Excerpt From: 11 Principles Every Entrepreneur Can Learn From Jeff Bezos

March 26, 2021 | AgFocus-Ag Focus | BusinessFocus-Business Focus | BankingFocus-Banking Focus

The spring-like weather has been a welcome thing, and hopefully that means a pick-up in your business as your customers become more “on the move” with the nicer weather. We’re a year in from when the COVID-19 pandemic started in the United States and in our area, but as we’ve seen, our rural communities have kept going relatively well. While you keep working to raise the bar of success in your business, and while we recognize that businesses such as Amazon in particular may be a competitor of sorts for some businesses in our local area, we came across an article from Inc. Magazine this month that gives some good insights that Amazon’s former CEO offers that any business owner can implement and receive benefit in any type or size of business. 

Excerpt From: 11 Principles Every Entrepreneur Can Learn From Jeff Bezos

By Jason Alten  |  INC Magazine

  1. Use the regret minimization framework.

The idea was to think about turning 80 and looking back on his life. “I want to have minimized the number of regrets I have,” Bezos has explained. “I knew that when I was 80, I was not going to regret having tried this. I was not going to regret trying to participate in this thing called the internet that I thought was going to be a really big deal.”

     2. Find the right opportunity.

Bezos decided to build an internet business first, not a book business. He had been working in New York City for D.E. Shaw, the investment firm, when he heard that internet use was growing at an annual rate of 2,300 percent. His math, in fact, was grossly incorrect. The internet was growing by a factor of 2,300, meaning it was actually growing at a rate of 230,000 percent. That math worked too.

     3. Be customer-obsessed.

Many companies preach the gospel of customer focus. Bezos lived it. “The secret sauce of Amazon–­there are several principles at Amazon­–but the number one thing that has made us successful, by far, is obsessive, compulsive focus on the customer,” Bezos told David Rubenstein in a 2018 interview at the Economic Club of Washington, D.C.

He wasn’t talking about feel-good service. It was more about creating a company people couldn’t live without.

     4. Make your value exceed all the costs.

Even as the web became easier to access, the question remained: Does your site make your customers’ lives easier or better in some tangible way? If so, they’ll probably buy just about anything from you. In Amazon’s case, that’s almost exactly what happened.

     5. Fear customers, not competitors.

Don’t be afraid of our competitors, because they’re never going to send us money, Bezos once told his team. “Be afraid of our customers, because those are the folks who have the money.” In other words, focus your worry where it really matters.

     6. Focus on the long term.

“We believe that a fundamental measure of our success will be the shareholder value we create over the long term,” Bezos wrote. “This value will be a direct result of our ability to extend and solidify our current market leadership position.”

Prime is a great example. When launched in 2005, it cost $79 a year and offered free, two-day shipping. Bezos would later write: “We want Prime to be such a good value that you’d be irresponsible not to be a member.”

     7. Feed the flywheel.

Books were always going to be just the beginning. To attract more customers, Bezos planned on having a large selection of products, at low prices and with great customer service. Increasing the number of customers would attract third-party sellers to the platform, which would increase the selection of products, which would attract even more customers, and so on. The more products Amazon sold, the more efficient its processes and systems became. The higher the sales volume, the better the prices it could get from suppliers, and the better it could devote those lower costs to growth.

     8. Hire for intensity.

Do you want missionaries or mercenaries? That’s the question. “How do you hire great people and keep them from leaving?” Bezos asks. “By giving them, first of all, a great mission–something that has real purpose, that has meaning.”

     9. Protect your culture.

“We never claim that our approach is the right one–just that it’s ours–and over the last two decades, we’ve collected a large group of like-minded people,” Bezos wrote to investors in 2016.

     10. Know what kind of decision you’re making.

Amazon breaks down the deci­sions it needs to make into two types. “There are decisions that are irreversible and highly consequential; we call them one-way doors, or Type 2 decisions,” Bezos explains in Invent & Wander, a collection of his writings.

Bezos has described his role as the “chief slowdown officer,” and in Type 2 cases, he always looks for more information, since the decision is very important and once it’s made, there’s no going back. Most decisions, Bezos says, are two-way doors, or Type 1 decisions. These are less consequential. Make the wrong choice and you can go back. The problem, he says, is confusing the two, and taking too long to make Type 1 decisions. Confusing the two types of decisions is something every entrepreneur should avoid.

     11. Listen to your critics – but not too much.

People who are on a mission expect criticism. “If you can’t afford to be misunderstood, don’t do anything new or innovative,” Bezos says. He also offers some insight on handling criticism. “First, look in a mirror and decide if your critics are right,” Bezos says. “If they’re right, change.”