LSW #12 Understanding how Bezos thinks
Bezos’ shareholder letters
Over the weekend I published a new article. It contains less of my writing and more of Jeff Bezos.
Most people are familiar with Amazon. What many are not as familiar with is Amazon's shareholder letters that Bezos wrote every year. His 2020 shareholder letter was the last he wrote as CEO.
The letters are a treasure trove of Bezos’ mental models and frameworks in business strategy and life itself.
I had collected notes from these letters over the years, and noticed they were falling under certain themes. So I decided to capture everything in one place and publish it as an article.
It's filled with key ideas that you will want to keep coming back to. His frameworks on decision making and failure are especially potent and applicable to many situations at life and work.
This article is a comprehensive introductory primer to some of the core philosophy of Jeff Bezos. More importantly it will make you a better thinker. I am sure you will find them as useful as I have over the years.
Being distinct takes work
In his 2020 shareholder letter Bezos cites this particular passage from The Blind Watchmaker by Richard Dawkins:
Staving off death is a thing that you have to work at. Left to itself – and that is what it is when it dies – the body tends to revert to a state of equilibrium with its environment.
If you measure some quantity such as the temperature, the acidity, the water content or the electrical potential in a living body, you will typically find that it is markedly different from the corresponding measure in the surroundings.
Our bodies, for instance, are usually hotter than our surroundings, and in cold climates they have to work hard to maintain the differential. When we die the work stops, the temperature differential starts to disappear, and we end up the same temperature as our surroundings.
Not all animals work so hard to avoid coming into equilibrium with their surrounding temperature, but all animals do some comparable work. For instance, in a dry country, animals and plants work to maintain the fluid content of their cells, work against a natural tendency for water to flow from them into the dry outside world. If they fail they die.
More generally, if living things didn’t work actively to prevent it, they would eventually merge into their surroundings, and cease to exist as autonomous beings. That is what happens when they die.
The default state in nature is entropy. Our living bodies are in a higher state of order and constantly fighting entropy. Death essentially is going back to entropy and default.
The general point he makes is around the price you need to pay to be distinct. The world and universe are constantly pulling you to be typical.
Standing out and being yourself, while sounding cool, also has a heavy price to be paid.
And it's a constant process. Stop being alert to it and you will automatically start getting pulled to the default. This is both a metaphor and the reality of our lives.
Reflection Questions
In what areas of work and life have you chosen to go with the default rather than fight to be distinct?
Whether you are aware of them or not, we have a set of mental models that we keep going back to. Are you aware of yours?
What are some mental models that might be holding you back?
Leader’s Library
This week's reading recommendation is the book Invent and Wander by Walter Issacson. It contains all of Bezos' shareholder letters and balances it out with transcripts of a range of his speeches. It's loaded with nuggets and a must-read.
While my article is a good introductory primer, it removes most of the context. This book captures everything in one convenient package. A ready reference that you will keep coming back to.
That's it for this edition. Have a great week!
– Sheril Mathews