World’s richest man, 57, gives up top job
Could you be as rich as Jeff Bezos one day? The world’s wealthiest man has shown ingenuity and ruthlessness as the head of Amazon, but there has also been an element of luck in his success.
Yesterday’s announcement sent shock waves through the business world. After running Amazon for almost 30 years, Jeff Bezos is to step down as chief executive. The company is on a roll, with its profits almost doubling in 2020, and Bezos’s personal fortune standing at £136bn. But later this year he will hand day-to-day control to his long-time colleague Andy Jassy.
The move, he said in a letter to Amazon’s 1.3 million employees, will give him “the time and energy I need to focus on the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and my other passions. I've never had more energy, and this isn't about retiring. I'm super passionate about the impact I think these organisations can have.”
Not everyone was pleased, including critics of Amazon. "This abusive, predatory monopoly still needs a complete overhaul," said the consumer-rights group Public Citizen. But others took the opportunity to consider Bezos’s rules for success. Here they are:
Keep it simple. Look for ways of simplifying every process, and make your organisation as streamlined as possible. Bezos believes in the “two-pizza team” – meaning that no team should be so big that you cannot feed it with two pizzas.
Do not fear failure. Nobody succeeds without making some mistakes along the way: the important thing is to take risks. Amazon spent £124m on creating its Fire Phone, which flopped – but the voice-recognition technology developed for it became the inspiration for Echo smart speakers and Alexa. Bezos has created a “Just Do It” award for employees who have tried and failed, as well as those who have succeeded.
Be adaptable. “People who are right a lot change their mind,” says Bezos. If you have a really good idea, follow it with determination, and do not compromise to suit other people. But be flexible about how you achieve your vision.
Do not stand still. Bezos refers to Amazon’s management style as Day One Thinking: a willingness to treat every morning as if it were the first day of business. Never stop learning, evolving and looking for new ideas.
Focus on the future. Gear yourself to where you will be in two or three years’ time rather than getting bogged down in the present. When e-books first appeared, Bezos sold them at a loss, deciding that the most important thing was to establish Amazon as the best place to buy them. As a result, it now dominates the market.
Be frugal. Whenever Amazon moved to new offices, Bezos had them furnished with cheap desks made from wooden doors. “Accomplish more with less” is his motto: “Constraints breed resourcefulness, self-sufficiency and invention.”
Hire the best people. Bezos looks for employees who are efficient but do not always go about things in obvious ways. He believes that painstaking research is vital, but the most innovative ideas come from “wandering” – being guided by curiosity and instinct.
Could you be as rich as Jeff Bezos one day?
Some say, yes. Bezos started with one simple idea – selling books via the internet. He chose books because they were easy to pack, do not have a sell-by date, and rarely get sent back. Once the system for that was established, Amazon could sell anything. If you come up with an equally good idea and pursue it fully with the aid of a well-picked team, you can make a fortune too.
Others argue that success like Bezos’s depends largely on being in the right place at the right time. He was lucky to start in business when e-commerce was still new: the same opportunities do not exist today, with Amazon crushing its rivals. He has been doubly lucky in that the pandemic has made people far more dependent on shopping online than they ever were before.
- Bezos’ ex-wife MacKenzie Scott has pledged to give half her fortune to charity, whereas he has given only a small fraction of his. Should he feel guilty?
- Bezos believes that it is more important to keep your customers happy than your employees. Is that the right way round?
- Design a board game in which companies compete to deliver products from their warehouses to several different destinations.
- Bezos insists that proposals for new products are accompanied by mock press releases. Think of a product you think should be available and write a press release for it.
Some People Say...
“The gratification of wealth is not found in mere possession or in lavish expenditure but in its wise application.”Miguel de Cervantes (1547 - 1616), Spanish novelist
What do you think?
Q & A
- What do we know?
- It is generally agreed that many of Amazon’s business practices are highly questionable. The company has been accused of paying less than its fair share of taxes, using underhand tactics against its competitors, working its warehouse staff so hard that their health suffers, and causing road accidents by putting too much pressure on delivery drivers. It claims that it pays all the tax it is obliged to, provides a market for other companies, and pays many of its employees more than the minimum wage.
- What do we not know?
- One main area of debate is around how much Bezos’s difficult early life contributed to his drive and ambition. He was born to a teenage mother and a hard-drinking father who performed in a unicycle troupe; they divorced when he was 17 months old. His mother married again when he was four: her new husband was a Cuban who had arrived alone in the US at 16, knowing only one English word: “hamburger.” Bezos says that his stepfather’s “grit, determination, optimism” have been an inspiration.
- Amazon’s sales rose by 38% in 2020 and its profits reached $21.3bn.
- Bezos vies with Elon Musk for the title of richest person in the world. Musk’s fortune is currently estimated at £135.5bn.
- Day 1 Fund
- A charitable foundation which supports families and schools in deprived areas of the US.
- Bezos Earth Fund
- Last year Bezos announced that he was giving £7.3m to organisations fighting climate change.
- Blue Origin
- Bezos’s space-exploration company. He is a big science-fiction fan and owns a Star Trek uniform.
- The Washington Post
- One of America’s most distinguished newspapers, it is best known for exposing the Watergate scandal which caused President Nixon’s downfall.
- Public Citizen
- Based in Washington, it is particularly concerned with encouraging government regulation of healthcare, transport and nuclear power.