How Amazon resists short-term thinking

Edited excerpt from The Institutional Yes, an interview with Jeff Bezos by Julia Kirby and Thomas A. Stewart:

We are willing to plant seeds and wait a long time for seeds to turn into trees. I’m very proud of this piece of our culture, because I think it is somewhat rare. We’re not always asking ourselves what’s going to happen in the next quarter, and focusing on optics, and doing those other things that make it very difficult for some publicly traded companies to have the right strategy.

Every new business we’ve ever engaged in has initially been seen as a distraction by people externally, and sometimes even internally. They’ll say, “Why are you expanding outside of media products? Why are you going international? Why are you entering the marketplace business with third-party sellers?” We’re getting it now with our new infrastructure web services: “Why take on this new set of developer customers?”

These are fair questions. There’s nothing wrong with asking them. But they all have at their heart one of the reasons that it’s so difficult for incumbent companies to pursue new initiatives. It’s because even if they are wild successes, they have no meaningful impact on the company’s economics for years. What I have found—and this is an empirical observation; I see no reason why it should be the case, but it tends to be—is that when we plant a seed, it tends to take five to seven years before it has a meaningful impact on the economics of the company.

Notes:
For more on Jeff Bezos’ thinking see: (i) Jeff Bezos on strategy, (ii) Jeff Bezos on how much you should spend on potential vs. actual customers, (iii) The question that Amazon answers to set its strategy, (iv) Lessons from Jeff Bezos: Set “audacious and inspirational” goals.

One thought on “How Amazon resists short-term thinking

  1. Pingback: Tom Tunguz’ five keys to building a successful company | A Founder's Notebook

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