“The current online shopping experience is the worst it will ever be. It’s good enough today to attract 17 million customers, but it will get so much better. Increased bandwidth will result in faster page views and richer content. Further improvements will lead to ‘always-on access’ (which I expect will be a strong boost to online shopping at home, as opposed to the office) and we’ll see significant growth in non-PC devices and wireless access. Moreover, it’s great to be participating in what is a multi-trillion dollar global market, in which we are so very, very tiny. We are doubly-blessed. We have a market-size unconstrained opportunity in an area where the underlying foundational technology we employ improves every day. That is not normal.”
Jeff Bezos Letter to shareholders 1999 3/22
- The biggest opportunities in tech are platform-driven.
- When you build on an infrastructure that’s beginning to quickly develop and modernize, you reap the benefits of not just your own growth but also the growth of the infrastructure you’re building on.
- Building on established platforms is the easiest and most expedient route, but one with the least upside.
- Established platforms offer the most integration, often have low barriers to entry, and have plenty of accumulated wisdom around them.
- At the same time, their growth potential is often limited due to the high pace of technological innovation across industries.
- With the rise of internet connectivity in the late 1990s, an increasing divide began to appear between industries. E-commerce, gaming, online financial services were industries where a strong footing established early could set the stage for huge growth.
- While Bezos was helped by growth in the e-commerce field specifically, and in access to high-bandwidth connections more generally, he didn’t find himself there unexpectedly. Before Amazon, Bezos was vice president at the hedge fund D. E. Shaw & Co, where he saw the rise of the internet firsthand.
- Bezos knew he wanted to build a technology company, and he consciously looked to hire the most talented infrastructure engineers he could find to build new solutions where none existed.
- Building on a high-growth platform like Amazon did require a much higher degree of upfront investment in engineering and research, but on the long timeframe of technological improvement, it gives you a much higher chance of building a huge, long-term business.
Bezos masterclass in management through shareholder letters 1999 #3/22
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