“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.” – Walter Isaacson
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In Jeff Bezos’s own words, Invent and wander highlights the core principles and philosophy that have guided him in creating, building, and leading Amazon and Blue Origin. Jeff Bezos is one of my favorite entrepreneurs not only because he is the richest man in the world, but because of his long-term view of business and life.
In this collection of Jeff Bezos’s writings—his unique and strikingly original annual shareholder letters, plus numerous speeches and interviews that provide insight into his background, his work, and the evolution of his ideas. Spanning a range of topics across business and public policy, from innovation and customer obsession to climate change and outer space, this book provides a rare glimpse into how Bezos thinks about the world and where the future might take us.
Invent and Wander: The Collected Writings of Jeff Bezos is a very great book that shares the fascinating and inspiring story of Jeff Bezos, how he started Amazon, his obsession to create the most customer-centric company in the world, his core philosophical frameworks such as It is always day one, regret minimization, disagree and commit among others.
Here are some of my favorite takeaways from reading, Invent and Wander: The Collected Writings of Jeff Bezos:
“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.” – Walter Isaacson
“So, what are the ingredients of creativity and imagination, and what makes me think that Bezos belongs in the same league as my other subjects?
According to Walter Isaacson, innovative and creative people are: Passionately Curious, they connect Art and Science, they are curious, they have a reality-distortion field, they think differently and they retain their childlike sense of wander.
“Jeff Bezos embodies these traits. He has never outgrown his wonder years. He retains an insatiable, childlike, and joyful curiosity about almost everything. His interest in narrative and storytelling not only comes from Amazon’s roots in the bookselling business; it is also a personal passion. As a kid, Bezos read dozens of science fiction novels each summer at a local library, and he now hosts an annual retreat for writers and moviemakers.
Likewise, although his interest in robotics and artificial intelligence was sparked because of Amazon, these fields have grown to become intellectual passions, and he now hosts another gathering each year that brings together experts interested in machine learning, automation, robotics, and space. He collects historical artifacts from great moments in science, exploration, and discovery. And he connects this love of the humanities and his passion for technology to his instinct for business.”
“That trifecta—humanities, technology, business—is what has made him one of our era’s most successful and influential innovators. Like Steve Jobs, Bezos has transformed multiple industries.”
Amazon
- Amazon, the world’s largest online retailer, has changed how we shop and what we expect of shipping and deliveries. More than half of US households are members of Amazon Prime, and Amazon delivered ten billion packages in 2018, which is two billion more than the number of people on this planet.
- Amazon Web Services (AWS) provides cloud computing services and applications that enable start-ups and established companies to easily create new products and services, just as the iPhone App Store opened whole new pathways for business. Amazon’s Echo has created a new market for smart home speakers, and Amazon Studios is making hit TV shows and movies.
- Amazon is also poised to disrupt the health and pharmacy industries. At first, its purchase of the Whole Foods Market chain was confounding until it became apparent that the move could be a brilliant way to tie together the strands of a new Bezos business model, which involves retailing, online ordering, and superfast delivery, combined with physical outposts. Bezos is also building a private space company with the long-term goal of moving heavy industry to space, and he has become the owner of the Washington Post.
Voracious Reader
- Jeff was a voracious reader with an adventurous mind. His grandfather would take him to the library, which had a huge collection of science fiction books. Over the summers Jeff worked his way through the shelves, reading hundreds of them. Isaac Asimov and Robert Heinlein became his favorites, and later in life he would not only quote them but also occasionally invoke their rules, lessons, and lingo.
Single-Mindedness
- At his Montessori preschool, Bezos was already fanatically focused. “The teacher complained to my mother that I was too task-focused and that she couldn’t get me to switch tasks, so she would have to just pick up my chair and move me,” he recalls. “And by the way, if you ask the people who work with me, that’s still probably true today.
David E. Shaw: Founding of Amazon
- After graduation Bezos went to New York to apply his computer skills to the financial industry. He ended up at a hedge fund run by David E. Shaw, which used computer algorithms to discover pricing disparities in the financial markets. Bezos took to the work with a disciplined zeal. Foreshadowing the workplace fanaticism he would later try to instill at Amazon, he kept a sleeping bag in his office in case he wanted to sleep there after a late night of work.
While working at the hedge fund in 1994,
Bezos came across the statistic that the web had been growing by more than 2,300 percent each year. He decided that he wanted to get aboard that rocket, and he came up with the idea of opening a retail store online, sort of a Sears catalogue for the digital age.
Regret Minimization
- When he told David Shaw that he wanted to leave the hedge fund to pursue this idea, Shaw took him on a two-hour walk through Central Park. “You know what, Jeff, this is a really good idea. I think you’re onto a good idea here but this would be a better idea for somebody who didn’t already have a good job.” He convinced Bezos to think about it for a couple of days before making a decision. Bezos then consulted his wife, MacKenzie, whom he had met at the hedge fund and married the year before. “You know you can count me in 100 percent, whatever you want to do,” she said.”
- To make the decision, Bezos used a mental exercise that would become a famous part of his risk-calculation process. He called it a “regret minimization framework.” He would imagine what he would feel when he turned eighty and thought back to the decision. “I want to have minimized the number of regrets I have,” he explains. “I knew that when I was eighty, I was not going to regret having tried this. I was not going to regret trying to participate in this thing called the internet that I thought was going to be a really big deal. I knew that if I failed, I wouldn’t regret that, but I knew the one thing I might regret is not ever having tried. I knew that that would haunt me every day.
He would imagine what he would feel when he turned eighty and thought back to the decision. “I want to have minimized the number of regrets I have
It is always Day One
- Since our founding, we have strived to maintain a “Day One” mentality at the company. By that I mean approaching everything we do with the energy and entrepreneurial spirit of Day One. Even though Amazon is a large company, I have always believed that if we commit ourselves to maintaining a Day One mentality as a critical part of our DNA, we can have both the scope and capabilities of a large company and the spirit and heart of a small one.
Success and Failure: The Inseparable Twins
- Sometimes a failure and a success go together. That is what happened with the flop of Amazon’s Fire Phone and the success of the Amazon Echo, the company’s smart speaker and home assistant device known as Alexa. “While the Fire Phone was a failure, we were able to take our learnings (as well as the developers’) and accelerate our efforts building Echo and Alexa,” Bezos wrote in his 2017 stockholder letter.
It’s All About the Long Term – 1997 Letter to shareholders
- We believe that a fundamental measure of our success will be the shareholder value we create over the long term. This value will be a direct result of our ability to extend and solidify our current market leadership position. The stronger our market leadership, the more powerful our economic model. Market leadership can translate directly to higher revenue, higher profitability, greater capital velocity, and correspondingly stronger returns on invested capital..
“When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we’ll take the cash flows.”
Obsess over Customers
“We intend to build the world’s most customer-centric company. We hold as axiomatic that customers are perceptive and smart, and that brand image follows reality and not the other way around. Our customers tell us that they choose Amazon.com and tell their friends about us because of the selection, ease-of-use, low prices, and service that we deliver.”
Long-term orientation interacts well with customer obsession. If we can identify a customer need and if we can further develop conviction that that need is meaningful and durable, our approach permits us to work patiently for multiple years to deliver a solution.
No Rest for the Weary
“But there is no rest for the weary. I constantly remind our employees to be afraid, to wake up every morning terrified. Not of our competition, but of our customers. Our customers have made our business what it is, they are the ones with whom we have a relationship, and they are the ones to whom we owe a great obligation. And we consider them to be loyal to us—right up until the second that someone else offers them a better service.”
A DREAMY BUSINESS OFFERING has at least four characteristics. Customers love it, it can grow to very large size, it has strong returns on capital, and it’s durable in time—with the potential to endure for decades. When you find one of these, don’t just swipe right, get married.
Jeff Bezos on Failure
Failure
- One area where I think we are especially distinctive is failure. I believe we are the best place in the world to fail (we have plenty of practice!), and failure and invention are inseparable twins. To invent you have to experiment, and if you know in advance that it’s going to work, it’s not an experiment. Most large organizations embrace the idea of invention but are not willing to suffer the string of failed experiments necessary to get there.
- 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’re 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, however, 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 a while, 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.
The Power of Wandering
“I believe in the power of wandering. All my best decisions in business and in life have been made with heart, intuition, and guts, not analysis. When you can make a decision with analysis, you should do so, but it turns out in life that your most important decisions are always made with instinct, intuition, taste, and heart.”
Jeff Bezos on Hiring
During Amazons’ hiring meetings, we ask people to consider three questions before making a decision:
Will you admire this person?
If you think about the people you’ve admired in your life, they are probably people you’ve been able to learn from or take an example from. For myself, I’ve always tried hard to work only with people I admire, and I encourage folks here to be just as demanding. Life is definitely too short to do otherwise.
Will this person raise the average level of effectiveness of the group they’re entering?
We want to fight entropy. The bar has to continuously go up. I ask people to visualize the company five years from now. At that point, each of us should look around and say, “The standards are so high now—boy, I’m glad I got in when I did!
Along what dimension might this person be a superstar?
- Many people have unique skills, interests, and perspectives that enrich the work environment for all of us. It’s often something that’s not even related to their jobs. One person here is a National Spelling Bee champion (1978, I believe). I suspect it doesn’t help her in her everyday work, but it does make working here more fun if you can occasionally snag her in the hall with a quick challenge: “onomatopoeia!”
All the best in your quest to get better. Don’t Settle: Live with Passion.
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