By Andrew Lisa GOBankingRates.com
WWR Article Summary (tl;dr) Here are seven valuable business insights from Amazon CEO Jeff Bezos who took a big chance in launching the e-commerce giant in 1994. Originally just an online bookstore, Amazon became the fastest company ever to hit annual sales of $100 billion in 2015.
Last week, Jeff Bezos briefly surged past Microsoft founder Bill Gates to become the richest person in the world, according to Forbes.
With the help of a recent stock surge, the CEO and founder of Amazon, had a net worth of at least $90 billion.
Although his time in the No. 1 spot was short, he remains one of the richest people in the world.
Bezos owns 80 million shares, or 17 percent, of Amazon, a company that's experiencing massive growth thanks in part to its cloud-computing sector. However, Amazon wasn't always a tech behemoth. Bezos took a big chance in launching the e-commerce giant, leaving behind a high-powered hedge fund job in 1994. Originally just an online bookstore, Amazon became the fastest company ever to hit annual sales of $100 billion in 2015.
Such staggering success requires keen business acumen. Here are seven valuable business insights from Amazon's impressive CEO.
ALIGN YOUR SKILLS TO THE MARKET'S NEEDS, NOT THE OTHER WAY AROUND In 2009, Bezos described the corporate philosophy that led to the creation of the wildly successful Kindle. At the time, it was the company's best-selling product.
He explained that one strategy for entrepreneurs to succeed is to determine what they're good at and seek out a segment of the market that needs that skill. The other option, Bezos said, is to find out what customers need and hone your skills accordingly.
Amazon, which had never previously been in the tech business, took the second route with Kindle. E-books required e-readers, so Amazon developed one that customers loved.
ADAPT AND PERSEVERE, OR PERISH In 2013, Bezos, who had no previous newspaper experience, bought the Washington Post for $250 million. The purchase raised eyebrows. After all, Bezos was a legendary innovator, and print journalism was a yesteryear industry that had been in a rapid decline since the arrival of digital media.
Bezos, however, didn't see it that way. Believing that the Post was a strong brand that employed many talented workers, Bezos opted to buy the company despite the state of the newspaper industry. The way he saw it, the paper had two choices: accept the new reality, lean on its strengths and find a new way forward in the face of a changing world _ or go the way of the dodo bird.
"What we need to do is always lean into the future," said Bezos in an ABC interview. "When the world changes around you and when it changes against you _ what used to be a tailwind is now a headwind _ you have to lean into that and figure out what to do, because complaining isn't a strategy."
By focusing on the needs of readers rather than advertisers, Bezos transformed the Washington Post into a modern, profitable enterprise that attracts paying customers.
BE 'FOREVER YOUNG' According to Bezos, one key to his extraordinary success is remaining young at heart.
ABC asked the CEO for his thoughts on Blackberry, which pioneered the mobile revolution in the 1990s but failed to continue innovating and soon fell behind. By 2013, Blackberry went private and laid off 40 percent of its workers. On the other hand, Amazon has been in a constant state of reinvention since the early '90s.
"If your customer base is aging with you, then eventually you are going to become obsolete or irrelevant," said Bezos. "You need to be constantly figuring out who are your new customers and what are you doing to stay forever young."
EXPERIMENT AND LEARN FROM YOUR ATTEMPTS For Amazon, the road to success was paved with experimentation. And while many of those experiments were successes, others resulted in spectacular failures, including the following ill-fated projects:
Fire Phone Amazon Destinations travel site Amazon Local Amazon Auctions ZShops
Rather than dwelling on his missteps, Bezos treats his business as a laboratory. As he recently told Fortune, "Experiments are key to innovation because they rarely turn out as you expect, and you learn so much."
SWING FOR THE FENCES Bezos didn't become a contender for richest person in the world by playing it safe. On the contrary, the Amazon CEO's legendary failures have cost the company money _ but his successes have earned Amazon billions. For every Fire Phone or Destinations, there's an Amazon Prime, Marketplace or Web Services, the latter of which earned $12.2 billion in revenue in 2016 alone.
oting that nine big swings out of 10 will be misses, Bezos has stressed the importance of continuing to aim for the fences, saying that the one that connects will be the equivalent of 1,000 home runs.
Bezos said, "Given a 10 percent chance of a 100 times payoff, you should take that bet every time."
BE SKEPTICAL OF PROCESSES AND PROTOCOLS Bezos has suggested that, as companies grow, they become too reliant on their standard systems and processes. While there's nothing wrong with having protocols in place, focusing on processes over outcomes can be dangerous. And, it's one of the biggest mistakes you can make when running a business.
"It's not that rare to hear a junior leader defend a bad outcome with something like, 'Well, we followed the process,'" Bezos said in his 2016 letter to shareholders. Instead of continuing to follow a protocol when something isn't working, Bezos believes that problems should be viewed as opportunities to improve the current process.
REMAIN A 'DAY ONE' COMPANY FOREVER Bezos refers to startups as "Day One" companies, noting that these businesses are constantly experimenting and seeking opportunities to grow. However, as businesses develop, they stop taking so many chances and become "Day Two" companies. Bezos said companies that stop innovating and pushing themselves are destined for failure.
"Day Two is stasis," he said. "Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why (for Amazon) it is always Day One."
In an effort to ensure Amazon stays relevant, Bezos even named the building he works in Day One.