from the nicely-done dept
Geekwire notes that at the latest Amazon shareholder meeting, Bezos got almost the exact opposite question from those he used to get concerning these sorts of things, from Evan Jacobs, questioning if Amazon wasn't taking enough risks. Bezos' answer is fantastic for anyone who thinks about innovation these days, and wants to make big bets, rather than go for the quick flip:
In a way, that is like the nicest compliment Iíve ever gotten. First of all, I think we have gotten pretty lucky recently. You should anticipate a certain amount of failure. Our two big initiatives, AWS and Kindle ó two big, clean-sheet initiatives ó have worked out very well. Ninety-plus percent of the innovation at Amazon is incremental and critical and much less risky. We know how to open new product categories. We know how to open new geographies. That doesnít mean that these things are guaranteed to work, but we have a lot of expertise and a lot of knowledge. We know how to open new fulfillment centers, whether to open one, where to locate it, how big to make it. All of these things based on our operating history are things that we can analyze quantitatively rather than to have to make intuitive judgments.That idea of willing to be misunderstood for a long time really has been the key to Amazon's success, and Bezos' ability to stand up to investors who regularly called for changes in strategy and to focus on the long-term has really paid off. In this age when "pivot" has become a buzzword in the startup community (there's even a whole conference on the subject), where companies completely shift strategies on whims, perhaps there's something to be said for seeing the long term game plan better than others, and sticking to it. Obviously, this doesn't mean being totally pigheaded if an idea isn't working, but Bezos' point is to be flexible on the details, but stay true to the ultimate vision you believe in. That's really, really tough for a lot of entrepreneurs to do, but it's a really important lesson to learn.
When you look at something like, go back in time when we started working on Kindle almost seven years agoÖ. There you just have to place a bet. If you place enough of those bets, and if you place them early enough, none of them are ever betting the company. By the time you are betting the company, it means you havenít invented for too long.
If you invent frequently and are willing to fail, then you never get to that point where you really need to bet the whole company. AWS also started about six or seven years ago. We are planting more seeds right now, and it is too early to talk about them, but we are going to continue to plant seeds. And I can guarantee you that everything we do will not work. And, I am never concerned about thatÖ. We are stubborn on vision. We are flexible on detailsÖ. We donít give up on things easily. Our third-party seller business is an example of that. It took us three tries to get the third-party seller business to work. We didnít give up.
But. if you get to a point where you look at it and you say look, we are continuing invest a lot of money in this, and itís not working and we have a bunch of other good businesses, and this is a hypothetical scenario, and we are going to give up on this. On the day you decide to give up on it, what happens? Your operating margins go up because you stopped investing in something that wasnít working. Is that really such a bad day?
So, my mind never lets me get in a place where I think we canít afford to take these bets, because the bad case never seems that bad to me. And, I think to have that point of view, requires a corporate culture that does a few things. I donít think every company can do that, can take that point of view. A big piece of the story we tell ourselves about who we are, is that we are willing to invent. We are willing to think long-term. We start with the customer and work backwards. And, very importantly, we are willing to be misunderstood for long periods of time.
I believe if you donít have that set of things in your corporate culture, then you canít do large-scale invention. You can do incremental invention, which is critically important for any company. But it is very difficult ó if you are not willing to be misunderstood. People will misunderstand you.
Any time you do something big, thatís disruptive ó Kindle, AWS ó there will be critics. And there will be at least two kinds of critics. There will be well-meaning critics who genuinely misunderstand what you are doing or genuinely have a different opinion. And there will be the self-interested critics that have a vested interest in not liking what you are doing and they will have reason to misunderstand. And you have to be willing to ignore both types of critics. You listen to them, because you want to see, always testing, is it possible they are right?
But if you hold back and you say, ĎNo, we believe in this vision,í then you just stay heads down, stay focused and you build out your vision.