Eight Powerful Life and Business Principles Billionaire Jeff Bezos Lives By

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Eight Powerful Life and Business Principles Billionaire Jeff Bezos Lives By

How a multibillionaire is more relatable to your life than you think.

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No matter what you think about Jeff Bezos and Amazon, there is no denying he and his organization has fundamentally changed the world.

For better or worse, the way we live, work and buy have been changed by his little brown packages with a tick on the box.

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Hate or love it. Amazon is here to stay.

I am a person who is idea agnostic. I don’t care where the idea comes from so long as they work.

I’ll test ideas on their merits, not their origins.

To create anything as big and valuable as Amazon, requires exceptional vision, flawless execution and relentless drive that most people don’t have.

I want to explore how the business and life principles that Jeff Bezos lives by can help you live your life or create your own business.

#1 A Relentless Focus On This.

In almost every Amazon shareholder letter issued since 1997, the focus on the long-term is always mentioned.

Even at the expense of short-term stock prices. Jeff Bezos has made it no secret that he is in this for the long term, not just to make money.

That’s why Amazon refuses to pay dividends on its stocks.

That’s why Amazon can survive fluctuations in the market and downturns such as the dot.com bubble.

Even when he partners with or acquires other organizations he wants to find out whether the founders are “missionaries” or “mercenaries”.

Put another way: Is this person committed to achieving impact or padding their bank account?

As Jeff Bezos put it in a 2007 shareholder address, “missionaries build better products.”

Something made to achieve a large impact will be a lot different from an organization set up to make a quick buck.

It’s the same difference between buying from an owner-occupied family house and an investor who just wants to flip the property for profit.

2 How To Manage Life’s Most Difficult Decisions

Prior to going all in to Amazon, Jeff Bezos worked at a status job with a great salary. He had access to some of the best minds at the hedge fund D.E Shaw and Co., run by David Shaw.

When he noticed the 2300% growth of the internet he wanted to jump feet first and start Amazon.

He was talked out of it by many people, including David Shaw himself:

“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 felt conflicted and confused. David Shaw convinced him to take 48 hours to think about it.

We all know what happens next, but instead of blindly following his passion, he thought about how he could minimize his regret.

In his mind visualized his 80-year-old self, and pictured what he would regret most: not starting Amazon or giving up this high-paying job.

He knew that he wouldn’t be able to forgive himself if he never tried to launch Amazon. And he knew he could always go back to that job if he really wanted to.

Bezos reflected:

“When I’m eighty, I want to have minimized the number of regrets that I have in my life, and most of our regrets are acts of omission, things we didn’t try, the path untraveled. Those are the things that haunt us.”

#3 Don’t Just Provide Value To The Customer, Do This Too.

Every single upgrade or change Amazon makes maps back to the customer experience and nothing else.

Even if upgrades to the customer experience came at the cost of short-term profits for Amazon.

For instance, Amazon proactively provides refunds for poor service on their streaming platforms, long delivery times or changes in pricing when customers pre-order products.

Most customers never ask for a refund, but they receive it anyways.

This builds trust in the Amazon brand and gives customers a great feeling when purchasing from Amazon.

Amazon doesn’t just to create value via their services but they also want to build trust and loyalty with the Amazon brand.

Value can be created in a single transaction. But trust and loyalty can take years to build and even less time to break.

#4 Focus On Doing One Hard Thing Really Well.

Amazon is a behemoth.

But it didn’t start like that.

Jeff Bezos had a singular focus on selling books before gradually expanding into bigger and more diverse markets slowly.

He prioritized books because of their inherent quality of being a non-perishable commodity. Books don’t have an expiry date and they come in relatively consistent formats.

He focused on having a bigger range of books and then making the entire range of books cheaper than physical book stores.

Once he conquered the book world, he slowly moved into music, video, electronics, clothing and eventually consumables.

This process took years and years of experimenting and iterating.

We often fail because we try to do too much too soon.

How often do New Year’s resolutions fail because we are trying to change too much of our lives making the change unsustainable?

#5 Always Think In First Principles.

“No customer ever asked Amazon to create the Prime membership program, but it sure turns out they wanted it, and I could give you many such examples” — Jeff Bezos 2016 Shareholder Newsletter
While Amazon is customer-centric, it does not always believe that the customer is always right.

As Henry Ford once said, if you ask the people what they wanted, they would have said “faster horses”.

Jeff Bezos takes a first-principles approach when acquiring or starting any new business arm within Amazon.

Any business idea must have:

Potential to return capital to the customer
Grow to scale
A market that is currently being underserved
It is why Amazon resisted moving into a physical retail store until it could differentiate itself enough through Amazon Go.

“We have been very interested in physical stores for years, but I always said we were only interested in having a differentiated offering, something that’s not me-too, because that space — physical stores — is so well served.” — Jeff Bezos in Invent and Wander
How is Amazon’s physical retail store different? They got rid of the thing we hate the most: the checkout counter. In Amazon Go, you can just pick up your item and walk out.

Similarly, when optimizing Amazon’s operations, any changes must follow these first principles:

Reduce prices for customers
Create a bigger selection of products
Enable faster and more reliable delivery
You won’t ever hear someone saying: I want to pay higher prices, with fewer options and wait a long time to get what I ordered.

First-principles allow you to not overthink or over-engineer solutions.

This type of thinking is powerful when you can regularly apply it to your job, business or personal life.

Think about it: as a senior executive, what do you really get paid to do? You get paid to make a small number of high-quality decisions. — Jeff Bezos in Invent and Wander

#6 How To Make Difficult Hiring Decisions

Whenever hiring decisions at Amazon need to be made, Jeff Bezos asks the following questions of any potential candidate:

Will you admire this person?
Will this person raise the average level of effectiveness of the group they’re joining?
Along what dimension will this person be a superstar?
If you’re not hiring someone who won’t add more value to your team, why are you working with them at all?

#7 Always Having A “Day 1” Mentality

“Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”

— Jeff Bezos 2016 Shareholder Newsletter
Even when Amazon become a billionaire dollar company, Jeff Bezos never stopped emphasizing the need to keep focusing like it was Day 1 of the company.

In his shareholder letters in 2008, 2009 and 2010, he ended each letter with: “it is still Day 1”.

Quite remarkable for a company of that size to keep its innovative and experimental culture.

The point is of Bezos’ Day 1 message is to never stop learning.

The point at which your company stops experimenting is the day the company dies.

“I have always believed that if we commit ourselves to maintain 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 hear of a small one” — Jeff Bezos
The point at which you stop learning is the day you die. That’s why so many people are dead at 30 but aren’t buried till 80.

If you can maintain a “Day 1” mentality or a lifelong student mentality, there is no stopping how far you’ll go.

#8 Living A Balanced Life

Mornings are important.

“I like to putter in the morning. I get up early. I go to bed early. I like to read the newspaper. I like to have coffee. I like to have breakfast with my kids before they go to school. So my puttering time is very important to me.” — Jeff Bezos in Invent and Wander
Sleep is important.

“I prioritize sleep unless I’m traveling in different time zones. Sometimes getting eight hours of sleep is impossible, but I am very focused on it, and I need eight hours. I think better. I have more energy. My mood is better.” — Jeff Bezos in Invent and Wander
Making decisions is important.

“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 in Invent and Wander

Summary:

While we all won’t be billionaires or build companies as large as Amazon, we can apply the life and business principles that have made Jeff Bezos enormously successful.

Your context might be different, but the approach can be the same.

Apply these principles and your life just might change for the better.

CONTRIBUTED BY Michael Lim

Read More: Do Not Start Investing Until You Learn This

Read More: Money Comes From Mindset — How to “Think and Grow Rich”

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