I started my daily posts on 1st Jan this year with Jeff Bezos letter to shareholders written i. n 2018. Yesterday he wrote his annual letter for 2019, and he attributed Amazon’s success to the above traits (Intuition, curiosity, and the power of wandering) which he says is in the DNA of the company. As usual there are ideas and lessons. Some points may be to counter anti trust moves in the horizon, some to fight popular perceptions of bad pay and work environments. Here are the key takeaways :
- Third party sellers are thriving ( their share of gross merchandise have gone from 3% in 1999 to 58% in 2018 an annual compounded growth rate of 52% as against eBay’s 20%). And Bezos attributes this to Amazon’s focus on building tools that help 3rd party sellers beat Amazon’s own offerings. Specially vehicles like Fulfilled by Amazon and the Prime Membership program.
- Bezos talks about massive failures like Fire. But also cite’s the success of AWS and Echo to point out that no one asked for them and now they are big engines of success for Amazon. He talks about more ‘Multi Billion Dollar’ failures that could possibly come, but defends them saying only massive bets by a company of Amazon’s size can move the needle for betterment and change.
- What customers want and listening to them helped create the Amazon Go stores. Jeff writes about a host of difficult technology problems that needed solving. But the result, he quotes customers as saying, is ‘Magical’.
- Minimum wages – he challenges his competition without naming them to match or better the recent hourly rate offered by Amazon – $15, and the response from Target was to raise their hourly rate to $13. Not much of a challenge there.
In the meanwhile the working condition issues remain where they are. In the warehouses.
As always it is a great read. Also makes you wonder why the vast majority of companies offer nothing of significance to their customers. Or themselves.
Link to the letter and an interesting take by Bill Murphy in Inc below.
Link to the Amazon Shareholders letter filed with SEC https://bit.ly/2P2Tyr1
Behold the 49 Most Important Words in Jeff Bezos’s Just Released Amazon Shareholder Letter https://bit.ly/2Kze3gv