Tips from Jeff Bezos

Roy Latke

2021-12-01

4 min read

A document released by Jeff Bezos to Amazon shareholders in 2016 has become one of the most quoted and recognized in the business world and it presents a rather interesting principle that he claims is behind Amazon’s tremendous success. 

Bezos divides the world’s companies into two types: Day 1 companies and Day 2 companies. Companies of the former kind act as if every day is their first day: they need to embrace change, make decisions quickly, lead and not be led. Companies of the latter kind are struggling to respond to changes and therefore slowly wither into irrelevancy (e.g. Nokia, Blackberry, Blockbuster).

In order for your company to be a “Day 1 Company”, you need, according to Bezos, to adhere to the following 4 rules: 

(1) Be careful not to make your processes your aim – when companies grow they tend to focus on their processes rather than their results. Define clear results and act to accomplish them. Processes are a means to an end, and they should be constantly improved upon in order to reach the optimal outcome – they are not, in and of themselves, the goal. 

(2) Create an agile decision-making mechanism – if you made the right decision too late then it has no importance, and neither does the process you went through to get to it. 

(3) It’s not the technology, nor the product, it’s the customer – many companies put the product, technology or raising capital at the center of their operations. You should only have one focus, and it’s getting satisfied customers. 

(4) If you ignore trends they will destroy you – it has never been easier to follow trends than it is today. Locate them and respond to them or others will do so in your place (see: Steve Ballmer, the former Microsoft CEO, who dismissed that one Apple product called ‘iPhone’ by saying “who would want to buy a phone without a physical keyboard?”)

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