5 Lessons Millennial Startups Can Learn from Jeff Bezos
Who would have thought that we will have an E-commerce venture like Amazon.com? The brain behind Amazon, its CEO, and Founder Jeff Bezos is one of the charismatic entrepreneurs presently.
So, in 1994, he quit D.E. Shaws to start his own online book store. A computer science graduate from Princeton University, Jeff started his career as a banker on The Waw and began his own virtual bookstore. He decided to name it Amazon, an online book retailer company which soon expanded and focused on more products and services.
By 1998, the site was famous for selling books online and it encouraged the users to post their own review of the books and offer discounts. Soon, it became an online virtual store for selling products like CDs, music and electronics and hardware.
Jeff is well known for his analytical as well as calculated methodical interpretations. He has certainly inspired millions of entrepreneurs and startups that started from nothing and is on the verge of becoming the richest man in the world.
According to Forbes’ list of the richest people in the world in 2019, Jeff leads the list with a net worth of $131 billion followed by Bill Gates and Warren Buffet with the net worth of $96.5 billion and $82.5 billion each.
Here’s a look at the lessons that every startup should learn from Bezos’ business philosophies:
Be Stubborn and Flexible
“We are stubborn on vision, we should be flexible on details”.
The key to a successful business is being stubborn in your vision and flexible with the details and tactics.
If you are stubborn with your goal and the objective, it is going to succeed one day. Most of the young entrepreneurs and startups fail because they stop experimenting and do not consider mixing innovation in their business.
An entrepreneur must have a never-give-up attitude and be willing to experiment and take risks. Customers love to experiment and businesses need innovation to survive in the market.
One of the things that the successful entrepreneurs have in common is the stubbornness to achieve a single objective. But the single objective doesn’t mean to follow the same path that leads to failure.
Keep your goal single but make sure you have different ways to reach the same goal. Find out the ways to solve a problem in different ways. Just in case plan A fails, you should have a plan B to execute.
A stubborn person with the right approach will be a great leader and it is also important to have a flexible approach. Let’s take an example of what I mean by the flexible approach.
“You can organize just about everything with ProofHub. Give it a try!”
“Amazon entered the market as an online book selling company. By then, Jeff had already planned about adding 20 more products to the category from music to toys. By 1997, Amazon billed itself as the “Earth’s Biggest Bookstore.”
Later, in 1998, Jeff announced that Amazon will broaden his store beyond books.”
It is also vital to figure out the right time to be flexible and the right time to be stubborn for your business.
Obsess about customers, not competitors
Jeff Bezos talks about another strategy which is much of practical use. Bezos says, “If you focus on the customer, the company is going to become more resilient.”
Jeff Bezos in his interview once said, “Start with the customers and work backward”. Most of the startups make the mistake of starting or launching the product and see if the customers would like them or not.
Some of the reputed startups like eCrowds and VoterTide shared on an Interview with CBINSIGHTS that, “We didn’t spend enough time talking with customers and we’re rolling out features that I thought were great, but we didn’t gather enough input from clients. We didn’t realize it until it was too late. It’s easy to get tricked into thinking your thing is cool. You have to pay attention to your customers and adapt to their needs.”
A millennial startup must attempt to do the opposite. They must first reach and understand their customers, their needs and problems and then start with the service or the products.
What it means that hiring a person who has a flexible mindset and the ability to look for the customers’ needs. Hiring someone with a self-serving mindset in the business would bring selfish behavior. This would lack the intent of performing among the team and the individuals will rather focus on their self goals.
Always keep in mind the needs and demands of the customers which makes the employees dependent on each other rather than being self-dependent and promotes the corporate culture.
“Life’s too short to hang out with people who aren’t productive.”
Bezos believes that what is best for the customers also turn out to be best for the businesses. In a conference, he said, “If we can arrange in such a way that our interests are aligned with our customers, then in the long term that will work out really well for customers.”
Let us take an example of how Amazon used its customers over its competitors to build a better business.
1. Amazon helped customers avoid duplicate orders
A great business or startup needs small customer satisfactions. Amazon noticed that the customers were mistakenly ordering products more than once. It decreased sales to a marginal difference but also led to customer loyalty. To gain the customer’s trust, Amazon started displaying the notifications of the orders that were already competing.
That’s what a millennial business needs — a customer’s loyalty more than a bogus sale. This increased customer loyalty.
2. Allow the competitors to advertise
Jeff took a surprising decision that created chaos in his company. Amazon decided to display the competitor’s price of the products they were selling on their own website.
Bezos stuck to this decision so that the customers can compare easily. He was also criticized by many but he had a stubborn intent and it even proved worthy for the customers.
This gave customers’ the choice and they could easily compare and look Amazon as the most reasonable in the market.
3. Getting the customers review
Amazon was the first venture which started customer reviews on products. The decision was a controversial one for Bezos. A lot of sellers were against this decision as that lead to negative reviews.
Jeff said in an Interview. “When we pioneered customer reviews, it was incredibly controversial. I got letters from publishers saying, ‘You don’t understand your business. You make money when you sell things. Takedown those negative customer reviews.’ We’ve never done anything of real value that wasn’t at least a little bit controversial when we did it. But if you want to be a pioneer, you have to be comfortable being misunderstood.”
Bezos hold off to the negative reviews and the approach like these made him a big name in the market. Amazon has also become a major resource for researching the products. The customers head to the reviews on Amazon before purchasing.
“A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well.”
The Two Pizza Rule
This is one of the major rules of business for Jeff Bezos. The two-pizza rule means that the team should be small enough to feed two pizzas. If the team can’t be fed with two pizzas, then it needs to be reduced in numbers. Bezos firmly believes that the team should only comprise from 5 to 7 people. As the team grows, the efficiency of the team becomes less to perform. That’s simply because holding on to a decision would waste more time.
That’s what the Amazon did when it started the Gold Box feature. It divided the larger teams into small enough that can be fed with two pizzas. With less counter-agreement and more decision making, the company saw a phenomenal rise in the business. This is even proving to be true as more and more small businesses are growing with their small and two pizza rules.
“You must be stubborn enough not to give up on your dreams and experiments. If you’re not flexible, you are going to pound your head against the wall and you won’t see a different solution to a problem you’re trying to solve.”
The simple rule that he followed was — the more the participants, longer it becomes to hold a meeting. Amazon still follows two pizza rule for various decisions and they say it still holds good for the small businesses. Larger companies assign these tasks to the small units which follow this rule. This gets the job done quickly and easily.
“Keep your large or small team on track. Try ProofHub”
Never Stop Experimenting
As Bezos quotes, “If you double the number of experiments you do per year you’re going to double your inventiveness.”
Experimenting is a way to create innovations in the market. Jeff is the most prominent example of how experimenting excels the startups in the market. Amazon started with an online book retailer and later experimented by selling various products online. It doesn’t stop here and continued with streaming movies and web series as well as launched the physical shops and developed a cloud computing business which is worth billions now.
Amazon is known for its innovations and experiments.
Starting as an online seller of books and then it became the largest marketplace for all the categories of products. Lately, Amazon started its video streaming channel and cloud computing platform perfectly defines the Jeff’s personality.
Jeff was even criticized for these innovations but all this led to a unique business solution. To stay competitive, there is something business must try. Automobile companies can try the concept cars or the food companies can try new foods and flavors, Tech companies experiment with the labs like the Google Labs. So, experimentation in business must always be the primary objective and be done without the fear of being failed.
“Entrepreneurs must be willing to be misunderstood for a long period of time.”
Amazon tried a few experiments to bring more sales:
- Advertisement on Television
When Amazon started years back, they tried the TV advertisements. They target the markets according to the products and looked for the demographics. Amazon displayed their first TV ad in Portland and Minneapolis which were their target locations. They tried and tested the ad campaigns for more than 16 month which is usually more than most of the companies experiment.
Amazon still runs the TV advertisement and they have noticed a change in sales from the ads.
2. Shipping Related Plans
Here Amazon works as a buffet system. Most of the customers hold themselves back because of the high shipping charges. This is where Amazon experimented bearing a gradual loss in the short term but it gained the customers’ loyalty in the longer run. This led to more sales and more profits for the company diminishing the loss in shipping.
Bezos has always been more obsessed about the customers and this is where Amazon wins. Just at the right time, it introduced the Amazon Prime membership which gained 4–5 million subscribers. The prime members were offered free shipping, two-day delivery and unlimited access to the videos and movies. The shipping companies are more curious to get the Amazon products delivered due to an increased customer base.
With a wide range of orders all over the world, they need not worry about the shipping providers and the charges.
Invent and Invest for the Long Term
Inventing and investing for the long term in the startups are major takeaways from Jeff’s philosophy. The invention is really important, be it any business. Jeff is a perfect leader and an amazing innovator. Amazon sells more than the dozens of products at present. Bezos is described as an innovator too. Be it the Blue Space Origin or the AWS hosting, airbag system for the phones or any service, Bezos seems determined for the invention.
With the invention, Bezos also had a vision for the long term. When Amazon started, they needed $1 million to get started but Jeff could get only $50K from 22 different investors. The investors were not much aware of the use of the internet but Jeff had a long vision and in the long term. If Amazon still makes a gigantic investment, they are criticized for being too risky.
It takes years to build a reputation for a brand and that’s what Jeff believes in. What the startups need to learn from Jeff is the tremendous amount of patience when the investment is for the long term. You will get criticized for expecting better returns but invest if it seems worthy. The perks of long term investment are good for the customers and also profitable for the company. A company can have more time on innovation and thus experiment for longer terms.
If we think long term, we can accomplish things that we couldn’t otherwise accomplish.”
Conclusion
Jeff has indeed been the most influential person for the startups and what’s more amazing is that he still is 51 years old. He still has a lot of years left and longer-term plans and innovations in the mind already.
Jeff is not merely associated with the Amazon but even larger innovations such as the Blue Origin and 10,000 year Clock.
Author Bio: Jitendra Vaswani is the founder of SchemaNinja WordPress Plugin, prior to SchemaNinja he is the founder of big internet marketing blog BloggersIdeas.com. He is a successful online marketer & award-winning, digital marketing consultant. He has been featured on HuffingtonPost, BusinessWorld, YourStory, Payoneer, Lifehacker & other leading publication as a successful blogger & digital marketer. Jitendra Vaswani is also a frequent speaker & having 5+ yrs experience in the Digital Marketing field. Check out his portfolio( jitendra.co).
