The
Bezos Letters: 14 Principles to Grow Your Business Like Amazon, by Steve Anderson and
Karen Anderson, debuted on USA Today’s and The Wall Street Journal’s
bestsellers lists. The book, releasing
in September for Amazon’s 25th anniversary, reveals what makes Amazon
so successful – and how other businesses and start-ups can follow their formula
for profit.
According
to the Andersons, “Not only are we
thrilled that The Bezos Letters has debuted on two of the top-tier bestselling
lists in the USA but also the international attention being garnered currently within
the foreign markets has become an exciting journey!”
Jeff Bezos created Amazon, the fastest company to
reach $100 billion in sales ever, making him the richest man in the world.
Fortunately, Bezos has provided a hidden roadmap he used which was revealed in
his annual letters to shareholders. The Bezos Letters explains Bezos’ personal roadmap for success any
business owner can use to significantly grow their business. Within The Bezos
Letters, the
authors unlock the key lessons, mindset, principles, and steps Bezos has used
and continues to use, to make Amazon the massive success it is today.
“Up until now, no one had done
a deep analysis of the Bezos shareholder letters, and the principles
they contain, to help businesses grow as I reveal in this book,.” Says
Anderson. “My background as a technology and risk consultant allows me to
filter what Amazon has accomplished through the lens of risk and show how
strategic risk-taking is vital to the growth of any business.”
Steve (www.thebezosletters.com) has spent his 35+ year career helping the insurance
industry understand, integrate, and leverage current and emerging technologies.
From business management systems to social media, Steve analyzes what’s
happening now and explain its implications for the future. He is one of the
original 150 “thought leaders/influencers” on LinkedIn and has over 300,000
followers.
Business
owners are fascinated with Amazon’s success, but don’t realize that Bezos’
shareholder letters provide key insights any business executive can emulate.
Steve has taken these letters and broken them down into an easy-to-follow guide
on the key takeaways, such as key Amazon concepts and the 14 growth principles
that Amazon uses every day.
Here
is an interview with Steve Anderson, who is a client of the public relations
firm that I work for:
1.
How did you come
to determine that Amazon’s success revolves around the 14 principles identified
in your book, The Bezos Letters? I’ve been studying the relationship
between risk and growth for many years. In order for a business to grow, they
have to take risks, but what exactly does that mean? In my research, I came
upon the letters to Amazon shareholders written by Jeff Bezos. As I studied the
letters, I realized Bezos had “hidden in plain sight” how he had grown Amazon by
taking intentional and calculated risks. I discovered there were reoccurring
themes (principles) that any business could use to grow like Amazon.
2.
Why do you feel
other businesses in different industries can also apply them to be successful? Since every
business must take risks to grow (and by definition, have some failures), by
understanding how Bezos leveraged his “failures” with Amazon, companies can
learn from his mistakes without having to go down that (expensive) road
themselves. He has also cleared a path for other businesses to move forward
with his successes. Though there are many concepts universal in business (i.e.,
managing cash flow), Bezos has given it a unique spin. The ways he looks at
business, as he reveals in his letters to shareholders, allows others to see
the unique ways he evaluates and approaches risk and opportunity.
3.
You’ve assessed
the business side of risk for 35 years. How does your background uniquely
qualify you to dissect how Jeff Bezos built Amazon to be the fastest company in
history to reach $100 billion in sales? The insurance industry is all about risk
and risk management. Having looked at thousands of coverage providers and
businesses over the years, most businesses want to be protected from
risk. But I realized that Bezos was embracing risk intentionally and using it
to his advantage. Because of my experience, I can have a 30,000-foot view,
which gives me a perspective most don’t have.
4.
The 14 principles
come down to Test, Build, Accelerate, and Scale. Which of those four areas is
the most important? Why? I call each of these four areas Cycles because each
individual Cycle uses and creates other Cycles. It’s like asking which part of
a car is most important—tires, engine, body, or the brakes? They all work
together to allow the driver to get where they want to go quickly and easily.
The Growth Cycles work the same way. A new startup company might spend more
time in the Test and Build Cycles, but they also need to understand how to Accelerate
and Scale if they are going to be able to grow into a long-term viable and
profitable organization. Larger, more established companies always need to be
testing and building their next new product, platform, or service.
5.
You coined a term,
“Return on Risk.” What does that mean and how does that pertain to Bezos, whom
you labeled “the master of risk”? When a business makes a financial
investment in machinery, marketing, or expanding their sales team, they
evaluate their return on investment, or ROI. They want to know for the money
they put in, what will they get back? (Hopefully, more than they put in!) But
few businesses think of risk-taking as an investment, yet it should be treated
the same way as other investments. “If we take this risk, what will we get
back?” Bezos is a master of taking small risks (well, his definition of small)
and looking at the results in a way similar to ROI. He looks at what he learns
from taking risks and then uses that “investment” to create the next investment
and build upon it.
6.
In studying 21
letters to shareholders that Bezos has issued annually, what patterns emerge of
the wealthiest man in the world? Bezos is focused, determined, and smart.
He started Amazon like any start-up business, borrowing money from his parents
to get started. He has high standards, and he expects people who work for him to
have similarly high standards. In his first letter to shareholders he states, “It’s
not easy to work here (‘when I interview people I tell them, you can work long,
hard, or smart, but at Amazon.com you can’t choose two out of three’), but we
are working to build something important, something that matters to our
customers, something that we can tell our grandchildren about. Such things
aren’t meant to be easy.”
He also thinks long-term in a way that is unique in the business world (like generations out, not just the next 3–5 years). His focus is extreme and often counter-intuitive. He makes fast decisions, doesn’t sweat the small stuff, and focuses on experimentation and innovation. And he tests and measures everything (while still trusting his “gut”).
He also thinks long-term in a way that is unique in the business world (like generations out, not just the next 3–5 years). His focus is extreme and often counter-intuitive. He makes fast decisions, doesn’t sweat the small stuff, and focuses on experimentation and innovation. And he tests and measures everything (while still trusting his “gut”).
7.
If leadership is
at the center of business growth and deeply ingrained in the core of Amazon,
what will the company be like once Bezos no longer runs it? Bezos continues to
be the driving force for the vision and long-term view of Amazon. He also knows
that at some point in the future Amazon will become obsolete. He hopes it
happens after he’s gone. That’s also why one of the Anderson Growth Principles
is “Maintain Your Culture.” While I think it will be hard for the company when
Bezos is no longer leading it, he has built a culture that might be able to
sustain his vision long after he’s gone.
8.
Bezos obsesses
over the customer. How is what he does different from what other companies do? There are lots of
words used to describe how a company thinks about and treats its customers.
Customer service, customer experience, the customer journey, the customer is
always right, and many more. “Obsess Over Customers” brings it to a
different level. Dave Johnson, an Amazon executive, described the difference
when he said that, before coming to Amazon, he had worked at two big-name
companies that were “customer-focused,” and they were really good. “But,” he
said, “at Amazon… We are customer obsessed.” It’s not just about
focusing on what the customer wants but, like other successful companies, it’s giving
the customer what they want before they even know they want it. Amazon
knows that if they’re not obsessed with their customers, they’ll go somewhere else—to
the point, they’ll even encourage the customer to go somewhere else (for a tiny
bit of the action). That’s what Amazon Marketplace is all about with their
third-party sellers.
9.
Amazon encourages
successful failure. What does that mean? Most organizations punish failure.
Companies know they need to be innovative but struggle with the failures that
are necessary when experimenting with new ideas and processes. Successful
failure recognizes that while something might not work the way you think
(experiments by their very nature are prone to fail), the key is learning what
didn’t work and why so you can make adjustments for the next experiment (and
possible failure). Creating a “safe to fail” culture encourages employees to
try out a crazy idea that might work. The Fire Phone was a massive failure at
Amazon but also led to the Echo and Alexa.
10.
What are the three
pillars of customer experience for Amazon, and how can others employ them? The three customer
pillars at Amazon are wide selection, low prices, and fast delivery. These pillars
will not apply to every business. For example, your business may be a premium
brand with high prices. The question is: Are you clear about what your customer
pillars are for your own business and how do you fulfill that promise?
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Brian Feinblum’s insightful views, provocative opinions, and
interesting ideas expressed in this terrific blog are his alone and not that of
his employer or anyone else. You can – and should -- follow him on Twitter
@theprexpert and email him at brianfeinblum@gmail.com. He feels much more
important when discussed in the third-person. This is copyrighted by
BookMarketingBuzzBlog ©2019. Born and raised in Brooklyn, he now resides in
Westchester. His writings are often featured in The Writer and IBPA’s Independent.
This was named one of the best book marketing blogs by Book Baby
http://blog.bookbaby.com/2013/09/the-best-book-marketing-blogs and recognized
by Feedspot in 2018 as one of the top book marketing blogs. Also named by
WinningWriters.com as a "best resource.” He recently hosted a panel on
book publicity for Book Expo America.
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