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Amazon's Bezos: 3 Keys to Business Success

When Amazon's boss and founder Jeff Bezos shares advice on business success, it's worth listening. The second-wealthiest man in the world turned the retail industry on its ear with Amazon, and did it again a few years later with the cloud.

Bezos shares his advice in an annual letter to shareholders. This year's missive dropped this week, and it contains great advice.

Preserve startup culture
Bezos draws a distinction between "Day 1" companies and "Day 2" companies. He doesn't explain those terms, but from the context it's clear.

Day 1 companies are startups and companies like Amazon.com Inc. (Nasdaq: AMZN) that preserve startup culture into maturity.

Day 2 companies are complacent incumbents that keep doing the same thing the same way over and over.

Photo by Matthew Paul Argall (Own work) [CC BY-SA 3.0], via Wikimedia Commons
Photo by Matthew Paul Argall (Own work) [CC BY-SA 3.0], via Wikimedia Commons

Day 1 companies succeed. Day 2 companies are headed for failure (though it may take years to get there), Bezos says.

Bezos believes in this philosophy so strongly that he named the building he works at "Day 1."

Focus on the customer
Bezos calls it "True Customer Obsession." As Bezos points out, some businesses focus on competitors, products, technology, business model or other factors. But "obsessive customer focus" is best, Bezos says.

That's because "customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great," Bezos says. Customer obsession pays off because "your desire to delight customers will drive you to invent on their behalf."

Focus on results, not proxies
"As companies get larger and more complex, there's a tendency to manage to proxies," Bezos says. "This comes in many shapes and sizes, and it's dangerous, subtle, and very Day 2."

Processes are one kind of proxy, Bezos says.

"Good process serves you so you can serve customers," Bezos says. "But if you're not watchful, the process can become the thing... You stop looking at outcomes and just make sure you're doing the process right." He adds, "It's always worth asking, do we own the process or does the process own us?"

Bezos doesn't say this, but United Airlines is learning this lesson the hard way now. The airline followed its own procedure in trying to bump passenger David Dao from a flight. The result is an ongoing disaster.

United Chief Executive Oscar Munoz has apologized several times, but his first reaction was to defend the airline and its employees. And why not? They followed the process.

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Process is one kind of proxy, Bezos says. Market research and customer surveys are other proxies. These are tools, not results.

There's more to Bezos's letter. He advises companies to embrace emerging trends, make decisions fast, embrace disagreements and more.

What role can technology -- specifically the cloud -- play in all this? How can technology help companies preserve the Day 1 culture that Bezos describes? Leave a message and let us know.

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— Mitch Wagner Follow me on Twitter Visit my LinkedIn profile Visit my blog Friend me on Facebook Editor, Enterprise Cloud News

JohnMason 4/30/2017 | 1:48:57 PM
Blue Origin I wonder if Mr. Bezos is planning to put data center clouds up in the clouds via his Blue Origin venture.
kq4ym 4/24/2017 | 4:32:00 PM
Re: Startup I'm not so sure I'd believe the "Day 2" type company for the simplicy of what Bezon may be claiming. Keeping the start up culture going may sound like another simple solution for the road to success, but if it were all that easy there sure would be a lot of companies just taking his advice and rolling in money and fame. Sure he's a winner but how much was luck and how much pluck and the thousanda of other various coming to play to become the world's 2nd richest? Anyway, some good things to think over from his speech.
Mitch Wagner 4/17/2017 | 1:16:17 PM
Re: Startup It's natural for companies that have succeeded doing a thing to keep doing that thing. Eventually you start hearind the dread phrase, "That's not how we do things here."
danielcawrey 4/15/2017 | 1:22:52 PM
Startup Keeping that startup culture is not easy. Companies like Google are trying to keep a culture of innovation, which I do think is one of the hardest things to do. 

I just watched a documentary called Silicon Cowboys about Compaq. They talked about this problem. It's on Netflix - check it out!
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