Behold the 49 Most Important Words in Jeff Bezos’s Just Released Amazon Shareholder Letter
The funniest line is what the Amazon CEO wrote about how third-party sellers are kicking our first party butt.” But this other section is more important.
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The first item in Jeff Bezos's 2019 letter to Amazon shareholders, which the company released earlier today, is about the stunning rate of growth that independent third-party sellers have had on Amazon's platform over the last 20 years.
But there are two sentences just a bit lower in the letter that I keep reading over and over.
First, the third-party sellers, which Bezos says are "kicking our first party butt." Starting in 1999 and 2000, Bezos says that 3 percent of merchandise sold on Amazon came from third-party sellers.
It's grown steadily since then -- up to 58 percent last year -- an annual compound rate of 52 percent that now means $160 billion worth of other people's products are being sold on the platform.
And in discussing what made that happen, Bezos penned two sentences -- 49 words -- that should inspire you, whether you're an entrepreneur working to make the world a better place or someone who just dreams about being one.
"Just how radical"
The context is that Bezos credits the growth of these third-party sales to the development of two Amazon features that people take for granted now, namely "Fulfillment by Amazon" and the Prime membership program. As he writes:
With the success of these two programs now so well established, it's difficult for most people to fully appreciate today just how radical those two offerings were at the time we launched them.
We invested in both of these programs at significant financial risk and after much internal debate.
There are some other headline-worthy takeaways from the letter. But I keep coming back to this brief recounting of how the idea of even having these products was inevitable-;and by no means guaranteed of success.
We're constantly encouraged only to show the "wins," in our lives now, especially on the Internet.
We optimize our LinkedIn profiles. People manufacture artificial lives on Instagram. There are entire industries dedicated to renting high fashion clothes and expensive cars, so that people can pretend to be more financially successful than they really are.
That's why I think it's so important to keep in mind that almost every person or company that achieves success does so on top of a tower of failures.
They risk, they fail, they risk, they fail, they risk, they fail.
Maybe if they're lucky, the eventually succeed. And everyone pretends it was inevitable and easy.
An appetite for failure and "wandering"
There's a continual internet meme -- I see a lot of it on Twitter -- where people joke that they're old enough to remember things that didn't happen very long ago.
Well, I suspect that most people reading this article are old enough to remember a time before Amazon.
If so, maybe you're like me -- and you even remember the time when it seemed that Amazon would never make a profit, or that people were fools for investing in it.
Maybe you can remember a time when Amazon was just an online bookstore, and people debated whether it could ever compete with Barnes and Noble or Borders. (Maybe you remember Borders.)
Bezos keeps coming back to this theme: how things that succeed seem inevitable in retrospect, but they're actually the result of "[i]ntuition, curiosity, and the power of wandering."
Take Amazon Web Services, which now has millions of customers; if you take Bezos's description at face value, nobody ever "asked for AWS. No one. Turns out the world was in fact ready and hungry for an offering like AWS but didn't know it."
All of this means that you have to have an appetite for failure -- which in turn means both the courage to try new things, and the courage to quit when you wind up on the wrong road.
It never ends
I've come to realize in my four decades on this planet that the vast majority of people, and of companies for that matter, never really win -- but they never really lose, either.
Honestly, they never really get into the game.
They don't innovate. They don't seek out their passions. They don't take a risk and stand up on stage, let themselves look like fools.
They don't get up the courage to ask the boy out. They take a risk don't call up the girl they dated way back when and say, "I always loved you and we're not getting any younger."
I know it's unusual to take life lessons from an annual shareholder letter. I suspect it's more likely that I've been thinking of these kinds of things lately, and thus I'm more likely to find that kind of meaning in Bezos's missive.
Even now, as Amazon is one of the world's most valuable companies, Bezos warns investors that to keep it there, he expects Amazon to fail at some things massively in the future.
And so, whether you love Amazon or hate it; whether you work there or don't think anyone should; whether you invested in the company way back when or missed out -- remember this one key point.
It wasn't inevitable. And neither is your future, either.