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5 Intriguing Business Lessons from Amazon’s Jeff Bezos
If you haven’t had the chance to read Brad Stone’s THE EVERYTHING STORE: JEFF BEZOS AND THE AGE OF AMAZON, reach out for your Kindle and download it right now. It’s an exciting account of the creation and development of Amazon into one of the most unique companies in history and the life of his peculiar founder Jeff Bezos.
Amazon.com started as an online book retailer and grew to become a company where you can purchase virtually anything, from apparel, to art to web services. It originated the concept of cloud computing service and was the first company, through the Kindle, to turn online reading into a reality for thousand of hundreds of people on the planet. In addition, it claims it will be launching rockets into outer space soon.
If Amazon puts the client first – and, as customers, you and I can certainly attest to that – working for Bezos looks like it’s not a lot of fun. Amazon is supposed to have all the depressing and Orwellian political atmosphere and red tape of huge corporations combined with the lack of resources of a startup. Many of his ex-employees are said to suffer from post-traumatic stress disorder, and the ones who remain there live under constant pressure and fear of getting fired before the end of the day. Bezo’s explosive personality is not very different from that of another difficult boss – Steve Jobs. It is kind of sad to think Nature tends to offset their kind of genius and creativity with a terrifying temperament and underdeveloped interpersonal skills.
Despite these drawbacks, you may find below a number of interesting lessons and facts about Jeff Bezos and his company. They are all based on info I got from the book. You may either try to apply them in your own business or, at least, enjoy these points as mere trivia:
1. Monitor your clients more than your competition. Of course Amazon has always kept a close eye on Walmart, Apple, Barnes and Noble, and Google – their main competitors. But he has always been much more likely to create or optimize processes that, rather than simply emulate these companies breakthroughs in terms of profitability, would actually benefit the client. For him, the client experience has always come first. Short term profit has always been an afterthought.
2. Frugality. Bezos is obsessed with simplicity and adept of an ascetic life style (in this he was not very different from Jobs either, by the way). He has always kept his staff on a very tight budget, cutting all kinds of extra costs with the aim of investing in the clients’ experience. His mantra was low prices everyday (just like Walmart’s), and he would go out of his way to make this happen, keeping his margins to a minimum or even giving them up altogether, such was his confidence in a business model that, if trusted by the client, would payoff in the future. Bezos would carefully consider the need of every extra expense or cost and try to connect it directly to a benefit to the client. Lack of resources, according to him, would spur creativity and imagination from his staff.
3. You may learn more from fiction than non-fictional books. His favorite novel is Kazuo Ishiguro’s The Remains of the Day. I was very happy to hear about this, as I love reading novels and this is certainly one of my all-time favorites. However, I don’t really think you can learn the hard facts about being an entrepreneur from the likes of Philip Roth or Machado de Assis. Fiction in my opinion will help you deal with the human side of business, and will probably keep you from having to resort to antidepressants when you struggle to work under bosses like Bezos, get sabotaged by coworkers or even fired. But, in my humble opinion, only the actual experience and the study of technical reading material will help you grow in your career. The most interesting thing about this aspect of Bezos’s personality is that his love for books boosted the launch of the Kindle, whereas Steve Job’s passion for music – especially Bob Dylan’s and the Beatles’s – was a strong inspiration in his creation of iTunes. Do what you love and you are more likely to succeed.
4. Think very long term. Entrepreneurs need to persist in seeding. The payoff never comes immediately. Especially now, in this fast-paced, ever-changing technological landscape. Appreciate the little victories you achieve every day and fight on. Celebrate every little step towards a moving target you don’t even know if you will ever reach.
5. Be ruthless in the negotiation with your competition. For Jeff Bezos “win-win” was an unamazon way of thinking. You need to score an advantage over your opponents. Think football during these times of World Cup. A draw is not acceptable. Do not even be afraid of disrupting your own business model in your pursuit to win. Do everything to destroy it and create something new instead. If you don’t do it, others will. Cannibalization is OK.
You may not agree with every tip Bezos has to offer, but remember where he got to by using them. Of course, you should always take successful entrepreneurs’s and gurus’ advice with a grain of salt, for, as Malcolm Gladwell explains in his brilliant book OUTLIERS, there is always a lot more to success than meets the eye. A set of special conditions not available to all is always present in the these Cinderella’s stories of ash to riches, so look out for them.
What is your formula for success? Please share it with us (if we are not competing with you).
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