Jeff Bezos: “Missionaries build better products”

In the clip below, Jeff tells Charlie Rose that Amazon’s mission is to be “Earth’s most customer-centric company.”

When asked what that means, Jeff shares the example:

“Right after World War II, Akio Morita—the guy who founded Sony—set as the mission for Sony that they were going to make Japan known for quality. You have to remember, this was a time when Japan was known for cheap, copycat products. And Morita didn’t say ‘we’re going to make Sony known for quality’. He said ‘we’re going to make Japan known for quality.’ He chose a mission for Sony that was bigger than Sony.”

And Jeff wanted to do the same with Amazon:

“We want other companies to look at Amazon and see us as a standard-bearer for obsessive focus on the customer—as opposed to obsessive focus on the competitor.”

He cites this as one of the reasons Amazon takes such a long-term view—he argues you can’t really do the right thing for customers if you’re short-term oriented. This mindset also a key factor in their success versus Walmart:

“Our profitability is not our customer’s problem. We don’t take the point of view that we’re going to price products at a particular margin for ourselves… We’re going to price products competitively. And if that means on that product we lose money, that’s ok because we need to take care of the customer to earn trust. And we’ll figure it out over time… But we’re not going to make customers pay for our inefficiencies.”

As an example of the company’s long-term thinking, Jeff shares that most businesses Amazon starts have either no impact on financials for the first 5-7 years or a negative impact.

“It’s an outcome of customer obsession.”

In 1997, George Colony of Forrester Research called the company “Amazon.toast.” Jeff knew that every employee—and perhaps more importantly: every employee’s mother—had read the article. So he called an all-hands meeting with all 150 employees at the time and told the team:

“You should wake up terrified every morning. But don’t be worried about our competitors because they’re never going to send us any money anyway. Let’s be worried about our customers and stay heads-down focused.”

He tells Charlie:

“[Our competitors] can succeed fabulously and it won’t stop us from succeeding. These retail markets are huge…. Sometimes people think of business as a sporting event: there’s a winner and a loser. But it usually isn’t. Most often, industries succeed—I can tell you, e-commerce is succeeding. And the way we think about it: nobody else has to fail for us to do well… I have a list of 50 competitors we could walk through all over the world doing different things… We’re going to pay attention to those competitors, but we’re not going to obsess over them. We’re going to obsess over customers… And it’s not just a business for us, it’s a mission. And missionaries build better products.”

Full video: Investing Principle “Jeff Bezos: Conversation with Charlie Rose - November 2012” (Nov 2012)

P.S. We’ve put together a YouTube playlist with every Jeff Bezos insight we’ve ever shared. You can watch it here: "Best startup advice from Jeff Bezos"