Invent and Wander

1. Customer obsession drives Amazon's success and innovation

We want Prime to be such a good value that you'd be irresponsible not to be a member.

Relentless focus on customers. Amazon's core philosophy revolves around an obsessive commitment to customer satisfaction. This approach drives innovation, shapes decision-making, and fuels long-term growth. By prioritizing customer needs over competitor actions, Amazon consistently introduces groundbreaking products and services.

Continuous improvement. The company's customer-centric model leads to constant refinement of existing offerings and the development of new ones. Examples include:

• Amazon Prime: Started as a fast, free shipping program, evolved to include streaming services, exclusive deals, and more
• Amazon Web Services (AWS): Born from Amazon's internal needs, now a leading cloud computing platform
• Kindle and Echo: Devices designed to enhance customer experience in reading and home automation

By always asking "What do customers want?" and "How can we make their lives easier?", Amazon stays ahead of market trends and customer expectations.

2. Long-term thinking and willingness to be misunderstood are crucial

If you're competitor focused, you have to wait until there is a competitor doing something. Being customer focused allows you to be more pioneering.

Patient capital allocation. Amazon's approach to business is characterized by a willingness to invest heavily in long-term projects, often at the expense of short-term profits. This strategy allows the company to build robust, industry-leading platforms and services that create lasting value.

Misunderstood innovation. Many of Amazon's most successful ventures were initially met with skepticism:

• AWS: Critics questioned why an e-commerce company was entering cloud computing
• Amazon Prime: The economics initially seemed unsustainable
• Kindle: Doubts about the viability of e-readers in a print-dominated market

By staying committed to its vision despite criticism, Amazon has repeatedly transformed industries and created new market categories.

3. Embrace failure as a necessary part of innovation and growth

If you're going to take bold bets, they're going to be experiments. And if they're experiments, you don't know ahead of time if they're going to work. Experiments are by their very nature prone to failure. But a few big successes compensate for dozens and dozens of things that didn't work.

Culture of experimentation. Amazon fosters an environment where calculated risk-taking is encouraged. This approach allows for rapid innovation and learning from both successes and failures.

Scalable failures. As the company grows, so does the scale of its experiments:

• Fire Phone: A significant failure that led to valuable insights for future hardware projects
• Amazon Go: An ambitious reimagining of retail stores that required years of development

Learning from setbacks. Amazon views failures as opportunities to gain knowledge and refine strategies. This mindset has led to numerous successful pivots and innovations, such as the evolution of Amazon's third-party seller platform from the initial failures of Amazon Auctions and zShops.

4. High standards are teachable and domain-specific

High standards are contagious. Bring a new person onto a high standards team, and they'll quickly adapt. The opposite is also true. If low standards prevail, those too will quickly spread.

Cultivating excellence. Amazon believes that high standards can be taught and learned, rather than being innate traits. This philosophy shapes their approach to hiring, training, and team building.

Domain-specific standards. High standards are not universal but vary across different areas of expertise. Amazon encourages employees to:

• Recognize what "good" looks like in their specific domain
• Understand the scope of effort required to achieve excellence
• Continuously improve and adapt standards as industries evolve

By fostering a culture of high standards, Amazon ensures consistent quality across its diverse range of products and services.

5. Make high-velocity, high-quality decisions

Most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you're probably being slow.

Two types of decisions. Amazon categorizes decisions into two types:

1. Type 1: Irreversible, high-stakes decisions requiring careful deliberation
2. Type 2: Reversible decisions that can be made quickly with limited information

Empowering quick action. By recognizing the difference between these decision types, Amazon enables teams to move quickly on most decisions while still exercising appropriate caution for critical choices.

Disagree and commit. This principle allows teams to move forward even when consensus isn't reached. It encourages healthy debate while preventing decision paralysis, enabling Amazon to maintain its agility despite its large size.

6. Hire and retain missionary talent, not mercenaries

You want missionaries, not mercenaries.

Passion-driven workforce. Amazon seeks employees who are deeply committed to the company's mission and values, rather than those primarily motivated by compensation or perks.

Long-term alignment. Missionaries are more likely to:

• Innovate and take calculated risks
• Persevere through challenges
• Contribute to a positive company culture

Retention strategies. To keep missionary talent, Amazon focuses on:

• Providing meaningful work and challenges
• Offering opportunities for growth and learning
• Maintaining a strong sense of purpose and mission

By prioritizing missionaries over mercenaries, Amazon builds a workforce that's intrinsically motivated to drive the company's long-term success.

7. Invent and simplify to solve customer problems

Invention is in our DNA and technology is the fundamental tool we wield to evolve and improve every aspect of the experience we provide our customers.

Culture of innovation. Amazon consistently encourages employees to think creatively and challenge conventional wisdom. This approach has led to groundbreaking products and services that have redefined entire industries.

Customer-centric invention. Key innovations include:

• 1-Click ordering: Simplifying the online shopping experience
• Amazon Prime: Redefining customer expectations for delivery speed
• AWS: Democratizing access to powerful computing resources

Continuous simplification. Along with inventing new solutions, Amazon focuses on simplifying existing processes and products to enhance customer experience and operational efficiency.

8. Be bold and think big to create lasting impact

We are internally driven to improve our services, adding benefits and features, before we have to. We lower prices and increase value for customers before we have to. We invent before we have to.

Ambitious vision. Amazon's approach to business is characterized by bold, long-term thinking that often challenges industry norms and pushes the boundaries of what's possible.

Transformative projects. Examples of Amazon's big thinking include:

• Blue Origin: Bezos's space exploration company aiming to make space travel accessible
• The Climate Pledge: Committing to meet the Paris Agreement goals 10 years early
• Amazon Go: Reinventing the retail shopping experience with cashier-less stores

By consistently thinking big and taking calculated risks, Amazon has repeatedly transformed industries and created new market categories.

9. Focus on controllable input metrics, not just financial outputs

We don't do PowerPoint (or any other slide-oriented) presentations at Amazon. Instead, we write narratively structured six-page memos.

Input-driven culture. Amazon emphasizes the importance of focusing on controllable input metrics rather than solely on financial outputs. This approach allows teams to concentrate on factors they can directly influence, which ultimately drive business results.

Key input metrics:

• Customer satisfaction scores
• Selection growth
• In-stock levels
• Delivery speed
• Cost structure improvements

Data-driven decision making. By focusing on these inputs and using detailed, narrative-driven memos for decision-making, Amazon ensures that teams have a deep understanding of the issues at hand and can make informed choices that drive long-term success.

10. Balance work and life through energy management, not time

I like the phrase "work-life harmony." I think work-life balance is a debilitating phrase because it implies there's a strict trade-off.

Energy-centric approach. Instead of focusing on a strict balance between work and personal time, Bezos advocates for managing energy and ensuring that both work and personal life are mutually reinforcing.

Key principles:

• Prioritize high-quality sleep and personal time
• Focus on high-impact, high-cognitive tasks during peak energy hours
• Create a positive feedback loop between work satisfaction and personal fulfillment

By reframing the work-life discussion around energy and fulfillment rather than time allocation, Amazon encourages a more holistic and sustainable approach to career and personal life.

Last updated: October 11, 2024