When Jeff Bezos Had The Last Laugh…
Are you worried that negative opinions from people would discourage you from achieving your goals and dreams? Are you getting dispirited whenever somebody pops up and tell you that you would fail? Are you facing a continuous onslaught of criticisms at every step? Then remember Jeff Bezos.
“First they ignore you. Then they laugh at you. Then they fight you. Then you win.” ~Mahatma Gandhi
1) When Bezos shared the news of leaving his Wall Street company and starting a new internet business of selling books online, his parents were shocked. His mother Jackie Bezos suggested to her son that he run his company at night or on his weekends.
-Many a time, most of our parents and siblings give their opinions without a deep-dive thought process and a thorough analysis from multiple perspectives. They overestimate or underestimate external and situational factors which vary from person to person. Their worldview is completely different from us.
-We let them impose their worldview on us forcing us to be like someone else or try to live up to others’ expectations. In the race to satisfy others, we might forget who we are and what kind of life we aspire to live.
2) When Bezos introduced ‘Book reviews’on Amazon, there were negative reviews for some of the books. It infuriated authors and publishers. Bezos got an angry letter from a publisher implying that Bezos didn’t understand that his business was to sell books not trash them. But Bezos believed in his reasoning “We don’t make money when we sell things. We make money when we help customers make purchase decisions”.
-Don’t feel offended when somebody responds negatively. If you feel offended, your reaction would be to defend your beliefs and create further conflicts. It would be a wise choice to reason your thoughts behind those decisions that elicited any negative response.
Better to have a powerful response, even if negative, than no response at all.
3) In the initial days of Amazon, Bezos was seeking to raise money and pitched his ideas to many investors. Bob Gelfond, a former colleague of Bezos approached his father for an opinion, who had a long career in book publishing business. Gelfond’s father recommended against investing money in Amazon.
-Most of us may feel easy to understand and visualise linear growth but exponential growth would be difficult. Because most of us rarely came across exponential growth.
-Everyone’s opinions are based on their own situational experiences, beliefs, biases in their mind. It is not that we need to accept as it is.
4) Tom Alberg, a former executive at McCaw cellular could not believe that the idea of buying books online would work as he loved browsing in bookstores. A few days later he failed to find a business book for his son at a local bookstore and then he had to order it from Amazon. After this incident, he changed his mind and decided to invest in Amazon.
-It’s not that people don’t believe in you or trust in you, but because they see the world with different eyes. Some of them are yet to experience the feeling which we intend to bring.
5) Many investors didn’t believe the practicality of an online bookstore — they uttered: “If you’re successful, you’re going to need a warehouse the size of the library of Congress.”
-Many people lack knowledge of what they are not aware of, yet they provide opinions. They are not even aware that they are lying to themselves. You have to trust yourself and choose to believe or not to believe what someone says to you.
6) During Amazon’s IPO roadshow, a lot of people said to Bezos — “You are going to fail, Barnes & Noble is going to kill you, and who do u think you are not to share this stuff?”
Three days before Amazon’s IPO, Barnes & Noble filed a lawsuit against Amazon in federal court alleging that Amazon was falsely advertising itself to be Earth’s largest bookstore. but the lawsuit ended up giving his smallest competitor more attention.
-You are never responsible for the action of others — You are only responsible for you. If you understand this, you would be hardly be hurt by careless comments or actions of others — Don Miguel Ruiz
7) When Barnes & Noble launched their e-commerce site, many believed and seemed ready to see Amazon crushed. CEO of Forrester Research, a widely followed technology research firm, issued a report and calling the company ‘Amazon.Toast’.
Amazon’s employees were worried. But Bezos told them “Don’t be worried about our competitors because they are never going to send us money anyway. Let’s be worried about our customers and stay heads-down focused”
-If you are afraid, the fear would not let you focus and you cannot work efficiently. Focus on what engages you or inspires you.
8) Bezos tried to hire Rick Dalzell, a Walmart executive. Walmart’s logistics head Lee Scott, the future Walmart CEO told Dalzell “Amazon was a novel idea but that it had limited potential”.
Don Soderquist, Walmart’s COO, “Since Amazon didn’t store its inventory(at that time), it just ordered it from distributors and then quickly shipped it back out. This model would hit a wall once it got to $100 million in sales”.
There were about a million of economic consultants in the world during the year 2008 yet none of them could predict the 2008 financial crises. Humans systematically overestimate their knowledge and their ability to predict. Experts suffer more from the overconfidence than laypeople do.
“The problem with experts is that they do not know what they do not know” — Nassim Taleb
9) In 1997, Bezos gave a presentation to a Harvard class who was taking a course called ‘Managing the Marketspace’. At the end of the class, many students told him that Amazon was unlikely to survive the wave of established retailers moving online. One student told him, “You seem like a really nice guy, so don’t take this the wrong way, but you really need to sell to Barnes & Noble and get out now”.
As success stories(rather than failure stories) are covered more in media and books, people tend to overestimate the methodologies/strategies used in achieving those triumphs. The more people follow and talk about a certain idea, the better we feel the idea to be.
Somebody’s opinion or their worldview can give beautiful shape to your dream or it could destroy everything around you if you let that enter your mind without due diligence.
10) In 1999, The financial weekly Barron’s published an article ‘Amazon.Bomb’ that declared ‘Investors are beginning to realise that this storybook stock has problems’ and the article suggested that Walmart and Barnes & Noble would crush the upstart. Another cover story pointed out that Amazon is in self-destruction mode burning their capital.
During dot-com bust, investors, the general public dismissed the Amazon’s prospects and began to doubt whether the company would survive as many other internet companies have folded. Amazon’s stock was steadily going down during this period.
Ravi Suria, a convertible bond analyst at Lehman Brothers wrote that Amazon was in trouble and predicted doom based on the previous season’s losses. ‘From a bond perspective, we find the credit extremely weak and deteriorating’ he wrote. He further wrote that investors should avoid Amazon debt at all costs and the company had shown an exceedingly high degree of ineptitude in areas like distribution. The prediction further damaged the Amazon brand.
If you believe people are inherently good or people are inherently bad, you will find enough evidence to support your belief. Humans are capable of filtering the discomforting evidence without even being aware of. They unconsciously look for things that could reinforce their convictions. The more we are aware of biases in decision-making processes, we would know whether to value other’s decisions, opinions or not.
11) One day, CEO of eBay, Meg Whitman visited Bezos and offered to buy Amazon Auctions business. She was of the opinion that Amazon’s core business is fundamentally at odds with its attempts to host third-party sellers. People often make decisions based on the information that is easier to obtain. Sometimes they need to look for ‘harder to obtain information’ to help them in making good decisions.
Bezos told her that third-party selling on Amazon wasn’t working meant…that it wasn’t working at this particular moment but would change one day. All our ideas may not be producing results at this time but would eventually succeed if we continue to believe in them and take efforts to execute.
12) When Amazon was celebrating its tenth-anniversary, New York Times wrote “Bezos was no longer the right man for the job — It is time for him to give the mantle to somebody else and retire”
The world is continuously trying to make you indistinguishable from everybody else. It’s a lifelong struggle to overcome this. Don’t be distracted by views of others and focus on what engages you or inspires you. We may not control what others say but we do have control over how we react.
References: The Everything Store by Brad Stone, The Four Agreements by Don Miguel Ruiz, The Art Of Thinking Clearly by Rolf Dobelli, The Art Of Creative Thinking by Roy Judkins.