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Amazon Shareholder Letter, 2016

21 ideas

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  1. Customer focus best protects Day 1

    “You can be competitor focused, you can be product focused, you can be technology focused, you can be business model focused, and there are more. But in my view, obsessive customer focus is by far the most protective of Day 1 vitality.”

  2. Customers are beautifully, wonderfully dissatisfied

    “There are many advantages to a customer-centric approach, but here’s the big one: customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great.”

  3. Delighting customers drives invention

    “Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf.”

  4. Customer obsession makes room for experiments

    “Staying in Day 1 requires you to experiment patiently, accept failures, plant seeds, protect saplings, and double down when you see customer delight. A customer-obsessed culture best creates the conditions where all of that can happen.”

  5. Managing to proxies is very Day 2

    “As companies get larger and more complex, there’s a tendency to manage to proxies. This comes in many shapes and sizes, and it’s dangerous, subtle, and very Day 2.”

  6. Process can stand in for results

    “The process becomes the proxy for the result you want. You stop looking at outcomes and just make sure you’re doing the process right.”

  7. Owning the process, or owned by it

    “The process is not the thing. It’s always worth asking, do we own the process or does the process own us?”

  8. Good inventors study anecdotes, not averages

    “Good inventors and designers deeply understand their customer. They spend tremendous energy developing that intuition. They study and understand many anecdotes rather than only the averages you’ll find on surveys.”

  9. Research finds blind spots in a vision

    “I’m not against beta testing or surveys. But you, the product or service owner, must understand the customer, have a vision, and love the offering. Then, beta testing and research can help you find your blind spots.”

  10. Great experiences start with heart, not surveys

    “A remarkable customer experience starts with heart, intuition, curiosity, play, guts, taste. You won’t find any of it in a survey.”

  11. Fighting big trends means fighting the future

    “The outside world can push you into Day 2 if you won’t or can’t embrace powerful trends quickly. If you fight them, you’re probably fighting the future. Embrace them and you have a tailwind.”

  12. Obvious trends are hard for big organizations

    “[Powerful trends] are not that hard to spot (they get talked and written about a lot), but they can be strangely hard for large organizations to embrace.”

  13. Machine learning automates tasks without clear rules

    “Over the past decades computers have broadly automated tasks that programmers could describe with clear rules and algorithms. Modern machine learning techniques now allow us to do the same for tasks where describing the precise rules is much harder.”

  14. Day 1 means fast, high-quality decisions

    “To keep the energy and dynamism of Day 1, you have to somehow make high-quality, high-velocity decisions. Easy for start-ups and very challenging for large organizations.”

  15. Reversible decisions deserve a light process

    “Many decisions are reversible, two-way doors. Those decisions can use a light-weight process.”

  16. Seventy percent of the information is usually enough

    “Second, most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you’re probably being slow.”

  17. Being slow costs more than being wrong

    “If you’re good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.”

  18. Disagree and commit saves time

    “If you have conviction on a particular direction even though there’s no consensus, it’s helpful to say, ‘Look, I know we disagree on this but will you gamble with me on it? Disagree and commit?’”

  19. Bosses disagree and commit too

    “If you’re the boss, you should do [disagree and commit] too. I disagree and commit all the time.”

  20. Without escalation, exhaustion settles disputes

    “No amount of discussion, no number of meetings will resolve [true misalignment issues]. Without escalation, the default dispute resolution mechanism for this scenario is exhaustion. Whoever has more stamina carries the decision.”

  21. A large company with a small company's heart

    “We can have the scope and capabilities of a large company and the spirit and heart of a small one. But we have to choose it.”

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