1998 – Customer Obsession and Cashflow

I have always been intrigued by the letters sent to shareholders by both Warren Buffet and Jeff Bezos. They are inspiring and for wannabes like yours truly a source of motivation and hope. So I am creating a series of articles on what learnings I took away from the letters of Jeff Bezos. This is the second letter in the series.

You can check out the complete series here: https://alphonserajdavid.com/category/book-reviews/non-fiction/jeff-bezos-stakeholder-letters/

Compared to the 1997 letter, this letter is very numeric in nature, almost as if Jeff had to convince the world that the numbers prove Amazon’s existence.

That being said, once the stream of numbers was shared he throws out this gem “Customers are perceptive and smart, and that brand image follows reality and not the other way around”

I pick up two learnings from this:

Learning #1: Customers are not fools

Learning #2: Do not fake your brand

Considering the amount of advice we get around “fake it till you make it” I like this ethos of respecting your customers and thinking they are actually smart.

Also with a large number of image coaches and CXOs positioning a version of themselves completely removed from reality, it’s easy to understand what makes Amazon different. Love them or hate them; they are authentic.

Also, moving forward he talks a lot about the need to have constant improvement, experimentation, and innovation in every initiative.

Learning #3: Always Iterate

Again there is a separate paragraph on hiring good talent. This time he talks about how as a team they “Work hard, have fun and make money.”

Here, he talks about the three questions he will ask during hiring meetings with his team

• Will you admire this person?
• Will this person raise the average level of effectiveness of the group they are entering?
• Along what dimensions might this person be a superstar?

I have read this earlier before in my career and has profoundly affected the way I hire. This combined with Grant Cardone’s rule of hiring 10x employees has held me in good stead while hiring.

Also this sentence in goals for 1999 where he says “We intend to invest in teams, process, communication and people development practices” is interesting.

It’s easy to get sucked into hyperbole, but this letter had the ability to be grounded in numbers with a bit of long term journey discussion and ending it with a core focus for the future.

In short Jeff kept it real.