Jeff Bezos If youre good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure. Without escalation, the default dispute resolution mechanism for this scenario is exhaustion. Were in the middle of an obvious one right now: machine learning and artificial intelligence. Were in the middle of an obvious one right now: machine learning and artificial intelligence. And weve also made Amazons higher level services available in a convenient form. They are not aligned. Bezos makes a comparison of the different sentiments between Day 1 of starting a company and Day 2. First, never use a one-size-fits-all decision-making process. As companies get larger and more complex, theres a tendency to manage to proxies. Jeff Bezos: Day 1 versus Day Much more to come. During his tenure as executive editor at The Washington Post, Martin Baron ran into a persistent problem. Im interested in the question, how do you fend off Day 2? Jeff's letters is a non-commercial production with Preet Anand as its I wrote about the 1,000 person army Jeff has created, just for Alexa [2]. 1001 and 1030). Dan joined Amazon in 2006 to launch the companys first direct-to-customer digital content offerings. I dont know the whole answer, but I may know bits of it. Day 1 is about being constantly curious, nimble, and experimental. During some of his gatherings, several Post employees expressed concerns about Mr. Ryans missteps and the direction of the paper. Now Hes Paying Attention to It Again. Full text: In annual shareholder letter, Jeff Bezos explains why it Jeff Bezos' 1997 shareholder letter is still relevant. Its Day 1 forever because Day 2 is death. Also known as the 2016 Letter to Shareholders, Jeff Bezos sketched out a philosophy that he calls Day 1 and Day 2. Reporters were classified as direct employees and editors as indirect and his preference was to keep the indirect numbers down. Contrast this to a Day 2 mentality: as a company grows over time, it needs to adjust its approach to effectively manage the organization as it scales. 2000: In lean times, build a cash moat. 7 MIN READ. Jeff Bezos Mr. Bezos has told confidants that the new endeavor, which is being developed with help from the former New York magazine editor Adam Moss, is an opportunity to reach readers who may have tuned out the news, according to four people familiar with its development. And most important of all, are you delighting customers? In an interview with The Times last month, Mr. Ryan said hed had a lot of conversations with Mr. Bezos about the new organization. Benjamin Mullin is a media reporter for The Times, covering the major companies behind news and entertainment. How do you keep the vitality of Day 1, even inside a large organization? Fifty-five percent of beta testers report being satisfied with this feature. If you are a founder, please read Jeff Bezoss letter to Amazon shareholders. To be sure, this kind of decline would happen in extreme slow motion. Day 2 is stasis. Mr. Bezos has been having regular meetings with Mr. Shipley to discuss the project. And so for Bezos, its always Day 1 at Amazon. Jeff Bezos had purchased The Post for The word 'customer' occurs 25 times. Jeff Bezos The big decision set up hundreds of smaller decisions, many of which needed to be escalated to the senior team. Bezos Day 1 Letter | Cem Sertoglu He had accused Cameron Barr, her top deputy, of leaking information about The Posts operations to the press, according to three people familiar with his comments, and had sought his ouster. To do so, a company needs to zealously guard against Day 2 mentalities: focusing on short term goals or process instead of customer-delighting outcomes; allowing hierarchy and bureaucracy to spread rather than empowering autonomy and rapid experimentation and decision-making; fearing failure and entrenching around existing capabilities rather than thinking big about what can be. Reference ID: 0.8decc017.1690280367.1b24b86c. An established company might harvest Day 2 for decades, but the final result would still come. For more information, please see the SECs Web Site Privacy and Security Policy. To allow for equitable access to all users, SEC reserves the right to limit requests originating from undeclared automated tools. How does an Organization keep Day 1s culture? The Day One name references one of Bezos' most well-known concepts, which he mentioned in his first investor letter in 1997. The saying Day 1 has always been a mantra at Amazon since Bezos letter to shareholders in 1997, in which he spelled out why the companys focus on the long term That is up from 47% in the first survey. Thats hard to interpret and could unintentionally mislead. About Jeff Bezos. Thank you for your interest in the U.S. Securities and Exchange Commission. Through a spokesperson, Mr. Ryan denied accusing Mr. Barr of leaking information and trying to get rid of him. Heres a starter pack of essentials for Day 1 defense: customer obsession, a skeptical view of proxies, the eager adoption of external trends, and high-velocity decision making. Because of our emphasis on the long term, we may make Followed by irrelevance. "Followed by irrelevance. A recent Security and Exchange Commission (SEC) filing, Amazon Exhibit 99.1 statement [1] is really quite interesting. I dont know the whole answer, but I may know bits of it. Many decisions are reversible, two-way doors. What Is The Competitive Advantage Of LLMs Like ChatGPT For Your Business? Ms. Stonesifer who is not taking a salary for the job has already begun to put her stamp on The Post. It requires executives to bravely set the example from the top, creating the right culture and environment to nurture experimentation and be accepting of failure. Day 2 is stasis. But we have to choose it., Daniel Slater,Worldwide Lead, Culture of Innovation, AWS. How do you keep the vitality of Day 1, even inside a large organization? In the Exec Chair role, I intend to focus my energies and attention on A high-quality problem, but a problem. I disagree and commit all the time. Bezos says the company needs a better vision for how it creates value for employees . The process becomes the proxy for the result you want. The 'Day 1' mentality outlined in his first letter to shareholders continues to power behind Amazon's success today. But in my view, obsessive customer focus is by far the most protective of Day 1 vitality. Modern machine learning techniques now allow us to do the same for tasks where describing the precise rules is much harder. Mr. Ryans exit is seen among employees as a victory for Ms. Buzbee, whose relations with The Posts newsroom have occasionally been strained since she joined from The Associated Press two years ago. Being inspired by your customers needs is also likely to open yourself up to innovate in many more areas than you may have otherwise. Amazon For best practices on efficiently downloading information from SEC.gov, including the latest EDGAR filings, visit sec.gov/developer. Once the rate of requests has dropped below the threshold for 10 minutes, the user may resume accessing content on SEC.gov. As always, I attach a copy of our original 1997 letter. Your request has been identified as part of a network of automated tools outside of the acceptable policy and will be managed until action is taken to declare your traffic. Organizations can take steps to ward off stasis, and luckily, Bezos provided us with four possible prescriptions that will help Amazon, or any organization, avoid Day 2s peril: Science-fiction writer, Isaac Asimov, describes the fall of an empire, which is merely a massive organization, in the book Foundation. Go for quick escalation instead its better. Third, use the phrase disagree and commit. This phrase will save a lot of time. During his tenure as executive editor at The Washington Post, Martin Baron ran into a persistent problem. We dont know all the answers, but here are some thoughts. 2016 Letter to shareowners. What are the techniques and tactics? WebAs always, I attach a copy of our original 1997 letter. If you have conviction on a particular direction even though theres no consensus, its helpful to say, Look, I know we disagree on this but will you gamble with me on it? Listen in as AWS and customer leaders discuss best practices, lessons, and transformative thinking. Other changes that are planned at The Post include a rebooting of the 54-year-old Style section in September. WebAmazon.com passed many milestones in 1997: by year-end, we had served more than 1.5 million customers, yielding 838% revenue growth to $147.8 million, and extended our market leadership despite aggressive competitive entry. Jeff Bezos When we decided to invite third party sellers to compete directly against us on our own product detail pages that was a big one. If a healthy culture full of innovation, life and vitality were easy, we wouldnt be talking about it. This idea has become a bit of folklore inside of Amazon. Theres a sense of hope, which we havent had for a long time, said Sally Quinn, a longtime Post journalist and the widow of Ben Bradlee, a former top editor of The Post. A one-way door decision is one that has significant and often irrevocable consequencesbuilding a fulfillment or data center is an example of a decision that requires a lot of capital expenditure, planning, resources, and thus requires deep and careful analysis. To be sure, this kind of decline would happen in extreme slow motion. The driving goals are not just words, but fully activated concepts used inside of Amazon everyday. With Just 1 Word, Jeff Bezos Shared a Brutal Truth That Most A Decade Ago, Jeff Bezos Bought a Newspaper. But you, the product or service owner, must understand the customer, have a vision, and love the offering. Another example: market research and customer surveys can become proxies for customers something thats especially dangerous when youre inventing and designing products. Jeff Bezos Followed by death." He occupied a building called Day 1, named as a reminder that the company should always be in Day 1 mode. 1/ Jeff Bezos is still Jeff Bezos because Its ALWAYS Day 1. Curated resources for executives leading the digital transformation. So, have you settled only for decision quality, or are you mindful of decision velocity too? Every year, Bezos republishes his original 1997 letter to shareholders. Changing Healthcare - A Platform Approach Using Data & AI, Healthcare And Data - How To Measure Quality, Three Trends Of Transformation: How AI & Value-Based Care (VBC) Will Drive Transformation Of Self-Insured Healthcare. Jeff Bezos 2021 Letter to Shareholders. By digging into their experiences and frustrations and deeply understanding the context behind them, we avoid inventing in isolation, or producing a solution in search of a customer. All of which grinds decision-making to a halt. For more information, contact opendata@sec.gov. It has been going on, as I have said, for centuries, and it is too majestic and massive a movement to stop. - Isaac Asimov, Foundation, published a 4-page letter to shareholders. But Mr. Bezos, whose representatives kept an eye on the budget, didnt believe The Post needed to add many new editors to accomplish that task. We dont know all the answers, but here are some thoughts. Good inventors and designers deeply understand their customer. You stop looking at outcomes and just make sure youre doing the process right. She previously worked as an editor and reporter at Bloomberg and News Corporation Australia. He does a great job of distilling why its so difficult to build a great company. As Bezos wrote in his 2016 Letter to Shareholders: So, have you settled only for decision quality, or are you mindful of decision velocity too? That is up from 47% in the first survey. Thats hard to interpret and could unintentionally mislead. Jeff Bezos releases final letter to Amazon shareholders - CNBC Keeping teams small also empowers them with the autonomy and speed they need to act as owners for their product and its customers. Were working on it.). 1 In his final letter to shareholders, Amazon CEO Jeff Bezos on Thursday laid out a broad vision for the future of the company, committing to extend Amazons famous Every year, Bezos republishes his original 1997 letter to shareholders. The danger is that as this happens, decision making can slow down, and the company can become less agile, moving further and further away from the customer as it rotates focus towards internal challenges rather than external customer-centric innovation. Are you falling prey to proxies, or do they serve you? Historys lesson here seems to be that companies will decline, given enough time. July 22, 2023. in News. Inside AWS, were excited to lower the costs and barriers to machine learning and AI so organizations of all sizes can take advantage of these advanced techniques. This volume starts with the classic and first 1997 letter and ends with the Fiscal Year 2020 letter which came out in April 2021. Listen to executive leaders and AWS Enterprise Strategists, all former C-Suite, discuss their digital transformation journeys. We strive to deeply understand customers and work backwards from their pain points to rapidly develop innovations that create meaningful solutions in their lives. This week, were talking about Jeff Bezos shareholder letter. 1 Are the worlds trends tailwinds for you? Jeff wrote: Another example: market research and customer surveys can become proxies for customers something thats especially dangerous when youre inventing and designing products. It is very, This is Day 1 for the Internet, Bezos wrote, and, if we execute well, for Amazon.com. Then, beta testing and research can help you find your blind spots. Leaders start with the customer and work backwards, it states. Thats a question I just got at our most recent all-hands meeting. And most important of all, are you delighting customers? Using our pre-packaged versions of popular deep learning frameworks running on P2 compute instances (optimized for this workload), customers are already developing powerful systems ranging everywhere from early disease detection to increasing crop yields. In companies that have experienced growth, the tendency is to build processes to help manage a business at scale and beyond line of sight. But much of what we do with machine learning happens beneath the surface. The senior team at Amazon is determined to keep our decision-making velocity high. Jeff Bezoss farewell letter as CEO of WebAt a recent Amazon all hands meeting, Jeff was asked "Jeff, what does Day 2 look like?" Its always worth asking, do we own the process or does the process own us? Followed by death. Hearkening back to his first-ever shareholder letter from 1997, Bezos, in 2016, reminded investors that for Once a year, in his letter to Amazon shareholders, Jeff Bezos gives us all a glimpse into his business world view and management philosophy. If you read through all the shareholder letters that Bezos meticulously wrote over the past 22 years (1997-2018), the phrase "Day 1" appeared an amazing 22 times, with striking consistency. Jeff Bezos on Why Successful Companies Need to Stay in Day One Learn more about the concept of Amazons two-pizza teams, As companies grow, CEOs are often challenged with how to scale their leadership across teams, geographies and initiatives. And that is why it is always Day 1." Much more to come. 1 Listen. Second, most decisions should probably be made with somewhere around 70% of the information you wish you had. Jeff Bezos A customer-obsessed culture best creates the conditions where all of that can happen. Bezoss letter contains helpful ideas for not only businesses, but any organization (e.g. A common example is process as proxy. Followed by irrelevance. There will be many elements, multiple paths, and many traps. Jeff wrote that Day 2 companies do actually make good decisions, but the problem is that they make them slowly. To be sure, this kind of decline would happen in extreme slow motion. In that case, the process becomes "the thing". jeff-bezos-amazon-shareholder-letters-1997_2020 Download. Day 1 companies are healthy and full of life. Watch this space. Jeffs attention to the Day 1 concept is credited to much of Amazons success. It remains Day 1. I wrote back right away with I disagree and commit and hope it becomes the most watched thing weve ever made. Consider how much slower this decision cycle would have been if the team had actually had to convince me rather than simply get my commitment. By legend, the mandate is as follows: 1. Even when they dont yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf. The letter compares two types of organizational cultures (Day 1 and Day 2), with natures biological cycle of growth and decline acting as the business metaphor. Day 2 is stasis. The fall of Empire [or large social organization], gentlemen, is a massive thing, however, and not easily fought. A recent report from the USA Inquirer revealed that based on his daily income and current wealth, Jeff Bezos makes around USD$321 million per day, or roughly USD$3,715 per Thats a question I just got at our most recent all-hands meeting. It is dictated by a rising bureaucracy, a receding initiative, a freezing of caste, a damming of curiositya hundred other factors. There are many aspects of maintaining an agile, Day 1 start-up mentality. Sun Valley 2023 Attendees: Bob Iger, Jeff Bezos, Sam He stated We still struggle to keep Echo in stock, despite our best efforts. It now has around 2.5 million. Please declare your traffic by updating your user agent to include company specific information. But this is Day 1 for the Internet and, if we execute well, for Amazon.com. However, it isnt all bad news. And thatis why it is Followed by death. In a Day 2 company, you might find its the second. Day 2 companies are plagued by stasis; they soon find themselves irrelevant, followed by a slow death. I wrote about this in more detail in last years letter. He wrote that start-ups have no problem making high-quality, high-velocity decisions, but large organizations struggle with doing the same. Day 2 companies let stasis to take hold; they soon find themselves irrelevant, followed by a slow death. I spend time thinking about this topic. ", To make that happen, the Day 1 process has a "disagree and commit system for employees. Gulp. Over the past decades computers have broadly automated tasks that programmers could describe with clear rules and algorithms. ", Powering Innovation and Speed with Amazons Two-Pizza Teams, Leading and Innovating with Leadership Principles. Jeff Bezos Calls Amazon a Day 1 Company in New Shareholder The Post was also bleeding talent. At Amazon, weve been engaged in the practical application of machine learning for many years now. And so, thats why its always Day 1 at Amazon. Jeff Bezos Jeff Bezos Staying in Day 1 requires you to experiment patiently, accept failures, plant seeds, protect saplings, and double down when you see customer delight. This idea came about in the very early days of Amazon. We live in a world of constant, unabated change driven by rapid technological innovation, shifting regulation and governance demands, and even unplanned external upheavals like COVID-19. But as a company experiences growth, they also tend to become more complex. It is critical for the business to adapt quickly to rapidly changing external environments and to the ever-evolving needs of their customers by innovating on their behalf. I am not even sure Amazons succeeding there, as its also tough to tell. What is Jeff Bezos's Day 1 philosophy? Jeff Bezos' original letter to shareholders is reprinted from Amazon's 1997 Annual Report. Disagree and commit? By the time youre at this point, no one can know the answer for sure, and youll probably get a quick yes. Yesterdays wow quickly becomes todays ordinary. Customers can provide endless ideas and inspiration to innovate, and their needs and desires will drive you to invent on their behalf. To avoid setting off alarms up the line, my deputies and I would strip the word editor from proposed new positions whenever possible, Mr. Baron writes. The Honorable Bill Nelson Administrator They will foster curiosity. Theyre undoubtedly difficult to achieve and maintain. Jeff Bezos founded e-commerce giant Amazon in 1994 out of his Seattle garage. Day 1 is a start-up mentality of excitement and ambition which fights challenges, embraces change, employs quick decision making and, most importantly, has an obsession with its customer. No amount of discussion, no number of meetings will resolve that deep misalignment. Current guidelines limit users to a total of no more than 10 requests per second, regardless of the number of machines used to submit requests. If youre the boss, you should do this too. Also known as the 2016 Letter to Shareholders, Jeff Bezos sketched out a philosophy that he calls Day 1 and Day 2. And given that this team has already brought home 11 Emmys, 6 Golden Globes, and 3 Oscars, Im just glad they let me in the room at all! As always, I attach a copy of our original 1997 letter. This volume starts with the classic and first 1997 letter and ends with the Fiscal Year 2020 letter which In a Day 2 company, you might find its the second.. https://www.nytimes.com/2023/07/22/business/media/jeff-bezos-washington-post.html. They work vigorously to earn and keep customer trust. Its always worth asking, do we own the process or does the process own us? Something he had been thinking quite profoundly in the last Jeff Bezos had purchased The Post for $250 million in 2013, less than a year after Mr. Baron had taken over. These days, Mr. Bezos knows more about the news business. The process becomes the proxy for the result you want. Much of it, she said, stemmed from missteps by the newspapers chief business executive, Mr. Ryan, according to two people familiar with her remarks. Day 1 has become something of a legend. They can be accessed with simple API calls no machine learning expertise required. If Amazon maintains Day 1s culture, the future is bright. Amazon Staff, I attach a copy of our original 1997 letter, A small eastern Oregon high school is investing big in robotics with help from AWS, How to watch this years Rolling Loud Miami festival live on Prime Video and Twitch, Our commitment to the responsible use of AI, How to win a $5 Amazon.com Gift Card, just by signing up for the Amazon News newsletter, Amazon named among the most innovative, trusted brands by Axios Harris Poll and 3 other recent polls, 8 key announcements from Amazons NewFront 2023, including new Amazon Freevee Originals and another season of Amazon Music Live, Everything you need to know about Amazon Business, one of Amazons fastest-growing ventures, CEO Andy Jassys 2022 Letter to Shareholders, 4 insights from Amazons latest Brand Protection Report, 3 ways Amazon supports its customers every day, One Medical joins Amazon to make it easier for people to get and stay healthier, Amazon ranks No.1 for value and selection in the latest American Customer Satisfaction Index (ACSI). This idea came about in the very early days He helped launch the Kindle device and Kindles global content marketplaces, as well as Amazons self-publishing service, Kindle Direct Publishing (KDP). By . And is better suited to lead innovation at the forefront. Machine learning drives our algorithms for demand forecasting, product search ranking, product and deals recommendations, merchandising placements, fraud detection, translations, and much more. Key theme is how to avoid atrophy as a business, such We invent before we have to.". YupTheres no way to guarantee a Day 1s culture, which Bezos believes increases the odds of organizational relevance. In a letter, Bezos said he would stay engaged in important Amazon initiatives but would pivot towards philanthropic initiatives, including his Day One Fund and Bezos Earth Fund, and other business ventures in space exploration On July 11, she and Mr. Ryan hired Alex MacCallum, a veteran of The Times and CNN, to be The Posts chief revenue officer, and named Vineet Khosla as the newspapers chief technology officer. Im excited to announce that this Q3 Ill transition to Executive Chair of the Amazon Board and Andy Jassy will become CEO. And that is why it is always Day 1. To avoid Day 2 culture, a company must be hyper-vigilant, remained focused on its customers, and stave off practices that hamper its ability to rapidly innovate. You can be competitor focused, you can be product focused, you can be technology focused, you can be business model focused, and there are more. That changed in January, after Ms. Buzbee spoke with Mr. Bezos and conveyed an urgent message: Morale was low at The Post. Such a question cant have a simple answer. When we see a two-way door decision, and have enough evidence and reason to believe it could provide a benefit for customers, we simply walk through it. Jeff Bezos has announced that he would step down as the chief executive officer of Amazon in the third quarter of 2021. Your innovations are not constrained by how you can accomplish them in your current environment, but rather by how big they can be and how much they can delight your customers.