Founders
Episode 155 #155 Jeff Bezos
Founders

Episode 155: #155 Jeff Bezos

Founders

Episode 155

#155 Jeff Bezos

David Senra is the host of Founders, where he studies history's greatest entrepreneurs. This is what he learned from reading Invent and Wander: The Collected Writings of Jeff Bezos, with an introduction by Walter Isaacson.

What I learned from reading Invent and Wander: The Collected Writings of Jeff Bezos, With an Introduction by Walter Isaacson.

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[2:38]  The whole point of moving things forward is that you run into problems, failures, things that don't work. You need to back up and try again. Each one of those times when you have a setback, you get back up and you try again. You're using resourcefulness; you're using self-reliance; you're trying to invent your way out of a box. We have tons of examples at Amazon where we’ve had to do this. 

[4:08] I would much rather have a kid with nine fingers than a resourceless kid. 

[5:51]  I am often asked who, of the people living today, I would consider to be in the same league as those I have written about as a biographer: Leonardo da Vinci (#15), Benjamin Franklin (#115), Ada Lovelace, Steve Jobs (#5), and Albert Einstein. All were very smart. But that’s not what made them special. Smart people are a dime a dozen and often don’t amount to much. What counts is being creative and imaginative. That’s what makes someone a true innovator. And that’s why my answer to the question is Jeff Bezos. 

[8:26] One final trait shared by all my subjects is that they retained a childlike sense of wonder. At a certain point in life, most of us quit puzzling over everyday phenomena.  Our teachers and parents, becoming impatient, tell us to stop asking so many silly questions. We might savor the beauty of a blue sky, but we no longer bother to wonder why it is that color. Leonardo did. So did Einstein, who wrote to another friend, “You and I never cease to stand like curious children before the great mystery into which we were born.” We should be careful to never outgrow our wonder years—or to let our children do so. 

[11:50] Jeff’s childhood business heroes were Thomas Edison and Walt Disney. “I’ve always been interested in inventors and invention,” he says. Even though Edison was the more prolific inventor, Bezos came to admire Disney more because of the audacity of his vision. “It seemed to me that he had this incredible capability to create a vision that he could get a large number of people to share.” 

[17:49] Keeping his focus on the customer, he emailed one thousand of them to see what else they would like to buy. The answers helped him understand better the concept of “the long tail,” which means being able to offer items that are not everyday best sellers and don’t command shelf space at retailers. “The way they answered the question was with whatever they were looking for at the moment. And I thought to myself we can sell anything this way.”

[19:26] Every time a seismic shift takes place in our economy, there are people who feel the vibrations long before the rest of us do, vibrations so strong they demand action—action that can seem rash, even stupid

[22:00] “No customer was asking for Echo,” Bezos says. “Market research doesn’t help. If you had gone to a customer in 2013 and said, ‘Would you like a black, always-on cylinder in your kitchen about the size of a Pringles can that you can talk to and ask questions, that also turns on your lights and plays music?’ I guarantee they’d have looked at you strangely and said, ‘No, thank you’”

[24:14] We will continue to focus relentlessly on our customers.  

[24:58] We are working to build something important, something that matters to our customers, something that we can all tell our grandchildren about. Such things aren’t meant to be easy. 

[26:22] We are doubly blessed. We have a market-size unconstrained opportunity in an area where the underlying foundational technology we employ improves every day. That is not normal

[29:14] Start with the customer and work backward. That is the best way to create value. 

[32:19] Amazon’s culture is unusually supportive of small businesses with big potential, and I believe that’s a source of competitive advantage. 

[35:47] Seek instant gratification —or the promise of it—and chances are you’ll find a crowd there ahead of you.

[37:51] At a fulfillment center recently, one of our Kaizen experts asked me, “I’m in favor of a clean fulfillment center, but why are you cleaning? Why don’t you eliminate the source of dirt?” I felt like the Karate Kid.  

[39:21] When we are at our best, we don’t wait for external pressures. We are internally driven to improve our services, adding benefits and features, before we have to. We lower prices and increase value for customers before we have to. We invent before we have to. These investments are motivated by customer focus rather than by reaction to competition. 

[42:48] Outsized returns often come from betting against conventional wisdom, and conventional wisdom is usually right. Given a ten percent chance of a one hundred times payoff, you should take that bet every time. But you are still going to be wrong nine times out of ten. We all know that if you swing for the fences, you’re going to strike out a lot, but you’re also going to hit some home runs. The difference between baseball and business is that baseball has a truncated outcome distribution. When you swing, no matter how well you connect with the ball, the most runs you can get is four. In business, every once in awhile, when you step up to the plate, you can score one thousand runs. This long-tailed distribution of returns is why it’s important to be bold. Big winners pay for so many experiments.  

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#155 Jeff Bezos

Introduction

"You learn different things from your grandparents than you do from your parents. It's just a very different relationship. I spent all my summers from age 4 to 16 on my grandfather's ranch. He was incredibly self-reliant. If you're in the middle of nowhere, you don't pick up the phone and call somebody when something breaks. You fix it yourself. As a kid, I got to see him solve all these problems himself. He was a careful, conservative, quiet and introverted sort of person, not prone to crazy acts."

"One day, he was all by himself at the main gate of the ranch, and he forgot to put the car in park. When he got to the gate, he noticed the car was slowly rolling down to the gate. He thought this is fantastic. I have just enough time to unlatch the gate, throw the gate open and the car is going to drive right through, and it will be wonderful. He almost got the gate unlatched when the car hit the gate and caught his thumb between the gate and the fence post, stripping all of the flesh off his thumb. It was just hanging there by a tiny little thread."

"He was so angry at himself that he ripped that piece of flesh off and threw it in the brush, got back in the car, and drove himself to the emergency room 16 miles away. And when he got there, they said, "This is great. We can reattach the thumb. Where is it?" He said, "Oh, I threw it in the brush." They drove back with the nurses and everybody and they looked for hours for the thumb, and they never found that piece of flesh. Something had probably eaten it. They took him back to the emergency room and said, "Look, you're going to have to get a skin graft for that. We can sew your thumb to your stomach and leave it there for 6 weeks. That's the best way to do it, or we can just cut a skin graft from your butt. And it won't ever be as good, but the advantage is your thumb won't be sewn to your stomach for 6 weeks."

"And he said, "I'll take option #2. Just do the skin graft from my butt." That's what they did. It was very successful, and his thumb worked fine. But the funniest thing about the story is that I have incredibly vivid memories of him. And definitely, his mornings were completely ritualized. He would wake up, eat breakfast, read the newspaper and shave with an electric razor for a really long time, for like 15 minutes. And when he was done shaving his face with that razor, he would take 2 quick passes over his thumb because his thumb grew butt hair, which, by the way, did not bother him at all. The whole point of moving things forward is that you run into problems, failures, things that don't work. You need to back up and try again. Each one of those times when you have a setback, you get back up and you try again."

"You're using resourcefulness. You're using self-reliance. You're trying to invent your way out of a box. We have tons of examples at Amazon when we had to do this. We failed so many times. I think of this as a great place to fail. We're good at it. We've had so much practice. To give you one example, many years ago, we wanted a third-party selling business because we knew we could add selection to the store. We started Amazon Auctions. Nobody came. Then we opened this thing called zShops, which was fixed-price auctions".

"And again, nobody came. Each of these failures was like 1 year or 1.5 years long. We finally came across this idea of putting the third-party selection on the same product detail pages as our own retail inventory. We called this marketplace, and it started working right away. That resourcefulness of trying new things, figuring things out, what do customers really want, pays off in everything. It pays off even in your daily life. How do you help your children? What's the right thing? Even when our kids were 4, we would let them use sharp knives. And when they were 7 or 8, we would let them use certain power tools. My wife has this great saying, 'I would much rather have a kid with 9 fingers than a resourceless kid,' which is a great attitude about life."

That was an excerpt titled resourcefulness from the book that I'm going to talk to you about today, which is Invent and Wander: The Collected Writings of Jeff Bezos, with an Introduction by Walter Isaacson. So there's 3 main components of the book. The first is a rather long introduction written by Walter Isaacson. That's about 30 pages long.

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