What Startups Can Learn From Amazon’s Annual Letter To Shareholders

Jeff Bezos led his team to create a company more valuable than many of its peers combined. 

He created a company that not only survived – but thrived.

Photo: Daniel S. Williams, Source: Courtesy Photo

Almost like a Harry Potter fan club, Amazon’s year-end letter to shareholders is something investors and fans alike eagerly await.

After all it’s penned by none other than the visionary at the helm, Jeff Bezos.

If you’ve ever read the long letters of Berkshire Hathaways’ Warren Buffet, Bezos’ comes in much shorter, but just as insightful.

While corporate America can seem removed at times for many, I think shareholder letters are an invaluable read for entrepreneurs, investors, business school students, and frankly for anyone who wants an inside look at how to navigate the journey of innovation and insight that creates lasting change – albeit epitomized today through juggernaut Amazon Inc.

Here’s a look at my personal takeaways from the Amazon 2016 Letter to Shareholders.


1. Remain a ‘Day 1 Company

Bezos dediates a good amount of time outling the concept of being a Day 1 Company. Day 1 companies stretch the boundaries of ordinary; they prevent themselves from “becoming a Day 2 Company,” something that commonly spells the death of businesses – instantly or over a gradual descent.

Perhaps one of the biggest implications Bezos outlines: Employees have an integral role to play. They must all evaluate the culture. They ought to think strategically. But even more so, they must avoid the consensus decision-making that waits for things to happen.

Companies can focus their business along the dimensions of competitors, products, technology, or a business model itself, yet the one thing that makes a company good is continuous improvement – incrementally. Another way to phrase it is this: Don’t devote 100% of your time to pondering what competitors are doing. Be different.


2. Be customer centric

It’s no secret Amazon’s path to dominance has relied heavily on gambles. But even more so Amazon’s continued success stems from its commitment to the customer. 

Bringing new products to customers, new ways to engage, and asking the perennial question: How can we base our business around our customer?

Source: Amazon.com


3. Commit to the long haul

Much of Bezos’ commentary angles around the notion that short-term fixation stunts development and prevents a true business revolution.

 When considering a long-term approach, Bezos suggests 

”…If you’re willing to invest on a seven-year time horizon, you’re now competing against a fraction of those people, because very few companies are willing to do that.”

I think the long-haul, as Bezos calls it, requires a commitment from all stakeholders. Employees ought to become individual “owners” within the process and stay motivated.

 This is similar to personal growth through goal setting and optimization over time. This requires leaders to play a game focus, not on the next 3 years, but the next twenty.


Final thoughts

Like people, businesses should iterate their plans, create checks along the way and seek to fend off obsolescence. Change needs to be embraced.

As we look back at the history of Amazon, we see a foray into ventures stretching the boundaries of what many thought a retailer could do. 

Bezos led his team, in turn applying his values as a leader to create a company more valuable than many of its peers combined. 

A company that has not only ‘survived’ – but thrived.

 His insights could help you do the same.


  Amazon 2016 Letter to Shareholders by CNBC.com on Scribd


This article has been edited and condensed.

Daniel S. Williams is a cum laude graduate from the Carroll School of Management of Boston College (’16), holding a B.S. in Finance and enjoys writing about all things startups and business topics. His articles have been featured by award-winning YFS Magazine and other publications such as SiliconValleyGlobe.com, Retail TouchPoints, and Fibre2Fashion. He is HubSpot Inbound certified, as well as both Google AdWords and Analytics certified. Learn more at Danielswilliams.net. Connect with @DanSeanWilliamson Twitter.


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