These rules helped Jeff Bezos grow Amazon. They’ll help you grow your business too.
Amazon has evolved from its humble beginnings in a Seattle garage to a trillion dollar company that is primed to expand into any industry it chooses.
Amazon has a variety of business segments that go well beyond its online retail store, but how did Amazon get this big?
A big part of Amazon’s success is the man at the helm, Jeff Bezos himself. Without great leadership, a company with great potential will flounder.
To answer that question, we’ll explore 5 rules Jeff Bezos lives by that contributed to Amazon’s massive success.
Rule #1: Do Your Research
Researching allows you to expose yourself to more opportunities before they become mainstream. Through his research, Jeff Bezos came across a stat in 1994 that the internet grew by 2300% in one year.
Bezos didn’t just luckily come across this stat. Before Amazon, he worked at a V.P. at the hedge fund D.E. Shaw. His role was to research new business opportunities revolving around the internet.
You could say it was a stroke of luck that Bezos did his research during the early 90s when the internet was nowhere near what it has become. However, it’s one thing to know the opportunity exists and something completely different to take action on it.
Research allows you to discover new ideas, and this has helped Amazon make strategic acquisitions that have bolstered its business model.
Rule #2: Start With A Minimum Viable Product
Have you ever wondered why Amazon started out as an online bookstore rather than sell clothing, computers, or practically anything else instead?
Books were in demand and there are millions of books to choose from…making it a big product category. The books were also easy to pack and didn’t cost as much to ship compared to computers and other items that took up more space.
Amazon started to gain momentum as an online bookstore. With the minimum viable product proven, Bezos eventually expanded Amazon’s product catalog to cover practically everything from A to Z.
Bezos even took this approach for his business meetings. In the early days of Amazon, Bezos conducted business meetings at a nearby Barnes & Noble. While it’s an ironic tidbit looking at how those two companies have changed, this approach was far smarter than buying office space for meetings in the early days.
Rule #3: Don’t Be Afraid To Take The Leap
Initially, Amazon wasn’t supposed to belong to Bezos exclusively. He pitched the idea of Amazon to the hedge fund he worked with and hoped they would get on board with the idea. The hedge fund rejected the idea. After some soul searching, Bezos decided to leave his job and forgo his bonus to start Amazon.
This was a big leap for Bezos to make as he had a solid V.P. role at a hedge fund, and he walked away from it. We all know from hindsight that Bezos made an incredible decision, but at the time he took the leap, he had no idea Amazon would become a trillion dollar company…let alone make up for his lost salary.
Bezos took the leap because he knew he wouldn’t have regrets about leaving his job in his 80s. In the same token, he knew he’d greatly regret it in his 80s if he missed out on the internet’s growth and didn’t take a shot at it.
Rule #4: Have A Long-Term Focus
When Amazon’s stock price cratered from $100 to under $10 during the dot-com era (based on current stock price which reflects splits), Bezos stood his ground.
Similarly, as Amazon started to turn the corner, Bezos invested all of the profits towards acquisitions and other segments within Amazon. Investors were upset that Bezos would forgo short-term profits to fully manifest long-term objectives, but the investments paid off.
Amazon now owns Whole Foods, Twitch, Amazon Web Services, and a variety of other businesses. None of these were part of the radar when Amazon first started. Bezos kept the long-term health and expansion of the company in mind, and that influenced decisions he made in the moment.
Long-term is where the magic happens, but you have to do the short-term actions each day that lead to your big vision.
Rule #5: Don’t Listen To The Critics
Investors worried about how Bezos’s cash burn weren’t the only critics. Amazon was mockingly called Amazon.bomb during the dot-com crash and now faces increased legal scrutiny.
Rather than let the critics dictate Bezos’s life, he continues to move forward with Amazon. The more successful you become, the more critics you will attract. Bezos chooses to ignore them because listening to critics is unproductive.
Criticism is different from meaningful feedback. The Amazon.bomb critique is very different from a suggestion on how to enhance the customer experience.
Those are the 5 rules that helped Jeff Bezos grow Amazon. Utilizing these 5 rules in your business will help increase the sustainability and overall growth of your business. If you have any suggestions for growing a business, I’d love to hear them in the comments.