »

Q. What were you fishing?

A. Salmon, albacore and shrimp for four years. It was in my 20s. I got out of Yale, I acted in New York for a year and then I commercial-fished and paid for Stanford Business School.  So, more broadly, I think, you want to test yourself against Mother Nature or something that’s as believable as Mother Nature. So my advice is to test yourself against a metaphorical Mother Nature — try to do something and bring people along.

 It turns out that people want leaders who give them confidence.  In a start-up company or in a creative process, there’s turmoil.  Every day feels like you’re looking into the maw of a black hole, and you want somebody around who’s confident, who you think is competent, who can kind of create a floor and say: “Don’t worry.  It’s not going to get worse than this.”

Every leader learns that, especially in turmoil, your No. 1 job is creating confidence, and nobody teaches that.  I think that involves learning on the job.  Once you decide you want to accomplish something in an organization, you kind of get a sense that you’re in a room and people are looking at you and you kind of bear a mantle of responsibility.

Q. Let’s talk about hiring.  How do you do it?

A. In hiring, I like in-person meetings for chemistry and I like references for truth.  But, you know, the best predictor of performance is going to be past performance. I will always ask about your learning practices, who are your heroes, what do you read.  I want to know your hobbies, what’s the personal arc you see for your career, where are you trying to get to. I’ve also come to believe that if somebody’s going to be great, they’re going to have a great first week.  And let’s be real explicit about what a great first week is.  My experience is that people who become revered in an organization over the years started really fast.  In the real world, the only leaders who have institutionalized fast starts are U.S. presidents.  You know, they show up and they clean house.  They come in with an agenda for the first 100 days.  They start with a bang. I’ve seen that with people, when they’re promoted to positions of authority, like C.E.O.’s or presidents — the more experienced they are, the faster they learn to make a transition.

You also learn, as an executive, that if you compromise on the quality of the people you have, you’re signing your own career death warrant.  And once you realize that, it’s like, O.K., sorry, it’s just business.  If they can’t get motivated on their own, I can’t work with them.

Q. This notion of people being motivated on their own is obviously important to you.  Is that something that you get a pretty quick sense of with people?

A. In my world, I read résumés upside down, so I start with personal interests.  So if somebody doesn’t have believable, interesting interests, they’re not going to work in a creative business.  You know, you can’t have a creative organization without individual peccadilloes, so if somebody’s not copped to something interesting, and if they aren’t passionate about something in life, they’re just not going to be able to bring it.  So I start with that.  Then I’ll scan for pattern of achievement.My sense is that people who are used to achieving will keep achieving.  And most people on their résumés report task and process —   “I held this job, and I was responsible for this.  I held this job, and I was responsible for this.” It’s like, O.K., you’re telling that you don’t measure yourself by achievement.  If you don’t even measure yourself by achievement, how are you going to set achievement levels for other people? 

So I tell kids: “You know, I think you’re pretty cool.  What have you done that’s any good?”  And strip out all the history stuff, just tell me what you’re proud of and how you think about it.

So the point is to hire people who look generally competent, who are fun to be with, who kind of have some sense of the ground rules of life and then be really explicit about how to have an opportunity for a really fast start.

Q. I’ve heard a lot of C.E.O.’s say that they like people who come in and just watch, listen and learn for 90 days or so.

A. I think differently.  I’m not a chess player, but I think life is a little like chess.  In chess, every move counts, so every move has got to have offense and defense.  And if you waste a move, you’re increasingly likely to lose.  A thing that I like about the Internet is that stuff moves quickly.  We’re kind of in the fruitful, high-paced natural selection, and that’s appropriate for me. 

But I don’t agree with a slow start.  I’ve seen it in boards.  If a new board member doesn’t even open their mouth in the first board meeting, they’re kind of not an element.  And it’s like, dude or dudette, you’re here because we think you’re really good, and right now you’ve got a silver bullet.  I mean, we’re invested in you.  You mean you showed up and you’re not doing anything?

And I tell people, you need to add something to every meeting you come to.  The risk is blathering, but you need to add something, and you know something that nobody else knows. And can you share that in a minute?  Don’t take a half-hour, but share it in a minute.  If you’re in a meeting, offer something. I don’t believe that companies that do a slow on-ramp are going to keep up.

 


How to Ask for a Reference Letter -by Jodi Glickman

June 26, 2011

Great start two approaching someone to write a reference/recommendation letter.

 

In the 2009 film “Up in the Air,” Natalie Keener decides she can no longer stomach being part of a corporate firing squad and quits her firm. Her mentor, played by George Clooney,behaves as the magnanimous gent we all know him to be: he writes a glowing reference letter on her behalf, addressed simply “to whom it may concern.”

In the real world, getting a reference letter is far more difficult and often a source of much anxiety. Whom to ask, how to ask, what to say?

But getting an outstanding reference letter is entirely within your control and easier than you think, even if you don’t have a benevolent benefactor at your back.

Here are three tips to ensure your mentor, former boss, or academic counselor writes you a rave review:

  1. Highlight their qualifications
  2. Provide a template
  3. Offer a “no questions asked” policy

Let’s look at each of these individually:

Highlight their Qualifications

When reaching out to ask for a letter of reference, explain up front and center why it is that you value that person’s opinion and respect their professional expertise enough so that you chose them (of all people) to vouch for you in your next professional endeavor.

Beyond mere flattery, show why you think that person is uniquely qualified to accurately assess and communicate your personal contribution to your future organization. Why did you enjoy working for them, and why do you value their opinion? Why do you look up to them? How do the qualities match your own, or speak to the authority you want your recommendation to convey?

Provide a Template

It’s almost impossible to get a good reference letter from someone if you don’t provide the tools necessary for them to actually write a good letter. It’s also terribly inconsiderate not to give ample guidance. The last thing anyone wants to do is spend hours or days thinking about and drafting a letter which you yourself could have composed far better and more readily in about half the time.

Providing a template, therefore — an outline, bullet points, or even a fully-baked draft — of what you’d like the reference letter to say is the most effective (not to mention generous and thoughtful) approach to asking for a letter of reference. The goal isn’t to put words into your former colleague’s mouth or to co-opt her into vouching for you in an untrue or disingenuous manner; it’s simply to do some of the work for her and provide all of the pertinent data points that you’d like included in the letter. Moreover, as boastful, bragging or full of yourself you may feel writing your own referral, often people will be even more generous than you will when talking about your skills and contribution to an organization. So go ahead and toot your own horn.

“No Questions Asked”

Finally, once you provide your reviewer with a useful template and make it clear that your intention is to make this process as painless as possible for her, then it’s time to hand over the reins and offer a “no questions asked” policy. First, give your colleague an easy “out” to decline your request for any or no reason. Then, assuming she agrees, give her ample leeway to change, modify or edit your letter as she sees fit. You want to convey a sense of trust in her and give her an opportunity to write a letter she is entirely comfortable with.

Let’s take a look at what this request might actually look like:

Highlight their Qualifications

Dear John,

Hello, I hope you are well. I am writing to ask a huge favor — I’m applying for a senior marketing position with Merck and I was hoping you’d consider writing a letter of recommendation on my behalf. I always appreciated your perspective and judgment while working together. You have so much credibility within the product development space that I thought you’d be a perfect person to act as a reference.

Provide a Template

I have included a list of bullet points along with a draft letter you might consider using as a template. I’d like to make the process as easy as possible on you and I know it’s hard to recall details about the many different projects we worked on together in 2007 and 2008.

“No Questions Asked”

If for any reason you don’t feel comfortable writing a letter on my behalf, I completely understand. If you are willing to do so, however, please feel free to take the attached sample letter and use it as a template however you see fit. I have tried to address my core strengths as a strategic thinker and team player and I have highlighted several marketing campaigns I’m particularly proud of. To the extent that you’d like to make any changes or modifications to the letter, please go ahead and do so. I trust that you’ll include only those topics you feel comfortable commenting upon.

Further, I would welcome the opportunity to see a copy of the letter, but I of course understand your position if you’d like to keep it confidential.

Finally, finish your request with all the grace and charm you can muster — thank the other person profusely for their time and help and offer to make yourself available for any further questions he may have.

Stay tuned for next week’s post on how to write that template and make your reference letter stand out from the pack.


How to make a ringtone for iphone…

June 26, 2011


Work. Work. Work.

June 21, 2011

The harder I work the luckier I get…

 


Big Mac Rap #9

June 17, 2011


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