Introduction
When one is randomly asked to mention among the wealthiest people on earth right now, one name that will be among the dominant list is Jeff Bezos. Further, when asked where they make their online purchases, a vast majority will cite Amazon. Jeff Bezos is the founder of Amazon, the leading online purchase and delivery store worldwide. Amazon started as a book-selling website that offered discounts on books. Years later, Amazon became a leading online store, prompting Jeff Bezos to write a book, Invent and Wonder, widely inspired by Amazon’s success.
Jeff Bezos’s book, Invent, and Wonder, is divided into two parts. The first part contains the letters by Jeff Bezos to all Amazon stakeholders every April throughout the years from 1997 to 2019. The second part contains transcripts of the Interviews that Jeff Bezos has made (Isaacson & Bezos, 2020). Therefore, the book targets everyone interested in understanding how Amazon became successful and those interested in the economy. The book contains the decisions and the processes that a successful innovator and a business person followed and can therefore be used by business students with the same vision of achieving success. Further, the book documents the history of Amazon, and we get to understand how the company grew to become the success that we witness right now.
Summary
Invent and Wonder by Jeff Bezos seeks to explain how Amazon became successful through its business practices through the documentation of company documents by Jeff Bezos. In part one of the book, The Shareholder Letters, Jeff Bezos shows the steps taken by Amazon throughout its twenty-three years of operation up to 2019 (Isaacson & Bezos, 2020).
The letters are written by Jeff Bezos to every stakeholder in Amazon, describing what the company has done and what the company intends to do. Jeff Bezos further advises other companies that want to be successful through the letters about his company. Among the key issues that Jeff Bezos highlights and stresses through every note that he writes is putting the customer before the business, thus customer satisfaction, having a long-term view about the companies, innovations, taking risks, and using quality tools for business.
The second part of the book includes the transcripts by Jeff Bezos. The transcripts originate from numerous interviews and talks that Bezos has given throughout many years (Isaacson & Bezos, 2020). Each address has a lesson that either relates to the success of his business or to the personal life he intends to pass. Jeff Bezos encourages people to follow their dreams, have a vision, and draw from their life lessons to become successful. Jeff further explains how he founded Amazon, what inspired him, and some of his relationships (Isaacson & Bezos, 2020). The second part of the book covers broad concepts and numerous topics, as each transcript recorded has its title with a passage that it intends to pass.
Jeff Bezos gives several business practices and theories that other businesses can follow to succeed like Amazon. This book report will discuss five such pieces of advice or the requirements for companies to be successful based on the Book by Jeff Bezos. The five tips that Jeff Bezos puts across both in his letters to the shareholders and in the transcripts from his interviews are; focusing on the long term, heavily focusing on the customer, being innovative in the market, and making big decisions focusing on the employees.
Economic Concepts, Theories, and Models
Focusing on the Customer
In all the letters that Jeff Bezos writes, and in almost all the transcripts of Jeff Bezos, the importance of the customer for the success of Amazon is highlighted. Jeff Bezos values the customer, and every decision or investment he makes for the company aims to address the customer’s needs (Isaacson & Bezos, 2020). One of the letters by Jeff Bezos is titled obsessions. He begins the letter by explaining the new milestones they have made, the unique shops they have opened, and the new openings they have had. Jeff Bezos goes ahead and narrates that the milestones are all meant for the customer (Isaacson & Bezos, 2020). Jeff Bezos intends to simplify the customer’s life by bringing products and services closer to the customers.
Jeff Bezos also says that Amazon cares about the customers receiving the goods and the services and wants to ensure that the customers receive a wide selection of goods and services. Every year, Amazon reports that it has added a new piece of items to its inventory, and the total amount of components that the company can have totals up to hundreds of thousands (Isaacson & Bezos, 2020). Through the increased selections, Amazon company recorded the highest score for customer satisfaction in 2001. Amazon recorded a score of 80%, which is not only the highest score for an online company but the highest score for any service industry globally (Isaacson & Bezos, 2020). Bezos attributes the high score to the customer-oriented nature of the company.
Jeff Bezos also takes notes of every customer complaint. He talks about his widely known email address [email protected], and how it helps him deal with customer complaints (Isaacson & Bezos, 2020). He says that most customers report unfulfilled orders, and when he can, he has his Amazon team look up to the company’s mistakes. Upon identifying the error, the company amicably solves it for the customer (Isaacson & Bezos, 2020). The company maintains the customer’s trust and can correct cascading issues from different cases. Taking customer complaints into consideration, therefore, helps the company develop further and increases customer satisfaction.
Focusing on the Future
From the transcripts by Jeff Bezos, he was always a visionary man. Jeff Bezos knows that Amazon is not a company that will die out soon, and therefore every time, he looks up ways to ensure the company maintains longevity and thus maintains its future. Most letters by Jeff Bezos are about the future of Amazon. He constantly reminds the shareholders, especially in his first letters, about the company’s future (Isaacson & Bezos, 2020). Bezos says that the company’s decisions and every other activity that the company is involved in all translate to ensuring that it registers a bright future.
Throughout the letters by Jeff Bezos, we note that the company is better placed than it was in the previous year (Isaacson & Bezos, 2020). The company also sets goals for the coming years and more specific goals for the consequent year during the distribution of the letters by Jeff Bezos. The goal-setting reminds the company of the future requirements that they promise to achieve. In the first letter, particularly, Jeff Bezos names it, “It’s all about the long term.” The letter shows that Jeff Bezos understood that Amazon was performing well and that selling shares would only mean that people are banking on the company’s future (Isaacson & Bezos, 2020). Thus the company needed to fulfill the desires of its shareholders and could only do so by assuring the shareholders of longevity and a prosperous future.
Innovation
The concept of Amazon itself was an innovation by a young Jeff Bezos. No one was selling anything online when Jeff started Amazon. Jeff Bezos says that he has wanted to be an innovator all his life, and when he got the idea of creating Amazon, he decided to quit his job and focus on his innovation (Isaacson & Bezos, 2020). Initially, Amazon started as a book-selling online store. Jeff Bezos wanted to create a store that would get many books from a single place.
Jeff Bezos notes that internet growth in the year he thought about Amazon was at 2300% (Isaacson & Bezos, 2020). Jeff Bezos had never seen such growth anywhere, even on other rapid technological advancements at the time. Jeff’s innovation, however, was a well-taught one. He taught that he could grow with the way, and he thus deployed his new idea, which garnered the market’s attention and consequently gathered the market’s trust. As the Internet grew, Amazon’s customer base also grew (Isaacson & Bezos, 2020). Thus, through innovation, Jeff Bezos created something new that grew along with the fastest growing element at the time: the Internet.
The success that Amazon has enjoyed, however, has not only been due to a single innovation. Amazon has continued innovating new products and new ways of doing business, and in the process, has managed to acquire more customers and retain its existing customers. In 2007, Amazon introduced Kindle. Kindle was a portable book reading machine that read books in soft copy (Isaacson & Bezos, 2020). Kindle was advantageous since it allowed customers to access and download any books offered by Amazon within only sixty seconds. Further, Kindle could store up to 200 books and was thus something convenient for book lovers (Isaacson & Bezos, 2020). The innovation by Amazon increased profits for the company and increased customer satisfaction with its services.
Amazon company also expanded from the book’s sale and now also involved the sale of other products. When Jeff Bezos saw that Amazon was successful, he once emailed a number of its customers. He asked what each customer would want them also to deliver. Most customers that responded typically said that they wanted the company to deliver what they wanted at the time (Isaacson & Bezos, 2020). With the study he had just concluded, Jeff Bezos thought he could sell everything else through Amazon. Through his innovative mind, Jeff Bezos created a successful online store where he could sell anything. Right now, virtually anything can be purchased at Amazon, thanks to the innovation of Jeff Bezos.
Innovation also needs not be from the requirements of the customer. Businesses can think about something that might help people but do not know about them. In his 2018 letter to the shareowners, Jeff Bezos claims that no one asked for Amazon Web Services (AWS), which Amazon developed to offer cloud computing and API services to users and companies (Isaacson & Bezos, 2020). However, when Amazon deployed AWS, multiple individuals and companies realized they needed the services and subscribed to them. Major companies and a considerable number of individuals are now using Amazon Web Services for their daily activities, thanks to the innovation of Amazon.
Also, Amazon keeps up with the external trends in business. According to Jeff Bezos, external trends are always advertised, and they can never be hidden, as they are talked about y the media and companies themselves. Businesses can also adopt Such trends and innovations. For example, Amazon Web Services (AWS) and Axela by Amazon were inspired by external trends (Isaacson & Bezos, 2020). Thus, when companies keep watch of the directions, they ought to reap every available opportunity just like Amazon does, through expanding its services and consequently consumer base.
Decision Making
As companies grow, the decision-making processes become slower. Slow decision-making in companies slows down growth in the company (Isaacson & Bezos, 2020). Thus, to maintain growth, companies need to develop processes that will ensure their decision-making is fast. However, different types of decisions exist for companies. According to Jeff Bezos, the different types of decisions are variety one and type two decisions.
Type one decisions involve the most critical decisions, and they should be made slowly and with a lot of consultation with mathematical and qualitative data (Isaacson & Bezos, 2020). However, most decisions made for Amazon are not typed one but are instead type two decisions. Amazon is a fast-moving company, and thus decisions have to be made fast. Also, for type two decisions, one can go back and change them, unlike type one decisions that are immediately executed.
As Amazon grew, the need for decision-making about the company also grew. The company needed to make good decisions that would be feasible and prevent losses but encourage profit. Also, the findings will aim to ensure customer satisfaction and thus register a success for the company when it is looking to keep customers. Jeff Bezos says that he is a type 1 decision-maker since decisions taken by Amazon at his level are primarily high-end and can be inflexible (Isaacson & Bezos, 2020). He thus needs to take a lot of time before making a particular decision. However, Jeff Bezos acknowledges that most decisions need to be made fast, and they thus become type two decisions. However, businesses should make the decisions from a good perspective to keep the company working and afloat.
An example of a decision that Amazon made which improved its score among the customers, in the end, is the establishment of Amazon Prime. Amazon Prime is an additional service for Amazon customers that offers the customers additional services which are unavailable to other Amazon customers, such as free shipping (Isaacson & Bezos, 2020). At first, Amazon Prime was expensive for Amazon, and it took up more funds than it generated. However, the company decided to keep it, noting that it will bring much more to the company in the future. Soon, more people paid for the subscription, and Amazon started raking in profits from the service. Thus, decision-making is essential for the deployment and the establishment of effective services or products for businesses.
Further, the personal decision-making by Jeff Bezos during his acquisition of The Washington Post magazine and after investment shows the importance of good decision-making for a company. Jeff Bezos was reluctant to take up the Washington Post because he did not know anything about magazines (Isaacson & Bezos, 2020). However, when he realized that newspapers could be distributed through the Internet, which was an area he is well-versed with, he decided to take it up. Jeff Bezos took advantage of the free distribution of newspapers on the Internet and reduced the costs of online newspapers (Isaacson & Bezos, 2020). The decision by Jeff Bezos led to low prices but an increased number of sales, which was even higher than the sales made by the company previously. Thus, sound decisions can lead to a company growing profits.
Employees
The human resource sector is crucial in every company. In his 1988 letter to the shareowners, Jeff Bezos describes companies’ questions while looking for employees. The three questions that Jeff Bezos suggests are; do you admire this person? Will they raise the average level of effectiveness of the group they are entering? And what other dimension do they bring to the job besides skills and experience? Jeff Bezos addresses that Amazon will only hire the best-qualified workers that will help in uplifting the company. Such hiring procedures enable Amazon to have a credible human resources workforce, one of the single most important elements for the company’s success.
The Amazon company also seeks to ensure that every employee’s needs are met. The company does so by providing that it has employee empowerment programs set up. The employee empowerment program is highlighted in the 2013 letter by Jeff Bezos to the shareowners (Isaacson & Bezos, 2020). Two primary methods of empowering employees are done at Amazon. One approach is prepaying school fees for Amazon employees (Isaacson & Bezos, 2020). Amazon understands that is not always the final working center for its employees. Thus, in offering choice for the employees, they contribute to paying fees to broaden their skills while studying at the same time. That way, employees feel supported by the company and work even more challenging.
Another method of employee empowerment that Amazon adopts is Pay to Quit. Amazon pays employees between $2000 to $5000 to quit depending on the number of years worked (Isaacson & Bezos, 2020). However, Amazon always wishes that their employees do not take up the offer. The employees are further presented with free will to think about what they want. Amazon lets employees that want to quit go, as they do not want workers that are unhappy working for them (Isaacson & Bezos, 2020). Keeping unhappy employees at the workplace is unhealthy not only for the company but also for the employees.
Conclusion
Jeff Bezos Invent and Wonder successfully captures the rise of Amazon and carefully notes the essential tips on how a company can also be successful. Jeff Bezos publicly writes letters to the Amazon shareowners. In the letters, he discusses the methods adopted by the company and the plans that the company has for the next years. Further, Invent and Wonder are made up of two parts. The first part contains the letters he wrote to the shareholders, while the second includes a transcript of the interviews and talks. The approach by Jeff Bezos and the arguments that he makes throughout the book is superbly made, as readers easily understand him and witness his success.
Jeff Bezos relies on critical topics including focusing on employees, customers, the future, decision-making, and innovations. The issues are evident since they are derived from his publications in the book. The topics are also well covered through examples and credible data from a world-leading company, Amazon. Therefore, if every company borrows tips from the publications by Jeff Bezos in his book Invent and Wonder, they will be successful.
References
Isaacson, W., & Bezos, J. (2020). Invent and Wander: The Collected Writings of Jeff Bezos (1st ed.). Harvard Business Review Press.