The Best Business Book Ever
Jeff Bezos on high standards, acting fast and making bold bets.
“Whenever you see a successful business, someone once made a courageous decision.” — Peter Drucker
Hello, and welcome to Abandoned Curiosities. Today, let’s talk business.
At the age of thirty, Jeff Bezos walked away from a well-paying job into a garage to found his startup, understanding fully that it might not work. “It really was a difficult choice, but ultimately I had to give it a shot. I suspected I would always be haunted by a decision to not try at all,” says Bezos.
He explains, “When you’re eighty and reflecting back, you want to have minimized the number of regrets you have in your life, and most of our regrets are acts of omission, things we didn’t try, the path untraveled. Those are the things that haunt us.”
Today, Amazon is the world’s largest online retailer. And it has not only revolutionized retail but with offerings such as AWS and Prime, among others, disrupted multiple industries along the way.
Over the years, I’ve read every single one of Bezos’s letters to Amazon shareholders. And while it’s not even a real book. I’d still call it the best business book ever.
Today, I want to share with you three takeaways from these letters. That’s it. Just three key takeaways — ideas, lessons, mental models, call them whatever you want. Also, there’s no reason to not apply these learnings to areas other than business.
1. Set realistic expectations
To achieve greatness in any field, it’s imperative to have high standards. But what do you need to achieve high standards in a particular field?
“Recognition and scope,” writes Bezos. “First, you have to be able to recognize what good looks like in that domain. Second, you must have realistic expectations for how hard it should be (how much work it will take) to achieve that result — the scope.”
Bezos argues that a good piece of writing, say an article, will take at least a week or more to write — and edit and review and rewrite. It simply can’t be done in a few hours. Similarly, you can’t master a handstand in two weeks when, in reality, it takes about six months of daily practice. If you think you could do it in two weeks, you are just going to end up quitting. Or turn in an inadequate piece of writing.
2. Make decisions fast
“Some decisions are consequential and irreversible — one-way doors — and these decisions must be made methodically, carefully, slowly, with great deliberation and consultation. If you walk through and don’t like what you see on the other side, you can’t get back to where you were before. You can call these Type 1 decisions.”
“But most decisions aren’t like that — they are changeable, reversible — they’re two-way doors. If you’ve made a suboptimal Type 2 decision, you don’t have to live with the consequences for that long. You can re-open the door and go back through.”
Bezos further adds, “Most decisions should be made with around 70% of the information you wish you had. If you wait for 90%, you’re being slow.”
“Either way, you need to be good at quickly recognizing and correcting bad decisions. If you’re good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.”
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3. Swing for the fences
“If you swing for the fences, you’re going to strike out a lot, but you’re also going to hit some home runs. The difference between baseball and business, however, is that baseball has a truncated outcome distribution. When you swing, no matter how well you connect with the ball, the most runs you can get is four. In business, every once in a while, when you step up to the plate, you can score one thousand runs.”
“This long-tailed distribution of returns is why it’s important to be bold.”
And that’s all. But in case you’d like to read still more, in the past, I condensed these letters into a short ebook you can get here. It’s $8, but for this week only, you can get it for free. All you have to do is both like this post and leave a comment, and I’ll send you an email with a code you can use to download the book for free.
Thanks for reading.
Until next time,
Thanks for a great insight! Would love to know more and make notes for the new year!