I attended the Wired: Disruptive by Design Conference earlier today at the Morgan Library in NYC. One of the best sessions was of course with Jeff Bezos, CEO of Amazon.com. I have an incredible amount of respect for Jeff, not only because he stayed true to his strategy in spite of an incredible amount of pressure during the bubble bust, but also because of the spectular innovations that have come out of Amazon over the years. The Kindle has revolutionized the e-reader market and launched Amazon into a consumer electronics company. Amazon Web Services of course has transformed Internet economics from fixed costs to variable ones, and unleashed a wave of new companies to boot. Jeff did not disappoint, and I thought I would share some of his thoughts below. My favorite from below – “The trick as an entrepreneur is to be stubborn on the big things and be very flexible on the details.” Enjoy, and feel free to post any other good ones you have from Jeff.
On the economics of e-books and the Kindle:
- A text book is re-sold 5 times over it’s life, which is why they cost so much. With digital books, publishers have the opportunity to sell that 5 times to consumers. The price can now come way down.
- Historically, we have never made money on bestsellers. We make money on the mix.
- For books where we have both physical and e-book inventory (300,000 books), Kindle unit sales are 35% of the physical book sales.
- “We humans do more of what is made easy”. You do more when you reduce the friction. Making buying books so easy makes people buy more.
- Reading is an important enough activity to have it’s own device.
- On multi-function devices versus signle function: “I like my phone… I like my swiss army knife, but I also like my steak knives too.”
- “The physical book has had a great 500 year run, but it’s time to change”
- “Our vision is to have every book ever printed, in any language, available within 60 seconds.”
- On Google’s pending deal with the US book industry: “It doesn’t seem right to get a prize for violating a large series of copyrights”
On staying true to the path and entrepreneurship:
- “We always noticed some of our harshest critics were our best customers. Told us we must be doing something right.”
- Regarding the run up in the bubble: “I always told our employees not to feel 30% smarter when the stock went up by that amount because one day it will go down by the same.”
- “One of the differences with founders and professional managers is that the founders care about the detail of the vision.”
- Regarding vision and strategy: “The trick as an entrepreneur is to be stubborn on the big things and be very flexible on the details.”
- “If you disrupt something, you have to be willing to be misunderstood for long periods of time.”
- Regarding products that seem very different: “A question people at large companies don’t ask enough is “Why not?””
- “I wouldnt know how to respond to someone if they said, “We cant do this because it’s not in our knitting.’”
- “The two things we do is work backwards from customer needs and work forward from our set of skills. AWS is an example of us working forward from our skills, while the Kindle is an example of us working backwards from customer needs.”
- “Many companies believe learning a new skill is akin to leaving your core competency.”
- “Errors of comission are over focused on versus errors of omission. People over dramatize how expensive failure is. You never hear of a company getting criticized for failing to try something.”
- On trying different ideas: “If you are in the investment phase and you stop doing it, the only thing that happens is your profits go up. How hard can that be?”
- On mistakes: “We launched Auctions, no one came. We licensed Google’s search and launced A9 and no one came. A year after we shut it down it was still my mom’s homepage.”
- Citing another quote in response to why they didn’t better service and if it was deliberate or not: “Never attribute to conspiracy what can be explained by incompetence.”
It was a great session and Jeff had some great lessons.