7 Business Lessons You Can Learn from Amazon Founder Jeff Bezos
By: Erik Hamre
Tags: Amazon, Business, Entrepreneurship, Life Lessons, Inspiration

7 Business Lessons You Can Learn from Amazon Founder Jeff Bezos

Skill Development Expert Profile — Jeff Bezos

Los Angeles Air Force Base Space and Missile System Center, Public domain, via Wikimedia Commons

Jeff Bezos, the founder of Amazon, is now the world’s richest person. According to the Forbes real-time billionaires list, he is worth 185.2$ billion dollars at the time of writing, up 1.4$ billion from yesterday. Whether or not you think that’s a worthwhile goal is a separate issue. One thing is clear, though. We can all learn a lot about business from someone who has achieved something that impressive.

Jeff Bezos has developed a unique ability to see the world clearly, and by navigating that world successfully, he has achieved things most people didn’t think possible. At any moment, Amazon has more than 600 million items for sale and more than three million vendors selling them. They control almost 40 per cent of all e-commerce in the United States, half of the cloud-computing industry, a third of the video-streaming market, and sell 42 per cent of all paper books. This piece will explore Bezos’ road to success through some of his most famous quotes and experiences.

1. Every business starts small

‘Big things start small.’

Bezos started Amazon by selling used books out of his garage. After receiving an order, Jeff would buy it in a thrift store and ship it to the customer. It was a cheap, low-risk model to find out if customers wanted their service.

At this point, Bezos was obsessed with the growth of the internet. He studied the 20 largest mail-order companies and predicted that there would be a tsunami of change in how people would buy things.

Jeff started with books, but his big goal was to become a store that would sell everything. Books were just a convenient product to test the model on. By combining the ideas of the internet and making the physical store digital, Amazon revolutionised how people bought goods and services. We no longer had to walk out our front door.

2. Always aim for excellence

‘Ideas are the easy part; execution is everything.’

One of Amazon’s secrets to success was their research on how people behave. They tracked every action. By understanding what people looked at, for how long and what we put in the basket but didn’t buy, they soon became experts at predicting what we hadn’t yet looked at but were most likely to buy.

They were equally obsessed with every detail. Bezos wanted everything to go a little bit faster and to be done a little bit better. Any sort of sloppiness was unacceptable. By raising the standards to the almost unachievable, Jeff pushed Amazon to improve every thinkable detail, which allowed them to offer the lowest prices and fastest delivery on their products.

3. The customer comes first

‘Think about the customer, and then work from there.’

Bezos main aim was never to become a billionaire, but to produce a service that made life easier for others. Whenever Amazon received a customer complaint, they would do anything possible to improve the experience. This obsession about what the customer wanted was crucial to why people liked them and became loyal.

Amazon created long-term loyalty by giving up short-term profitability. As an example, they started to give warnings when people put something in the shopping cart, that they had already purchased. People may have put it in by mistake, and Amazon allowed the customer to correct it. This option decreased the short-term sales, but increased customer satisfaction and the likelihood that someone would return and buy something in the future.

4. Focus on the things you can control

‘It’s impossible to imagine a future ten years from now where a customer comes up and says, ‘Jeff I love Amazon, I just wish the prices were a little higher; or I love Amazon, I just wish you’d deliver a little more slowly.’’

Some businesses try to predict the future and guess what the market wants five or ten years from now. This is risky, as the future can be very unpredictable.

Instead, Bezos tries to focus on the things that will not change. He knows that ten years from now, customers still want low prices, fast delivery and a vast selection. Putting in the effort to optimise these things will always be time well spent.

5. Think long-term

‘When we win a Golden Globe, it helps us sell more shoes.’

When making decisions, Bezos values long-term benefits over short-term costs. Amazon has several times launched efforts that have resulted in a short-term loss. They have, for example, guaranteed next-day delivery for any item over 25$ and launched the Prime service which guaranteed two-day delivery for any item. These sort of services were expensive to provide, but Amazon bet that it would lead to more content customers who would spend more in the long-run. Even though one service lost money, they earned it back somewhere else. By thinking long-term, they accomplished things that otherwise wouldn’t be possible.

Amazon only showed a profit nine years after it was established. Bezos still managed to convince share-holders of his long-term plan of taking market share. Their strategy was to lose money, to put other companies out of business who couldn’t afford to lose money. Their strategy was to dominate the market down the road.

6. Prioritise what’s important

‘I always make sure to get eight hours of sleep every night. I don’t want to risk making poor executive decisions because I am ‘tired or grouchy.’’

The world’s richest man sleeps eight hours a night, and only sets his first meeting at 10 am. This may sound lazy, but his priority is to eat breakfast with his kids and family and to be alert. In the early hours of the day, he likes to putter around the house, while drinking his coffee, staying in a relaxed mindset. This type of short-term relaxation can actually be long-term productive. By taking some time in the morning to thrive, you will be more ready to perform when it matters.

At 10 am it’s all business, however. Bezos likes to make all the most important decisions before lunch, as the first half of the day is when we have the greatest capacity to make good decisions. By having a clear mind when the most critical decisions are made, you maximise your chances of daily success.

7. Have big goals

‘In space, there is enough room for a trillion humans. That could give us a thousand Mozart’s and a thousand Einstein’s.’

The next big goal for Bezos is to bring humans into space. He fears we will outgrow our planet and its limited resources, and that this will lead to rationing and starvation. Not a very encouraging future. Thus, he started the Blue Origin program to bring us into space. It may seem far-fetched, but until recently, our only method of buying a book was to walk into a store.

Having a big dream is the big motivator to keep improving Amazon. Bezos is way past the point where earning more money matters to his life-quality. By having success in one area, he can fulfil his life-long dream. If you ever get the feeling that you’re only working for the money, it can be worthwhile to think of your purpose in life. If the money you earn in your job can help you fund projects that secure clean water or bring better education to more people, you may find a newfound drive to keep going.

Take home message

Bezos started Amazon from his garage and grew it to become the wealthiest person in the world.

He was obsessed with detail and tried to measure and improve every possible component.

The focus was on the customer experience, and he would go to great lengths to satisfy every customer.

Instead of predicting the future, Bezos focused on improving the things that he knew people would want 5–10 years from now.

Valuing long-term results over short-term profits is more likely to lead to success.

By prioritising what’s important, you maximise your chances of making good decisions where they matter most.

Finding your purpose is much more motivating than just having a goal to earn money.

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