In his 1997 shareholder letter, Jeff Bezos issued a manifesto “It’s all about the long-term” where he laid out his approach to business and to running Amazon. He pledged that decisions would be made with a long-term lens and with a focus on market leadership. This manifesto has been included in every single shareholder letter for the last 20 years! After reading these letters, it is clear that the fundamentals of how Amazon does business remain the same. Talk about commitment and consistency.

It’s all about the long-term…

While Amazon takes financial outputs seriously, 100% of the company’s time is focused on inputs. This is because these inputs are controllable and are the most effective way to maximize financial outputs.

Put effort into inputs, not financial outputs


Setting the bar high on hiring has been the single most important element of Amazon’s success. During the interview process, Amazon asks each interviewer to consider three questions before making a hiring decision:<ul><li>Will you admire this person?</li><li>Will this person raise the average level of effectiveness of the group they’re entering?</li><li>Along what dimension will this person be a superstar?</li></ul>

Raise the bar on hiring… again and again

From the outset, Amazon’s goal was to build the world’s most customer-centric company. Bezos would constantly remind employees to wake up every morning terrified… not of the competition, but of Amazon’s own customers. Customers are fickle; they are loyal to a company until a competitor offers a better service. Amazon designed its core value proposition around keeping customers happy by constantly offering more selection, better convenience, and lower prices.

Customer centricity as a north star

Many large companies fail to launch new businesses from scratch because of the patience and nurturing required. One of Amazon’s competitive advantages is its culture which is supportive of small businesses with large potential.While Amazon’s culture demands that these businesses be high potential and differentiated, it does not require them to be large the day they are born.

Build a disciplined, patient, and nurturing culture

Bezos offers a set of guidelines for how to make decisions at high-velocity:<ul><li>Understand that decisions can be reversed: </li><li>Bias towards action: Most decisions should be made with close to 70% of the information needed. Waiting for 90%+ information will slow you down.</li><li>“Disagree and commit”: When consensus is not possible but you have conviction in a particular direction, “disagree and commit”. </li><li>Recognize when an agreement isn’t achievable: Sometimes different teams have different objectives and see the world differently. No discussion will change these views.</li></ul>

High-quality, high-velocity decision-making

<ul><li>A focus on the long-term is important for several reasons. First, for a company that drives growth through innovation, a long-term approach allows for experimentation and an acceptance of short-term failures.</li><li>Second, having a long-term orientation reduces the impact of stock price fluctuations on decision-making.</li><li>Third, when you are long-term oriented it aligns customer and shareholder interests. In the short term, this is not always the case.</li></ul>

Why long-term matters

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In every Amazon annual report, Jeff Bezos publishes a shareholder letter where he provides a broad overview of the company’s operations throughout the year. His letters are incredibly…

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