This is a great book summarizing Jeff Bezos’ philosophy in different aspects, so this review tries to put them together.
Attitude to customers
Bezos always thinks customer first, and he always wants Amazon to do the same. Also, from a business perspective and PR perspective, this is also a wise choice. Trust from customers is the most vital part to Amazon: without trust, no one would buy from Amazon; without trust, no seller (customers to Amazon Marketplace) would sell goods on this platform. Therefore, Bezos tries his best to embed this value to the company.
No amount of revenue was worth jeopardizing customer trust.
Bezos said. “When I read that letter, I thought, we don’t make money when we sell things. We make money when we help customers make purchase decisions.”
Bezos preached urgency: the company that got the lead now would likely keep it, and it could then use that lead to build a superior service for customers.
Sinegal explained the Costco model to Bezos: it was all about customer loyalty.
When given the choice of obsessing over competitors or obsessing over customers, we always obsess over customers.
Apart from gaining customer’s trust, Bezos also aims to user low price to increase the loyalty from customers. In short time, Amazon may lose money, but in long term, customers would stick to Amazon, and spend much more. Meanwhile, this can enable Amazon lower the price further as the cost decreases. This is a win-win scenario, and an infinite game.
“There are two kinds of retailers: there are those folks who work to figure how to charge more, and there are companies that work to figure how to charge less, and we are going to be the second, full-stop.
Lower prices led to more customer visits. More customers increased the volume of sales and attracted more commission-paying third-party sellers to the site.
When customers spent more, Amazon’s volumes increased, so it could lower shipping costs and negotiate new deals with vendors. That saved the company money, which would help pay for Prime and lead back to lower prices.
Attitude to work
Amazon is famous for hard work, even it reaches the milestone as one of the richest companies. This is Bezos’s attitude of work: long, hard and smart. Maybe this why Amazon can keep being innovative and disruptive.
In the old Bellevue house, Bezos had said to Kaphan and Davis, “You can work long, hard, and smart, but at Amazon.com you can pick only two out of three.” Now the young CEO liked to recite, “You can work long, you can work hard, you can work smart, but at Amazon you can’t choose two out of three.”
If a customer-service rep stayed on the phone long enough to fully solve each customer’s problem, the number of contacts per order might go down, but the average talk time would go up. If the customer-service rep tried to jump off each call quickly, average talk times would decline, but customers would be more likely to call back.
Communication is a sign of dysfunction. It means people aren’t working together in a close, organic way. We should be trying to figure out a way for teams to communicate less with each other, not more.
Attitude to Amazon
Amazon is the first and biggest baby of Bezos, and this biggest ecommence platform set a very high bar for other players in the same field. Among this high bar, being disruptive, trying to understand customers, being efficient, being disciplined are the keys.
“Jeff was always a big believer that disruptive small companies could triumph,”
Bezos was applying a kind of chaos theory to management, acknowledging the complexity of his organization by breaking it down to its most basic parts in the hopes that surprising results might emerge.
Great merchants have never had the opportunity to understand their customers in a truly individualized way,” he said. “E-commerce is going to make that possible.”
Instead of Get Big Fast, the company adopted a new operating mantra: Get Our House in Order. The watchwords were discipline, efficiency, and eliminating waste.
All new hires had to directly improve the outcome of the company.
Attitude to automation
Amazon is a typical example of applying automation to extreme, not to mention AWS. In its earlier day, Amazon developed its own supply chain and recommendation system to replace growing labor cost in these two aspects.
Allgor and his supply-chain algorithms team would become Amazon’s secret weapon, devising mathematical answers to questions such as where and when to stock particular products within Amazon’s distribution network and how to most efficiently combine various items in a customer’s order in a single box.
An algorithm called Amabot brought about the downfall of editorial. Amabot replaced the personable, handcrafted sections of the site with automatically generated recommendations in a standardized layout.
Be a cool company
Last but not least, Bezos defines being cool in one company memo.
Rudeness is not cool. Defeating tiny guys is not cool. Close-following is not cool. Young is cool. Risk taking is cool. Winning is cool. Polite is cool. Defeating bigger, unsympathetic guys is cool. Inventing is cool. Explorers are cool. Conquerors are not cool. Obsessing over competitors is not cool. Empowering others is cool. Capturing all the value only for the company is not cool. Leadership is cool. Conviction is cool. Straightforwardness is cool. Pandering to the crowd is not cool. Hypocrisy is not cool. Authenticity is cool. Thinking big is cool. The unexpected is cool. Missionaries are cool. Mercenaries are not cool.