“In some large companies, it might be difficult to grow new businesses from tiny seeds because of the patience and nurturing required. In my view, Amazon’s culture is unusually supportive of small businesses with big potential, and I believe that’s a source of competitive advantage.”
Takeaway
New business lines start out as seedlings. Often, they won’t meaningfully contribute to revenue for many years. But if you have the patience to nurture those seedlings, you can end up with powerful new revenue lines.
Challenge
Making long-term investments in small internal businesses can be difficult in a fast-paced corporate environment.
Large corporations are good at executing on predetermined strategies, but they struggle to slow down and give new business lines time to develop.
Public markets judge performance on a quarterly basis, and salaries, promotions, and layoffs also based on these figures. It is difficult to go against the grain and accept projects that might not see returns for some time (or at all).
Solution
While you need concrete insights and metrics to bet on a new idea, you also need patience and nurturing to make it thrive.
At Amazon, Bezos emphasizes that even if a new business enjoys runaway success, it will only begin to contribute meaningfully to company economics in three to seven years. Accepting that kind of time-frame as normal is the first step to building new innovative businesses inside your company.
Fulfillment by Amazon AWS and Amazon Advertising services , for example — now major winners for Amazon — began as seed investments.
Jeff Bezos letter to shareholders
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.
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
Jeff Bezos Letter to Shareholders 2018
Data Pulses storytelling 