The fundamental difference between Amazon and other companies is its extreme focus on the long term. From the start, Bezos was driven by an immense vision and he knew that it would take decades to come to fruition.
Jeff Bezos’ private and non-Amazon projects are also a testament to his long-term thinking.
He’s currently financing the construction of an underground clock in Texas that is designed to run for 10,000 years with hardly any maintenance. Danny Hills, the inventor of the clock, says that the Clock of the Long Now will only tick once per year. The “century hand” moves once every 100 years and, after every millennium, a cuckoo comes out of the clock and sings.
If all goes as planned, this iconic creation will become a major attraction. The idea behind the clock is to give people a feeling for wider time horizons and to defend long-term thinking. Similarly, it wants to change our perspective of time – in the same way that photographs of the earth taken from outer space gave us a new understanding of space.
At the moment, Bezos’ most well-known project is the Blue Origin space program, which focuses on the development of technologies that will make it possible for people to fly into space for far less money and with less difficulty than ever before. Step by step, Blue Origin’s technologies will build on each other and enable more and more flights. The project’s long-term goal is a permanent presence of humans in outer space.
Ever since childhood, Jeff Bezos’ dream has been to fly to outer space – his motivation for the rest of his later efforts to get rich.
During the dot-com boom in the late 1990s, Amazon lost hundreds of millions of dollars buying start-ups on the verge of bursting. Amazon took a rough fall, but the company learned its lesson – it became much more careful when acquiring companies and developed a do-it-yourself culture. It started to make its own products rather than acquiring them from others.
The company has a very bold approach: it’s not afraid to jump into things before analyzing them down to the last detail. Even if that approach results in mistakes, Bezos prefers it to overanalyzing everything first, which often means losing lots of opportunities to try something new that might work.
Bezos is a bona fide doer. His decision to found Amazon in 1994 speaks to that. Most other people would have kept their well-paid job as a hedge fund manager rather than packing up camp and starting an online bookstore at the other end of the country – financed entirely by their own savings and those of their parents.
Since Amazon’s founding, Bezos has always encouraged his employees to risk failure and try new things, which has led to huge setbacks on occasion. One such flop was Amazon Auctions, established in 1999 and unable to hold its ground against eBay. It was discontinued within months. In many other cases, though, taking risks has yielded brilliant innovations such as Amazon’s 1-Click ordering option.
Bezos even went so far as to institute a “Just Do It” award for employees who implemented something remarkable on their own initiative, preferably outside of their own area of activity. The award can also go to employees whose attempt ended in failure, as long as they had acted with resolve and courage in the process.
In line with its thriftiness, Amazon does not award cash prizes, instead giving the winners a pair of huge Nike sneakers that belonged to basketball players.
Once Bezos managed to establish Amazon as an online book retailer, it started to sell music, films, electronic devices and toys. Then he offered third parties an opportunity to sell their own goods, both used and new, on Amazon. Finally, thanks to the Kindle, Amazon also became a central figure in the world of e-books.
What most people don’t know is that Amazon offers a number of additional services, such as the cloud computing service Amazon Web Services (AWS), which turned Amazon from being a purely commercial enterprise into a mix of a store and a tech company. Many businesses, the US government, NASA and the CIA buy storage space and computational power via AWS. The service is the backbone of many online start-ups and provides servers for companies like Instagram and Netflix.
Amazon also changed its own image with AWS: all of a sudden, its customers weren’t only avid readers, but also start-up developers buying terabytes worth of space to solve some of the world’s most exciting problems.
The Kindle also underlines Amazon’s ability to continually recognize and satisfy new customer needs – even before the competition catches wind of them. Bezos realized very early on that his customers were going to need an e-reader in order to read e-books, which were bound to become more popular with time.
Amazon got to work on this issue and developed the Kindle. In November 2007 the first generation of Kindles was launched – and within six hours they sold out (and stayed that way for five months). The Kindle is still a bestseller today. In 2011, Amazon reported that it had sold well over a million devices – and had been doing so every week.
After almost 20 years of constant growth since its launch in Jeff Bezos’ garage, Amazon is coming closer to achieving its original vision of creating an Everything Store.
Still, Bezos doesn’t see that as a justification to sit back and rest on his laurels. As far as he’s concerned, there are still many challenges that need to be addressed before his long-term vision can be fulfilled. He would like to see Amazon provide same-day delivery, and have its own vehicle fleet (with trucks) and grocery business (Amazon Fresh); he also wants to turn Amazon itself into a publisher and media company, to build an Amazon film studio, to produce Amazon smartphones and televisions and, finally, to expand to new countries and maybe even offer a 3D printing service.
Bezos believes nothing is impossible; there’s nothing Amazon can’t do, no product it can’t sell online. He thinks that there’s simply too much left to invent, too much waiting to be discovered in the future – and most people still haven’t the slightest idea of what the internet will make possible. For him, the journey has just begun.
Jeff Bezos’ unique way of thinking made Amazon what it is today: a company that is constantly evolving, one that rewrites the rules day after day and will never stand still. After many grueling years, it has essentially become the Everything Store. Even if its founder thinks he’s just taking off on his journey, right now the company’s turnover is already at $75 billion per year.
Strong customer orientation, long-term thinking and the drive to evolve and improve are the qualities that make Amazon what it is. The company’s unequaled success can undoubtedly be traced back to the way of thinking promoted by its founder, Jeff Bezos. He stands out in particular for his willingness to take risks and try new things, as well as for his future-oriented thinking, which is also exemplified by his other projects, such as a private space program and a 10,000-year clock.
So try these tips from the book out:
a) Rethinking the meeting. As Bezos once said, “Communication is terrible!” – Why don’t you try running your business in line with his philosophy? For example, by only making decisions based on hard facts or by forcing your employees to put their ideas in writing so they think them through before presenting them? If speakers think through their ideas so thoroughly that they can fill six pages of text and all other participants read them in complete silence and take these ideas to heart – will it steer the discussion in a much more sensible direction than in most companies?
b) Two-pizza teams. Jeff Bezos believes that no team should be so big that its members can’t be fed with two pizzas. According to him, a company should be made up of lots of small, autonomous units that are able to organize themselves and compete with one another. As described above, they should be fearless about developing ideas and motivated to solve customer problems. Why not arrange your company into small, independent units that are gauged by the frequency with which they produce something new that pushes the company forward?
Check out my related post: What is Amazon Prime’s ecosystem?