A tech friend gives me shit about being a Jeff Bezos fanboy. I’m unabashedly a fan. His 1997 letter to Amazon shareholders is a blueprint for building a durable franchise in technology.
I recently compiled and read all of these letters from 1997-2011. Read together, it’s essentially a 15 year narrative of building long-term value in technology and also a history of the Internet and e-commerce.
Here are some random nuggets:
- Free cash flow was their focus since 1997. They never waver on this through 15 years.
- “Will you admire this person?” is a question they ask when hiring. (1998)
- Even more than 10 years ago, Bezos thought about building an “e-commerce platform,” a now trendy term. (1999)
- The 2000 letter begins with one word: “Ouch.”
- Bezos defines “shareholder value”: free cash flow per share. (2001)
- Focusing on customer experience creates operating leverage, another theme throughout the letters. (2002)
- There are 2 pages with an example describing why profit is not cash. And that free cash flow reigns. (2003)
- Even though “the heavy lifting is done by math”, when making business decisions, the prime ingredient is human “judgment.” (2004, citing a research paper that inspired his thoughts.)
- Why Amazon launched AWS. (2005)
- The Kindle launches. “We humans co-evolve with our tools. We change our tools, and then our tools change us.” (2007)
- The first paragraph in the 2008 letter is my favorite. It was written during the financial meltdown. “Seek instant gratification - or the elusive promise of it - and chances are you’ll find a crowd there ahead of you.” (2008)
- “Start with customers, and work backwards.” This sounds like a punchline but he explains in prior letters how the company applies this rigorously. (2009)
- The 2010 letter feels like a middle finger to anyone who doubts they are at heart a technology company.
- “Even well-meaning gatekeepers slow innovation. When a platform is self service, even the improbable ideas can get tried because there’s no expert gatekeeper ready to say "that will never work!” (2011)
I uploaded the printout of these letters here:
Amazon Shareholder Letters 1997-2011