In 1997, when Amazon first went public, Jeff Bezos wrote what might be the most important letter to shareholders from any company. In it, he laid out a vision for the company he founded in his garage that seemed, at the time, quite different than what had come before.
What Bezos wrote then was so important to Amazon as a company that it has been attached to every subsequent shareholder letter since. It described Bezos's commitment to focus on the long term, even if it meant losing money in the short term.
Amazon definitely isn't losing money anymore. In fact, as Bezos approaches the end of his time as CEO of Amazon, the company announced what can only be described as its best quarter ever.
From a pure numbers standpoint, this wasn't Amazon's biggest quarter. That would be the one that ended in December when the company posted $125.5 billion in revenue. That makes sense. Not only does that timeframe include the holiday shopping season, but Amazon also held its Prime Day sale during October last year. That two-day event alone accounted for $10.4 billion in revenue.
Last quarter, however, had no such boost, but the online retailer still generated $108 billion, and more than $8 billion in profit--the latter of which was the highest ever for the company.
As I listened to Amazon talk about its results, I was reminded of three words from that letter that, looking back, seem almost prophetic in terms of what we've seen over the past few months. The three words?
"Obsess Over Customers"
You can draw a straight line from the words Bezos wrote 24 years ago to the company's remarkable success over the past year. As the pandemic took hold, there was literally no company better positioned to meet the extraordinary needs of its customers than Amazon.
At the time, Bezos explained it like this:
From the beginning, our focus has been on offering our customers compelling value. We realized that the Web was, and still is, the World Wide Wait. Therefore, we set out to offer customers something they simply could not get any other way, and began serving them with books. We brought them much more selection than was possible in a physical store (our store would now occupy 6 football fields), and presented it in a useful, easy-to-search, and easy-to-browse format in a store open 365 days a year, 24 hours a day. We maintained a dogged focus on improving the shopping experience, and in 1997 substantially enhanced our store.
Even though those words were written 24 years ago, they are exactly why Amazon just had its best quarter ever. Amazon was obsessed with meeting the needs of its customers, and has been relentless in its commitment to serving them better.
When people weren't sure if it was safe to leave home to buy the simple items they needed each day, Amazon had already built one of the most efficient systems ever imagined for turning a few clicks on a website into a brown box on your front porch. That's why millions of Americans went online to find everything from toilet paper to personal care items to groceries.
Brian Olsavsky, Amazon's chief financial officer, explained it in the context of turning "clicks into productive sales. If a customer finds what they're looking for, at a price they're willing to pay, without having to wait more than a day or so for it to be delivered, they make a purchase. That's a productive sale.
The foundation for that didn't start this quarter. It didn't happen last year when the world came to a stop. It happened with an idea laid out in a letter that came to define the company's decisions for more than two decades. If you obsess over your customers first, you'll be in a position to earn their business.
"We are still in the early stages of learning how to bring new value to our customers through Internet commerce and merchandising," Bezos wrote. "Our goal remains to continue to solidify and extend our brand and customer base. This requires sustained investment in systems and infrastructure to support outstanding customer convenience, selection, and service while we grow."
In short, it requires a company to obsess over its customers. He could have written those words about this last quarter. Instead, the fact that the company has lived them out for 24 years is why it just had its best quarter ever.