Late last year, Amazon founder Jeff Bezos used a company event to have a fireside chat with Amazon Web Services’ chief technology officer, Werner Vogels. The chat was meant to give employees some insights into Bezos’s thoughts about what it takes for a company to succeed.
The audience was responsible for Amazon Web Services, which is everything that Amazon does for clients and businesses in the cloud. Netflix, for example, runs its business using Amazon Web Services. I, much more modestly, use the Amazon Cloud Player to store music.
I’d encourage you to watch the entire video above. It’s about 42 minutes, but I don’t think you’ll ever be bored.
Among the insights Bezos offers are these:
- If you’re building a business for the long term, it’s important to focus on what might change, but it’s even more important to build a business around things that are stable. For example, customers are always going to want low prices, reliability, and vast selection, so if you put energy into making those things happen today, you’ll still be delivering strong service to customers a decade from now.
- If you want to be a company that focuses on pioneering and exploring, then make sure you surround yourself with others who want to do the same. Amazon grows by making these things happen, not by pursuing a conqueror mentality that’s all about beating competitors.
- If you’re going to be a pioneer, be willing to fail and to be misunderstood for a while. When you’re trying something new, it will take time for people to understand what you’re doing. But if you have a really useful product or solution, it will catch on.
- Ramp up your rate of experimentation. Innovation requires experimentation, and the more you can experiment, the more good ideas will emerge.
- The balance of power has shifted to consumers. If you have a business model that pursues success by relying on consumers having incomplete information, you need to work on changing your business model. In the Internet age, you will fail.
- The further a defect moves downstream, the more expensive it is to correct. You need to empower all employees to act if a defect appears. At Amazon, for example, any customer service representative can pull a product off the Amazon website if the employee thinks there is a problem with the product.
- High margins cover a lot of sins. Bezos prefers low-margin businesses because they require efficiency and because they are always better for customers.
- Entrepreneurship is about risk-taking, and some luck is necessary. But entrepreneurs are also about reducing risk whenever possible to increase their odds of success.
Bezos also talked about two projects that help keep him focused on big ideas. One is building a 10,000-year clock, designed to be a monument to the importance of long-term thinking. The other is Blue Origin, which has the goal of making space travel much more affordable for many more people.
It’s an exciting interview. You should watch it from start to finish.