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The backward logic of a buyer’s market

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in Leaders & Managers

Jeff Bezos, who is famous for his crazy laugh and sturdy optimism, gins up strategies a little differently at Here’s what he thinks about the future and his customers:

  • On the future: Usually, leaders ask what’s going to change in the coming decade. Bezos thinks about what’s going to stay the same.

    That’s “because you can really spin up flywheels around those things,” he says. “All the energy you invest in them today will still be paying dividends 10 years from now.”

    On the other hand, if you base your strategy on what’s going to change— technologies, say, or competitors— those will change fast, and you’ll have to change fast, too.

    So what’s not going to change? Bezos advises looking at things customers care about: selection, low prices and fast delivery.
  • On customers: He obsesses about them. Bezos knows, for instance, that Amazon customers are convenience-oriented (as opposed to the gamesmanship found on eBay), so, “We make it really, really easy to buy things.”

    So easy that Amazon puts its competitors’ products on the same web page as its own products. Despite anxiety that competitors would steal Amazon’s sales, Bezos used an old Warren Buffett story to settle the issue.

    Buffett, the financier, once said he had three boxes on his desk: an inbox, an outbox and too hard. When you get a question that’s too hard and you can’t decide what to do, ask: “What’s better for the customer?”

    Bezos concluded that more information, more selection and lower prices were better for the customer. Sure, he’d take hits for empowering competitors and dampening his own sales. (“Maybe you don’t understand your business,” one critic wrote. “You make money when you sell things.”) But he looked at it differently. Instead of selling, he thought, Amazon would make money by helping customers decide.
So far, he’s been right.

—Adapted from “The Institutional Yes,” Julia Kirby and Thomas Stewart, Harvard Business Review.

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