written by alastair barlow [blog]
As we get back to work this week at the start of a new decade, many businesses (and people in general) will be thinking about objectives (or New Year’s resolutions) for the coming year. While the business side of this should have been done a long time ago, it’s better late than never.
Here are some extracts from the original 1997 letter Jeff Bezos wrote to his shareholders. It has a number of extremely powerful points in it that are worth deliberating on to inspire you, not just for the year ahead, but your ultimate vision. It takes time to build sustainable long-term value, it takes a big long-term vision and obsessive focus on the few things that really matter (in Amazon’s case, customer satisfaction). You can read the full shareholder letter here.
Most interesting is Bezos’ relentless focus on the long-term and the vision of Amazon. He makes it very clear that his philosophy, which was (and is), very different from those of most public companies at the time.
For example, Yahoo, among many others, were obsessed with appeasing short-term shareholder demands. Constantly trying to maximise profitability and shareholder performance for the next quarter and year, rather than focusing on long-term investments and true value creation.
And where are Yahoo now?
Here are my favourite points to ponder…
1. Vision:“Tomorrow, through personalization, online commerce will accelerate the very process of discovery.”
2. Long-term strategy:“We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions.”
3. Reiterating the clear focus on the long-term:“Because of our emphasis on the long term, we may make decisions and weigh trade-offs differently than some companies.”
4. Very clear on what is important to the company, and not just the markets:“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.”
5. Understanding that the right people are key:“We will continue to focus on hiring and retaining versatile and talented employees, and continue to weight their compensation to stock options rather than cash. We know our success will be largely affected by our ability to attract and retain a motivated employee base, each of whom must think like, and therefore must actually be, an owner.”
How far ahead do you look? And what are the fundamentals you need to focus on to reach your vision?️