Jeff Bezos on why a great product matters more than great marketing in the Internet era

“On the Internet, word-of-mouth is more powerful than it has ever been before. On the Internet, everybody buys ink by the barrel. Everybody has an opinion and they shares it—on blogs, on social networking sites, by email”

Bezos argues in this Charlie Rose interview from 2012 that this is a very powerful and positive phenomenon for society:

“In the past, if you were making a product, the right business strategy—not necessarily the right thing for society—was to put 70% of your attention, energy, and dollars into shouting about the product. And 30% into building a great product. So you could win with a mediocre product if you were a good enough marketer. And I think that is getting harder to do.”

With the Internet, the balance of power is shifting away from companies and toward consumers. And the right way to respond to this if you’re a company is to say:

“I’m going to put the vast majority of my energy, attention, and dollars into building a great product or service. And put a smaller amount into shouting about it—marketing. Because I know if I build a great product or service, my customers will tell each other.”

This will require some patience and a long-term attitude. But it should ultimately be better for both companies and consumers. As Bezos puts it:

“We’re moving into a world where the truth is more on the surface. And I think that’s a very healthy and good thing.”

Source: Investing Principle “Jeff Bezos: Conversation with Charlie Rose - November 2012”