“Some people are just better at rolling with the punches.”

1. Customer obsession: there are many ways to centre a business, each can be successful - competitor obsession (close following, replicating quickly), technology obsession, product obsession, business model obsession. Amazon’s choice: customer obsession.

2. Willingness to innovate and pioneer: customer obsession isn’t just about listening to customers, it’s inventing on their behalf - your customer may not even know what they want, it’s your job to invent it

3. Be long-term oriented: think in 5-7 year time frames (“Today, I’m working on a financial quarter in 2020… not next quarter, that was fully-baked about three years ago”) – this affects how you spend your time, energy, how you plan

   • long-term thinking has to be deliberate, we want quick results by nature - ever heard of a get rich slow scheme?

4. Experiment more. What worries Jeff? That Amazon will lose the three above principles (lose its customer obsessiveness, or become short-term orientated, or lose its long-term focus); failure and invention are inseparable.

   • To invent you need to experiment. If you know in advance it’s going to work, it’s not an experiment!

   • If you have a 10% chance of a 100x return, you should take that shot every time. You’ll still be wrong 9 out of 10 times.

   • If you swing for the fences, you’ll hit more home runs, but you’ll strike out more. But in baseball you’re capped at four runs. In business, every once in a while, you hit so hard you get a thousand runs.

5. One problem with young entrepreneurs: they like to talk about how disruptive their business plan is going to be. Invention is not disruptive. Only customer adoption is disruptive. We’ve invented a lot of things - that customers did not care about at all! They were not disruptive. Only when customers like the new way, can anything become disruptive. Hence: customer obsession.

   • So if someone says their idea is disruptive, the question to ask them is: why are customers going to adopt this?

6. “I’ve noticed all overnight successes take about ten years.”

7. Failure: there is a type of failure you don’t want, where you have an operating history and you know what you’re doing, and you just screw it up; that’s just a screw up – e.g. fulfillment centre technology, by now, can’t fail. Bad execution is not the right kind of failure. The right kind of failure is failure when trying to innovate.

8. Identify your big ideas, there should only be 2 or 3 of them. Then enforce great execution against these big ideas. Usually the big ideas are incredibly easy to identify.

   • Amazon’s 3 big ideas:

     1. Low prices

     2. Fast delivery

     3. Vast selection

   • These should not change over time e.g. at no point ever in the future will customers ever want 1. Higher prices, 2. Slower delivery, 3. Less selection.

   • But executing against these big ideas, that’s the hard part - how do we always get costs a little lower? how do we always deliver more quickly?

   • These principles apply to other sectors as well, e.g. government - find the big ideas that will always still be true, invest in them.

9. AI, machine learning, natural language understanding, machine vision problems: these will help every business and every institution.