Before Jeff Bezos left his role as CEO of Amazon, he had taken the company he founded from zero to nearly $1.7 trillion in market value. His approach was relentless in building the most dominant, customer-focused company in modern history. But relentless doesn\u2019t mean inevitable. Bezos was also guided by 11 principles we can all learn from.<\/p>\n
Employ a \u201cregret minimization framework.\u201d<\/em> When Bezos was contemplating starting Amazon, he used a mental exercise he calls a \u201cregret minimization framework.\u201d He thought that when he turned 80 and looked back on his life, he wanted to minimize the number of regrets he had. \u201cI knew that when I was 80, I was not going to regret having tried\u2026to participate in this thing called the internet that I thought was going to be a really big deal.\u201d<\/p>\n Identify the right opportunity.<\/em> Books were Amazon\u2019s first products, but his goal wasn\u2019t to build a book<\/em> business. It was to build an internet<\/em> business, because he saw that the internet was growing at an amazing rate. It made sense to start with books because there were more than three million available titles and shipping them was relatively easy and cheap.<\/p>\n Make your value greater than the cost.<\/em> In 1994, to get people to go on a computer, dial up an internet connection, and buy, you\u2019d better have something they can\u2019t get anywhere else. Bezos offered low prices, limitless selection, and flawless fulfillment. He concluded that if Amazon could make customers\u2019 lives easier and better in a tangible way, they\u2019ll probably buy just about anything from the site.<\/p>\n Get customer-obsessed.<\/em> Bezos says, \u201cthe number one thing that has made us successful, by far, is obsessive, compulsive focus on the customer.\u201d That means \u201coffering our customers compelling value\u201d\u2014creating a company people couldn\u2019t live without. He made every new product team write a press release at the start, so they could think about what they were doing from the perspective of a customer\u2019s first encounter with the product.<\/p>\n Worry about customers, not competitors.<\/em> Bezos told his team not to fear competitors, because they\u2019re never going to send us money. He said to only worry about what really matters. \u201cBe afraid of your customers, because those are the folks who have the money.\u201d<\/p>\n Keep the focus long-term.<\/em> Amazon didn\u2019t turn a profit for quite some time. Bezos told Wall Street, \u201ca fundamental measure of our success will be the shareholder value we create over the long term.\u201d Prime free shipping for $79 lost money in the short term on all the customers who purchased a lot. But it boosted sales tremendously, which fed the bigger, long-term plan.<\/p>\n Make the flywheel spin faster.<\/em> To bring in more customers, Bezos aimed for a large selection of products, at low prices, with terrific customer service. That larger number of customers would then attract third-party sellers, increasing the selection of products and attracting even more customers. Bigger sales volume would get better prices from suppliers, and those lower costs would fund growth, making the flywheel spin even faster.<\/p>\n Understand the kind of decision you\u2019re making.<\/em> Bezos notes most decisions are less consequential Type 1 \u201ctwo-way doors,\u201d where if you make the wrong choice, you can go back. Then, he says, \u201cthere are decisions that are irreversible and highly consequential; we call them one-way doors, or Type 2 decisions.\u201d The key is to know which type of decision you\u2019re making. Don\u2019t take too long to make Type I decisions. But be sure to take enough time to make Type 2 decisions when there\u2019s no going back.<\/p>\n Give people a mission.<\/em> Bezos asks, \u201cHow do you hire great people and keep them from leaving?\u201d He says you give them \u201cfirst of all, a great mission\u2014something that has real purpose, that has meaning.\u201d That\u2019s how you wind up with intense missionaries instead of pragmatic mercenaries.<\/p>\n Nurture your culture.<\/em> According to Bezos, Amazon\u2019s intense culture was \u201ccreated slowly over time\u2026by the stories of past success and failure that become a deep part of the company lore.\u201d By recognizing that history, and guarding it carefully, Bezos says, \u201cwe\u2019ve collected a large group of like-minded people.\u201d<\/p>\n Listen to critics, but not all the time.<\/em> Bezos says that when criticized, \u201cFirst, look in a mirror and decide if you\u2019re critics are right. If they\u2019re right, change.\u201d But he notes that when you\u2019re on a mission, you should expect criticism. He advises that \u201cIf you can\u2019t afford to be misunderstood, don\u2019t do anything new or innovative.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" Before Jeff Bezos left his role as CEO of Amazon, he had taken the company he founded from zero to nearly $1.7 trillion in market value. His approach was relentless in building the most dominant, customer-focused company in modern history. But relentless doesn\u2019t mean inevitable. Bezos was also guided by 11 principles we can all…<\/p>\n","protected":false},"author":5,"featured_media":681,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-680","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-leadership"],"aioseo_notices":[],"featured_image_src":"https:\/\/advicoach.com\/va\/wp-content\/uploads\/sites\/7\/2024\/02\/advicoach-slider-1.jpg","featured_image_src_square":"https:\/\/advicoach.com\/va\/wp-content\/uploads\/sites\/7\/2024\/02\/advicoach-slider-1.jpg","author_info":{"display_name":"","author_link":"https:\/\/advicoach.com\/va\/author\/"},"_links":{"self":[{"href":"https:\/\/advicoach.com\/va\/wp-json\/wp\/v2\/posts\/680","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/advicoach.com\/va\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/advicoach.com\/va\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/advicoach.com\/va\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/advicoach.com\/va\/wp-json\/wp\/v2\/comments?post=680"}],"version-history":[{"count":0,"href":"https:\/\/advicoach.com\/va\/wp-json\/wp\/v2\/posts\/680\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/advicoach.com\/va\/wp-json\/wp\/v2\/media\/681"}],"wp:attachment":[{"href":"https:\/\/advicoach.com\/va\/wp-json\/wp\/v2\/media?parent=680"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/advicoach.com\/va\/wp-json\/wp\/v2\/categories?post=680"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/advicoach.com\/va\/wp-json\/wp\/v2\/tags?post=680"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Operating Lessons<\/h4>\n
Brand Lessons<\/h4>\n