Work backwards from customer needs
to know what to build next
Jeff Bezos letter to shareholders 2008
Key message 11/22
Jeff Bezos has been writing a letter to shareholders since 1997 and looking at all if them gives an insight to the organisation and a masterclass in leadership. This is a series of short blogs that gives you a snap shot / key takes outs of each letter, along with links to them all.
“’Working backwards’ from customer needs can be contrasted with a ‘skills-forward’ approach where existing skills and competencies are used to drive business opportunities. The skills-forward approach says, ‘We are really good at X. What else can we do with X?’ That’s a useful and rewarding business approach. However, if used exclusively, the company employing it will never be driven to develop fresh skills.”
Some companies figure out what to build next by thinking about what they’re already good at doing today — a good approach in some cases, Bezos says, but not always.
If you want to delight and amaze your customers and develop fresh lines of business, you need to think backwards from what your customers need.
As a company, it’s more straightforward to rely on a skills-forward approach. Over time, you develop expertise in certain fields. Deciding what to do next based on the expertise you’ve already developed is often a good way to leverage your competence in one area into new successes.
The problem is that this method will never bring you new skills or capabilities. You’ll never learn how to do new things, and that will ultimately hurt your ability to innovate.
To take your business to the next level, start by thinking about what your customers want or need, and work backwards to figure out what you can build.
When the Kindle project started, the vision was simple — the capability for any book ever printed to be accessed in less than 60 seconds. That was it: the product was no more determined than that.
Although Amazon had never built a hardware device before, the team focused on fulfilling that vision. They hired people with the right skills to engineer that vision, rather than trying to create a product better suited to Amazon’s existing skills.
The Kindle software and hardware emerged organically out of the Amazon team’s attempt to answer that product vision, and the result became another powerful arm of Amazon’s business.
Thinking backwards from customer needs rather than seeking the path of least resistance at each juncture allows Amazon to be both successful and creative. That’s what has allowed them to reinvent the company time and time again.
link to all letters to shareholders
- 1997: Bring on shareholders who align with your values
Jeff Bezos Letter to Shareholders 1997
- 1998: Stay terrified of your customers
Jeff Bezos Letter to Shareholders 1998
- 1999: Build on top of infrastructure that’s improving on its own
Jeff Bezos Letter to Shareholders 1999
- 2000: In lean times, build a cash moat
Jeff Bezos Letter to Shareholders 2000
- 2001: Measure your company by your free cash flow
Jeff Bezos Letter to Shareholders 2001
- 2002: Build your business on your fixed costs
Jeff Bezos Letter to Shareholders 2002
- 2003: Long-term thinking is rooted in ownership
Jeff Bezos Letter to Shareholders 2003
- 2004: Free cash flow enables more innovation
Jeff Bezos Letter to Shareholders 2004
- 2005: Don’t get fixated on short-term numbers
Jeff Bezos Letter to Shareholders 2005
- 2006: Nurture your seedlings to build big lines of business
Jeff Bezos Letter to Shareholders 2006
- 2007: Missionaries build better products
Jeff Bezos Letter to Shareholders 2007
- 2008: Work backwards from customer needs to know what to build next
Jeff Bezos Letter to Shareholders 2008
- 2009: Focus on inputs — the outputs will take care of themselves
Jeff Bezos Letter to Shareholders 2009
- 2010: R&D should pervade every department
Jeff Bezos Letter to Shareholders 2010
- 2011: Self-service platforms unlock innovation
Jeff Bezos Letter to Shareholders 2011
- 2012: Surprise and delight your customers to build long-term trust
Jeff Bezos Letter to Shareholders 2012
- 2013: Decentralize decision-making to generate innovation
Jeff Bezos Letter to Shareholders 2013
- 2014: Bet on ideas that have unlimited upside
Jeff Bezos Letter to Shareholders 2014
- 2015: Don’t deliberate over easily reversible decisions
Jeff Bezos Letter to Shareholders 2015
- 2016: Move fast and focus on outcomes
Jeff Bezos Letter to Shareholders 2016
- 2017: Build high standards into company culture
Jeff Bezos Letter to Shareholders 2017
- 2018: Wandering is an essential counterbalance to efficiency