I’ve made billions of dollars of failures at Amazon.com. Literally billions of dollars of failures. You might remember Pets.com or Kosmo.com. It was like getting a root canal with no anesthesia. None of those things are fun. But they also don’t matter.
What really matters is, companies that don’t continue to experiment, companies that don’t embrace failure, they eventually get in a desperate position where the only thing they can do is a Hail Mary bet at the very end of their corporate existence. Whereas companies that are making bets all along, even big bets, but not bet-the-company bets, prevail. I don’t believe in bet-the-company bets. That’s when you’re desperate. That’s the last thing you can do.
~ Jeff Bezos
According to Fast Company, on Thursday, April 28th, Amazon CEO Jeff Bezos made $6 billion in 20 minutes, after reported earnings beat expectations. Most people know Amazon as an online retailer but it’s collection of cloud computing services, Amazon Web Services or AWS, is Amazon’s new profit engine. The unit’s $1.9 billion in operating profit in 2015 was close to the $2.8 billion operating profit of the entire $99 billion retail business even though AWS constitutes only about 10% of Amazon’s overall revenues.
It is important to understand that AWS started off as a bit of an industry joke. How could an upstart bookseller possibly compete with real data specialists or persuade companies to outsource data storage? Yet that’s what has happened. In Jeff Bezo’s 2016 annual letter to shareholders, he wrote:
This year, Amazon became the fastest company ever to reach $100 billion in annual sales. Also this year, Amazon Web Services is reaching $10 billion in annual sales … doing so at a pace even faster than Amazon achieved that milestone….
Most large organizations embrace the idea of invention, but are not willing to suffer the string of failed experiments necessary to get there. Outsized returns often come from betting against conventional wisdom, and conventional wisdom is usually right….
AWS, Marketplace and Prime are all examples of bold bets at Amazon that worked, and we’re fortunate to have those three big pillars.
The amazing growth of AWS shows the importance of continual experimentation and big bets but more importantly it shows the importance of process. In his letter he also wrote, “Twenty years ago, I was driving boxes to the post office in my Chevy Blazer and dreaming of a forklift,” and “no matter how good an entrepreneur you are, you’re not going to build an all-composite 787 in your garage startup.”
Jeff Bezos started Amazon by offering a real service to real customers in an industry that was primed for disruption. Amazon sold its first book in July 1995 and within a month, Amazon sold books in all 50 states and in over 45 countries. Within two months, Amazon’s sales were over to $20,000 a week.
You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.
~ Steve Jobs
Have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.
~ Steve Jobs