Jeff Bezos, boss of Amazon, is just a few billion dollars short of becoming the richest man in the world. And now he has been revealing the secrets of his success.Mr Bezos appeared as part of the Internet Association’s gala dinner in Washington DC, interviewed by the CEO of the Association, Michael Beckerman.
He had some words that all entrepreneurs, or budding entrepreneurs, may want to take to heart.
“If someone comes to you with a business plan and they say it is disruptive,” said Mr Bezos, “you should ask them to explain it in a more-simple way, and ask them why customers are going to adopt this?” He explained: “Invention is not disruption, only customer adoption is disruption. At Amazon, we invented a lot things that customers did not like at all, and they were not disruptive to anyone. It is only when customers like the new way, that something becomes disruptive.”
And that takes us to one of the three pillars upon which Amazon is based.
And that is customer obsession.
The second is being willing to invest and pioneer. “Customer obsession is not just listening to customers,” he said: “customers are always dissatisfied, even when they don’t know it, so customer obsession is inventing on their behalf. It is not their job to invent for themselves.”
Henry Ford followed a similar philosophy, supposedly saying “if you asked people what they want, they would say faster horses.” Steve Jobs applied that approach too, Apple’s research said customers did not want a touch screen phone, but they did, they just didn’t know it
The third pillar, is thinking long-term. “I ask everyone not to think in two to three-year time frames, but to think in five to seven-year time frames.” When someone congratulates him on a good quarter he thinks that “those results were baked several years earlier. I am working on a quarter that will happen in 2020, not the next quarter.”
But this is not natural, he suggests. It come hard for humans to think like that. Books about “get rich slowly schemes are not big sellers.”
He had some good words about experimenting and failure too.
“You cannot invent or pioneer if you cannot accept failure . . . To invent you need to experiment and if you know in advance that it is going to work, then it is not an experiment.
“Failure and invention are inseparable twins. If I said you had a 10 per cent chance of making ‘X return’, you should still make that decision, even though you will be wrong nine out of ten times.”
But maybe this is the metaphor that budding business leaders may like to learn
“Everyone knows that with baseball if you swing for the fences you will get more home runs, but you will strikeout more. But that analogy does not go far enough, because with baseball you can only get four runs, the success is capped at four runs. But in business, every once in a while you step up to the plate and you hit the ball so hard you get a thousand runs.”
And that is why he thinks that the right business decision is to experiment