Today, Amazon is the largest eCommerce company in the world. It sells almost anything and everything. It is hard to believe that all of this has been accomplished within just 25 years through the vision of one man named Jeff Bezos!
There are 4 key reasons for the success of Amazon. Go through this article and think about how any of these 4 key lessons can be applied to your life!
Lesson 1 – Data is everything
When Amazon was launched in 1994 as an online bookstore, there were thousands of websites on the internet already. Most of these internet companies and websites have shut down. But why did Amazon grow and succeed?
One of the reasons Amazon was able to grow so quickly was because of its Data Collection and analysis. Jeff Bezos believed that having Data is Everything. So, it tracked which book a visitor was searching for, from which location, at what time of the day, what items they bought and what they left in the cart, etc. Based on this they came out with a sophisticated mechanism of predicting books very similar to what the customer had bought. They kept suggesting those books to that customer, which they often ended up buying as well!
This may seem straightforward with the technology of today, but back then it was truly a new concept!
This led to Amazon’s explosive growth and within a few years, it had become one of the biggest and most famous internet companies of the time.
You also have to understand that collecting and analyzing data is everything. Data helps you maximize your chances of getting more customers or maintaining good relationships with other stakeholders. Data on your performance is also important as it tells you where you stand currently and in what direction you have to go!
Lesson 2. To Succeed More, You Have to Enable Others to Succeed
Jeff Bezos understood that just selling books online or even selling other items on its own would put a limit to the growth Amazon could experience.
He had to find a way in which Amazon’s success could be scaled up massively. To do this he invited sellers of almost all consumer goods, whether they were large or small to sell their products via Amazon and get access to their customer base, which at that time itself had crossed 12 Million paying customers!
Selling via Amazon led to many small businesses getting huge visibility and sales. They started posting record profits and Amazon made massive money from commissions. So, the success of other large and small businesses via the Amazon platform led to its own revenues accelerating greatly!
Another example of this is Amazon Web Services or AWS.
Amazon had built strong internal cloud computing systems for its own use, but then after interacting with a lot of its major B2B customers they found that a lot of them were having problems related to their own technology setups.
It was then that they launched Amazon Web Services that provided cost-effective cloud computing and storage services to some of the largest as well as smallest businesses! This delivered so much value to other companies that AWS is now a multi-billion dollar business itself!
In fact, Netflix, Amazon’s biggest competitor in web streaming uses Amazon Web Services to store its own content! This is the sort of trust they have built up!
Remember, massive success is never achieved by only making yourself succeed, you have to make others around you succeed, whether it is your team, your customers, or your family!
Lesson 3 – Don’t be afraid to experiment.
The biggest game-changer in Amazon’s profitability came with the introduction of Amazon Prime. For the first time ever, for a small yearly fee, Amazon guaranteed free two-day delivery. It was a risky bet and would only work if enough people signed up.
Luckily, it worked and became one of the most profitable decisions for Amazon to date! It became the world’s largest subscription service ever!
After reading about so many successful initiatives of Amazon, you may think that Bezos was lucky with one decision after another or never made any mistakes.
But in truth, he admitted that he had made far more wrong decisions that had cost billions of dollars than he had made right ones!
Bezos said that when his right decisions worked, they easily recouped losses of all the wrong decisions! He said that if you have a 10 percent chance of success at something which has the potential of massive returns, you should take that chance. Because even though you may be wrong 9 times, the one time you are right will make up for everything!
Lesson 4 – Focus on The Long Term.
Around 1997, Amazon listed itself on the stock market. This was just around the time that the famous dot-com bubble was building up and people were investing in just about anything tech-related.
Amazon too benefited from it and its stock price rocketed. But when the dot-com bubble burst in 2000, it bankrupted most new tech companies. Amazon was one of the very few survivors but its stock price fell down massively.
Many investors were thinking of pulling out of Amazon because not only had the stock price plummeted but it had not yet turned a profit. But Bezos told his shareholders that his focus was on the long term and not just quarterly results. He assured them that if they stuck by Amazon in the long term, they would 100x their wealth.
Not everyone believed in him and the stock price fell by almost 90 percent. Most of these investors were sure that Amazon would also shut down.
However, some investors decided to stick with the company because they believed in the long-term vision of Bezos.
Over the next twenty years, the investors who believed in Amazon from the beginning had their wealth multiply not 100x but 1200 times! In the process, Bezos himself became the world’s richest man.
This was not just because of luck. In the short term, Bezos had experienced several situations which could be called mistakes or simply bad luck, but by constantly practicing habits and principles for the long term, he ensured the eventual success of Amazon.
Remember, that short-term problem may arise for anyone, but those who persevere and keep their long-term vision intact, almost always emerge as winners!
I hope this article has been informative and inspiring for you. If you remember and apply the four lessons that we have learned from Bezos’s life, great things await you in life as well!