1999 – The platform matters

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 third letter in the series.

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

So what do you own when you have shares of Amazon – “You own a share of the world’s leading e-commerce platform”

And with that Jeff sets the tone for this letter. Now, it’s all about the platform.

Learning #1: Platforms allow you to create “tipping points”

Creating platforms allows you to lauch new related businesses faster, with a higher quality of customer experience, a lower incremental cost, a higher chance of success and faster path to scale and profitability.

And most importantly a platfom is comprised of brand, customers, technology, distribution cpability, domain expertise, great team, passion for innovation and obsession with the customer.

So a platform can be anything which has a potent combination of the above. This is something I am surely going to use in my next investor’s meeting.

Jeff goes on to say he will use this platform to build the world’s most customer centric company.

Learning #2: Take your partners along for the ride

A platform cannot be created in isolation. A successfull platform needs to take all stakeholders along for the ride.

Learning #3: Keep expanding your products and services

This is the first year where other products sold was more than 50% of the revenue Amazon got from books. Be continually expanding your products and services in a mindful manner and you will never stop growing

Learning #4: Operational excellance matters

It’s not about the big ideas. It’s all about continuous improvement and driving productivity whilst maintaining asset velocity that will make a great company.

Learning 5: Drive towards profitbility

Focus on getting profits. It’s amazing how much he talks about the end goal being profits. THis is something we havent heard much about in the last decade. Heck, we have 20 year old “startups” still making losses.

Learning 6: In the end, it’s all about the long term

I see this repeated almost everywhere by the Paypal mafia. Zero to One also talks about this.

My major takeaway here is that we shouldny build a product. We should build a platform which should keep on making things easier as we go on. If the level of difficulty to make the second million is the same as the first we are doing something increadibly wrong.