Brilliant advice for anyone running a business

If you want to build a successful, sustainable business, don’t ask yourself what could change in the next ten years that could affect your company.

Instead, ask yourself what won’t change, and then put all your energy and effort into those things.

That’s the advice of Amazon CEO Jeff Bezos, highlighted in an interesting post about Uber’s big ambitions by venture capitalist Bill Gurley.

Bezos suggests that you should build a business strategy around the things you know are stable in time — like that customers will always prefer lower prices — and then invest heavily in ensuring you are providing those things and improving your delivery of them all the time.

“When you have something that you know is true, even over the long term, you can afford to put a lot of energy into it,” Bezos says.

To help it achieve lower prices, Uber has poured time and money into the back-end routing algorithms of its app and an intelligence system for demand prediction, congestion prediction, supply matching, supply positioning, smart dispatch, and dynamic pricing, Gurley points out. It has launched UberPool — a ride-sharing option that Gurley argues has become one of the company’s defining initiatives.

As Uber hustles away on making UberPool a success, it is perfectly achieving Bezos’ strategy. It is making a big investment in something that will never change (people wanting to pay less for transportation).

The things Bezos predicted would always be true for Amazon customers is that they’d always want lower prices and speedy shipping. So, the company has spent the last 11 years investing in those things— often forgoing profits to do so.

To work towards those things, Amazon has spent billions on building fulfillment and sortation centers all over the US and the world, a topic which came up on its fourth quarter earnings call on Thursday.

“What’s happened over the course of last several years, with all the fulfillment centers that we have added, is we have actually gotten selection closer to customers,” CFO Tom Szkutak said. “And so that’s helped us from a delivery speed standpoint. And it’s helped us from a cost standpoint too —in terms of transportation cost — because of being closer to our customers.”

It’s been a long, un-ending effort, but worth-it, since customers will always value Amazon’s fast delivery options.

Here’s the full Bezos quote, via Bill Gurley:

“I very frequently get the question: ‘What’s going to change in the next 10 years?’ And that is a very interesting question; it’s a very common one. I almost never get the question: ‘What’s not going to change in the next 10 years?’ And I submit to you that that second question is actually the more important of the two — because you can build a business strategy around the things that are stable in time. … [I]n our retail business, we know that customers want low prices, and I know that’s going to be true 10 years from now. They want fast delivery; they want vast selection. It’s impossible to imagine a future 10 years from now where a customer comes up and says, ‘Jeff I love Amazon; I just wish the prices were a little higher,’ [or] ‘I love Amazon; I just wish you’d deliver a little more slowly.’ Impossible. And so the effort we put into those things, spinning those things up, we know the energy we put into it today will still be paying off dividends for our customers 10 years from now. When you have something that you know is true, even over the long term, you can afford to put a lot of energy into it.”

Read more: http://uk.businessinsider.com/jeff-bezos-brilliant-advice-for-anyone-running-a-business-2015-1

Related Posts

  • 70
    “If you want something new, you have to stop doing something old” ― Peter F. Drucker A strategy is a plan of action to achieve a major aim and future result. It requires commitment because making change is difficult. To describe what’s involved, Peter Drucker said: “Strategic planning is the continuous…
    Tags: strategy, business, success
  • 62
    Let’s start with the premise that Twitch, the video-game watching network, is the next ESPN – you know, the jewel in Disney’s crown that, by itself, is worth $50.8 billion. Like ESPN, Twitch is about live competition, and, like ESPN, Twitch does exceptionally well in the highly desirable young male demographic.1 Obviously…
    Tags: amazon, company, success
  • 62
    With the simple flick of its finger, Angry Birds was the launchpad for the multi-billion pound mobile games industry we see today, but while many see it as a an overnight success story for Finnish startup Rovio, the truth is somewhat different. Speaking to IBTimes UK at Rovio's colourful headquarters…
    Tags: company, success, time, will, true, years, spent
  • 60
    January 30, 2015: In their seminal 1994 book Built to Last: Successful Habits of Visionary Companies, Jim Collins and Jerry Poras coined the term BHAG (pronounced BEE-hag) — an acronym that stands for “Big Hairy AudaciousGoal.” Collins and Porras suggest that the very best companies set an audacious, very long-term…
    Tags: uber, company, uberpool, lower, prices, success
  • 59
    I’m looking forward to sharing posts from time to time about things I’ve learned in my career at Microsoft and the Gates Foundation. (I also post frequently on my blog.) Last month, I went to Omaha for the annual Berkshire Hathaway shareholders meeting. It’s always a lot of fun, and…
    Tags: business, time, lot, things, success