Jeff Bezos Just Made Stunning Predictions

In a world that's rapidly changing and because of AI and all the technologies we have and the dynamism in the world, so many things are changing and they're changing so rapidly. So if you think long term, it forces you to think what are the points of stability? What is not going to change? And one of the things that changes very slowly is customer needs. And so you can build a strategy around customer needs that will have durability. It will be durable in time. So an example, Amazon is that customers like fast deliveries. And so you would never expect to 10 years from now it would be impossible to imagine a customer saying, 'I love Amazon. I just wish you delivered a little more slowly.' Or 'I love Amazon. I just wish your prices were a little higher.' Or at Blue Origin, 'I love your rockets, but I just wish they were a little less reliable.' And so these big ideas that are customer-based start with the customer. It's an idea that is in the customer's brain. Those are the ones because human nature doesn't change rapidly. And so what we as customers want tends to change slowly. And if you base your energies and direction and strategies and tactics, everything that makes a company effective around those customer needs, then you can change the details of how you get there all the time because the world is changing. So the technologies will change, your competitive set will change, everything will change except those needs. And so that's another way that long-term thinking is protective because it forces you to think about the real customer needs to center those as your big ideas and then put energy into them in a hundred ways and to be very dynamic. I always say be stubborn on the vision and flexible on the details, and you have to be because the world is changing and you change your mind. I've noticed that people who are right a lot change their mind a lot. People who are wrong a lot are very stubborn on the details. And that is also self-awareness of how reality is rather than how one would want it to be.

Well, that is such a good question. My best thing, my favorite thing is to be with a small group of people with a big whiteboard in front of me and inventing. I am an inventor. This is my fundamental nature. I remember one time we had an executive at Amazon for many, many years, a guy named Jeff Wilkey, who was instrumental in the success of the company. We've been gifted with a large number of fantastic executives, including Diego Piacentini, who I think might be in the audience somewhere. Thank you, Diego. Diego's contributions to Amazon are legendary, and to Vento too. Thank you, Diego. So one day in the early days, I literally put me in front of a whiteboard and I can come up with a hundred ideas in half an hour. Early in Amazon's history, Jeff Wilkey came to me one day. He worked for Amazon for a quarter of a century, but this is when he probably knew me only for a year. And he said, 'Jeff, you have enough ideas to destroy Amazon.' And this was such a shocking idea for me. As a founder, I had the great luxury of always being able to hire my tutors. They would hire these experienced senior executives, brilliant people like Diego and Jeff Wilkey. And there were several others too. And I would listen to them and they would teach me. Jeff said, 'You have enough ideas per minute, per day, per week to destroy Amazon.' I was like, 'What do you mean?' He said, 'You have to release the work at the right rate that the organization can accept it.' And he was a manufacturing expert. So his view of the world was every time I released an idea, I was creating a backlog, a queue, work in process. And because it was just stacking up, it was adding no value. In fact, it was creating distraction. So he said, 'Look, you have to figure out when to release these new ideas at a rate that the organization can accept them.' This sounds so obvious, but it was not obvious at the time to me, and this was a profound insight for me. So I started prioritizing the ideas better, keeping lists of them, keeping them to myself until the organization was ready for the ideas. And then I also started figuring out how can I build an organization that can be ready for more ideas. That's about having the right senior team and the right leadership and getting those people the executive bandwidth so they could do more ideas per unit time. And that is what we built. We built a company that's very good at inventing and doing more than one thing at a time. As the company gets bigger, you do want to be able to do more than one thing at a time. But that idea of releasing the work was very profound for me. And it made us operationally more effective while still being inventive.

So the actual inventions, probably because it also forces you to prioritize them better. You end up sharpening the ideas better. So yeah, probably does, but you have to wander. Thank you.

Wandering is so important because wandering is a kind of humility. So sometimes when people think about how much should I wander, wandering sounds so inefficient, but the only way to go straight to your destination is if you know where you're going. And sometimes you know where you're going, but sometimes you don't. And so wandering is that acknowledgment that in life and in business and in exploration and in invention, in building a company, a lot of the time you can see the mountaintop, but you can't see the trail, and you have to explore and you have to wander. It may feel very inefficient, but it's actually very valuable. And it's really a recognition, a humility that you don't know where you're going. But inventing has a dose that is not efficient, and it does require time to get ideas, to learn.

On the other hand, you need to be efficient once you start building that.

These are different things for different times.

And by the way, just to fill that out a little, I don't like the word balance because it implies a tradeoff. I've often had people ask me, 'How do you deal with work life balance?' And I'll say I like work life harmony because if you're happy at home, you'll be better at work. If you're better at work, you'll be better at home. These things go together. They're not a strict tradeoff. And it's true, I think, for exploration, but also determined execution. You just need to do both. And they actually do feed each other. The things that come out of the execution give you new data, new ideas about what the next step should be in your exploration. So the two things don't work against each other. They work together.

The touchstone, the thing you always go back to is those customer needs. So that's the only way that I could advise any founder or entrepreneur: deeply understand what are the big ideas that their customers want. You should ask your customers, but it's not sufficient. You also have to invent on their behalf because the biggest breakthroughs, the most important ideas, customers don't know to ask for. They don't know to ask for those things. That's why you have to dream. You have to use your intuition and your gut and your heart. All of the data that gets used in business is essential. If you're in business and you're not looking at your data, trust me, your competitors are going to beat you. But if you're only looking at your data, you also will not win, or at least not win big. Because the most important decisions that every person makes when they're building something new is made with intuition. You cannot prove it, but you have an instinct and a hunch. And then you'll pay attention. If that turns out to be wrong, it won't be a big deal. You'll correct.

Okay. So to take you back in time, in the year 2000 when the internet bubble burst, Amazon stock in a very short period of time went from $113 a share to $6 a share. And by the way, it's split many times since then. I don't know, 20 for one or maybe even more, but these prices have nothing to do with today's stock prices. But to go from 113 to six in a short period of time was very concerning. Shareholders were upset. Employees were nervous. All of our employee base, their parents were all calling our employees and saying, 'Are you okay?' This was the environment of great nervousness. But I looked at the numbers in the business, and every month as the stock price went from 113 to six, the number of customers went up every month. Our gross profits went up every month. Our operating expense, we were still in a loss position, but our losses as a percentage of sales went down every month. Every single business metric, new customers, customer repeat purchases, everything that we were monitoring through that entire period kept getting better. And so that's one observation about bubbles in general: the fundamentals can be disconnected. The fundamentals of the business, and of course as entrepreneurs, you're focused on the fundamentals of the business. The stock price is an output, an ultimate output that you actually have very little control over. Benjamin Graham, the great investor, is famous for saying in the short term the stock market is a voting machine, in the long term it's a weighing machine. So as founders and entrepreneurs and business people, our job is to build a heavy company. We want to build a company that when it is weighed, it is a very heavy company. We do not want to focus on the stock price. That will be misleading because it can be disconnected from the fundamentals when bubbles happen. So that's one thing. The second thing that happens when people get very excited, as they are today about artificial intelligence, is every experiment gets funded. Every company gets funded, the good ideas and the bad ideas. Investors have a hard time in the middle of this excitement distinguishing between the good ideas and the bad ideas. So that's also probably happening today. But it doesn't mean that anything that's happening isn't real. AI is real and it is going to change every industry. In fact, it's a very unusual technology in that regard, in that it's a horizontal enabling layer. Today we talk about AI-first companies like OpenAI and Anthropic and Mistral, and so on. There are so many startup companies that are kind of AI companies of various kinds, and that's normal for this phase. But that is not the biggest impact that AI is going to have. The biggest impact that AI is going to have is it is going to affect every company in the world. It is going to make their quality go up and their productivity go up. By every company, I literally mean every company: every manufacturing company, every hotel, every consumer products company, etc. That is hard to fathom, but it's real. There is no doubt. We don't know how long it will take exactly. We don't know how quickly that transition will occur, and it'll probably occur at different rates in different industries. But that is very real. Now what the stock market does, when we think of bubbles we think of valuations and market caps and how many billions of dollars are being invested in these six people at a $20 billion valuation even though they just started yesterday. That's very unusual behavior. Investors don't usually give a team of six people a couple of billion dollars with no product. It's rare, and that's happening today. But the great thing about industrial bubbles, this is a kind of industrial bubble as opposed to financial bubbles. If you go back, the '90s had a biotech bubble and there were a bunch of pharma startup companies that were designing drugs using new techniques and the world got very excited. As a group, they all lost money, but we did get a couple of life-saving drugs. A bubble like a banking crisis in the banking system, that's just bad. That's like 2008. Those bubbles society wants to avoid. The ones that are industrial are not nearly as bad. It could even be good because when the dust settles and you see who are the winners, society benefits from those inventions. They still get those life-saving drugs. And that's what's going to happen here too. This is real. The benefits to society from AI are going to be gigantic. And if we go back 25 years ago when the internet was in that bubbish moment, no one would have predicted a lot of the industrial benefits of that industrial bubble and the huge investment that was put in infrastructure.

And the telco companies who own the customers and who had a very strong mode ended up not being the companies that emerged.

And a lot of the infrastructure that was laid for e-commerce ended up actually working.