What Won't Change

Bezos said this at Amazon’s annual shareholder meeting in Seattle on June 7, 2011, in an answer GeekWire transcribed from the company’s webcast. A shareholder had asked whether Amazon was taking enough risks, and Bezos replied that not everything Amazon tried would work before giving this line. He had explained the idea in a 2007 Harvard Business Review interview, using the same example he named at the meeting: the business that lets outside merchants sell on Amazon.

In the interview, Bezos said it helps to “base your strategy on things that won’t change,” and for Amazon those are mostly about customers: they want selection, low prices, and fast delivery. He could not imagine customers saying, ten years from now, “I love Amazon, but if only they could deliver my products a little more slowly.” Stubbornness pays, he said, when you believe a group of customers is important, that you have identified their “nontransient needs,” meaning needs that won’t go away, and that the market is big enough to matter. So the vision he stays stubborn on is a lasting customer need, and how to meet it is a detail.

For the outside-seller business, the vision was vast selection for shoppers, which Amazon would get by inviting other merchants onto its site. Auctions came first and failed, because Amazon’s shoppers want convenience and won’t wait for an auction to close. Next came zShops, with set prices but sellers kept on separate pages, and it drew no customers either. The third try put sellers on Amazon’s own product pages, right next to Amazon’s listing and free to offer a lower price, and that is when the business took off. Amazon’s own purchasing staff, who stood to be undercut on their own pages, objected; Bezos said Amazon breaks deadlocks like that by asking, “Well, what’s better for the consumer?” His summary: “We made a lot of twists and turns in the execution. We worked on it for a few years. But we didn’t give up on the vision.”