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Amazon Letter to Shareholders 25 years ago (MUST READ!)

Updated: Sep 11, 2022



SUMMARY
In a 1997 letter to shareholders, Jeff Bezos laid out his LONG term plans for the Amazon business, the year it IPO'd. He did what no Mission Statement could do - he explained the strategy of the business and why it would influence the major decisions Amazon would make for the next 25 years.

Amazon is playing a long game to achieve market leadership.
Amazon will make strategic investment decisions, not focus on short-term profits.
Amazon will obsess over customers.
Amazon will be frugal - passing savings on to customers.
Amazon will focus on growth.

Why is this letter so important?


There are few companies in the world today that have had as big an impact (positive & negative) on the world as Amazon. But was that luck or by design?


If you read this letter - and I would strongly encourage you to - it's clear that Amazon's success is entirely by design. Jeff Bezos laid out a strategy that would steer the business for 25 years and we can still see that strategy in action today.


I'm not going to rewrite or summarize the letter - it's only 3 pages. But here are a couple of takeaways for me.

  1. Playing a long game: Jeff clearly explains that Amazon will prioritize growth and market leadership over short-term profits. They did and they continue to do so. And it's worked, much to the frustration of Wall Street - but the growth speaks for itself.

  2. Obsessing over customers: People are fickle with little or no loyalty toward brands. Why should they be loyal? Brands are there to serve them. Amazon understood this from Day 1 and set out to always impress customers so they would come back over and over again. And we do.

  3. Infrastructure to support growth: 25 years ago Jeff talked about the need to have infrastructure in place to support their already epic growth. That infrastructure was primarily people and real estate. In the last 25 years, the definition of Infrastructure for Amazon has changed and obviously now includes AWS. Which was built out of an internal need for speed and simplicity of spinning up server infrastructure to support dev and production solutions. The core capability of "Infrastructure" is still a key focus for Amazon - but its definition is different showing business agility.

I hope you enjoy reading this 25 year old 3 page letter.

amzn_shareholder-letter-20072
.pdf
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