Business Advice, Retail

‘Heart, intuition and risk taking’: How Jeff Bezos makes decisions, and why he mimicks small business

Matthew Elmas /

It may be hard to believe now, but there was a time when Amazon founder Jeff Bezos was packing and shipping all of the e-commerce company’s orders himself.

That was a while ago, but the entrepreneur says he remembers Amazon’s early days in the 1990s like it was yesterday.

In a recent wide-ranging interview with David Rubenstein, Bezos explained its always been his goal to ensure Amazon, despite having around half a million employees, has the “heart and spirit” of a small business.

Why? Bezos has a business philosophy called ‘Day One’ that he attributes to much of Amazon’s success, helping to keep the company nimble, open to change and willing to innovate — just like a well-oiled SME.

“You have to use heart and intuition, there has to be risk taking, [and] you have to have instinct — all these good decisions have to be made that way,” Bezos told Rubenstein.

Of course, Amazon isn’t a small business, but Bezos believes the SME mentality has helped his company craft some of its most successful innovations.

Take Amazon Prime, the e-commerce giant’s infamous loyalty program that provides members with free, and fast, shipping on all orders, as well as a plethora of other benefits.

Last year the program boasted 100 million paid members, who pay around $US12.99 (17.90) per month in the US for the privilege. In Australia, Prime members pay $6.99 a month or $59 a year, but they only have access to two-day delivery services.

Prime is regarded as one of the most successful loyalty programs in retail history, but as Bezos explained, it wasn’t always that way.

“A junior software engineer … had this idea that we could offer people kind of an all-you-can-eat buffet of fast free shipping,” he said.

“The finance team went and modelled the idea and the results were horrifying; shipping is expensive … [but] customers love free shipping.”

In the early days of Prime, Bezos said the program wasn’t very good for the bottom line.

“What happens when you open an all-you-can-eat buffet? Who shows up first? The heavy eaters,” he said.

But it wasn’t long before the program gathered steam, leading to mainstream adoption, scale, and ultimately a wildly successful program that’s been credited as underpinning much of Amazon’s success.

Taking a chance on an idea a junior software engineer had was risky, but according to Bezos, that’s the name of the game.

“Getting it wrong isn’t that bad,” he said. “We make mistakes, and we make doozies, like the fire phone.”

“But the big winners pay for thousands of failed experiments.”

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Matthew Elmas

Matthew is the news editor at SmartCompany.

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