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Amazon's 2016 Letter to Shareholders: The 4 Foundations for Sustaining Growth in Large Companies

· 5 min read

Only Live "Day 1" = Without Growth, There is Death

The office building where Amazon CEO Jeff Bezos works is called "Day 1." Over the years, no matter which other building he moves to, he always brings this same name with him. Therefore, he has a lot of authority on this term.

Someone might ask, what is "Day 2"? Day 2 is stagnation, followed by irrelevance, then suffocating, painful decline, and finally, death.

This is why Bezos believes that every day should be Day 1; without growth, there is death. So how do we prevent "Day 2"? There are four foundations.

A True Obsession with Customers

There are countless business strategies, but why focus on "obsession with customers"? The benefits are numerous, with the biggest being: Customers are always dissatisfied, even when they say they are satisfied. Customers often don’t know what they truly want: they actually want something better. If you want to serve customers well, you must create products and services in their name. For example, the Prime service was not something customers asked Amazon for, but the results proved it was indeed what they wanted.

Maintaining "Day 1" requires patience; you need a lot of experimentation and to accept failure. Planting seeds and growing saplings takes time, but once you see what makes users happy, double down on it.

Resisting Proxies

As companies grow larger, we often tend to rely on proxies or intermediaries. This form of dependency can take many shapes and is very much "Day 2." Here are two examples:

  1. Relying on processes as proxies for results. Good processes serve you, allowing you to better serve customers. You must never serve the process. Why? When you serve the process, you only focus on doing the process correctly, regardless of the outcome. When failures occur, only inexperienced leaders say, "We followed the process," while seasoned leaders say, "We found an opportunity to improve the process." Constantly ask yourself, does the process own us, or do we own the process?

  2. Relying on market research and customer surveys as proxies for customers. When you invent and design products, relying on research can be dangerous; "satisfaction increased from 47% to 55%" is a vague statement that can be misleading.

    1. Good investors and designers deeply understand customers; they invest significant energy in developing intuition and study numerous fascinating anecdotes rather than average data from surveys. They exist to design.
    2. Bezos does not oppose public testing and surveys; they help you identify blind spots, but as a provider of products and services, you must prioritize your vision and unique value over customer feedback. Exceptional customer experiences begin with intuition, curiosity, playfulness, courage, and taste—qualities that user surveys cannot provide.

The trends of the world favor those who align with them and doom those who resist. These trends are not hard to identify, but strangely, large companies often struggle to embrace them. One such trend today is machine learning and artificial intelligence.

Over the past few decades, many tasks could be solved with precise rules and algorithms; next, with machine learning, we can tackle tasks that cannot be described by exact rules.

Much of what happens in machine learning occurs at the foundational level, out of sight, but you can at least call them very simply via APIs.

Fast Decision-Making

"Day 2" companies make high-quality decisions, but their decision-making speed is very slow. To maintain the energy and vitality of "Day 1," you must make "high-quality and high-speed" decisions. This is important not only because "speed" matters in the business world but also because having an atmosphere of "fast decision-making" is more enjoyable.

How can you achieve fast decision-making? Bezos does not have a complete answer, but here are some thoughts:

  1. Decisions are inherently unequal; never treat them all the same. Reversible decisions should use lightweight decision-making processes.

  2. Most decisions can be made when you have 70% of the information. Waiting until you have 90% may be too late. Also, in either case, you must quickly identify and address bad decisions. When you are highly responsive, making mistakes is cheap, while being slow is costly.

  3. Use a management style of "==I disagree, but I commit to executing well==." This saves a lot of time spent on disputes.

    1. When no one knows the outcome, ask, "I know we have a disagreement, but are you willing to take a gamble with me? I disagree, but I commit to executing well?" The answer you get is likely to be, "Sure."
    2. The party that disagrees does not commit out of indifference but from a genuine and sincere disagreement, allowing the other party to reconsider your "disagreement" while still acting quickly due to your commitment.
  4. Identify misalignments early and escalate them immediately. Sometimes, goals between teams conflict, and disputes at the same level cannot be resolved, wasting a lot of time and energy. In such cases, escalating will make decision-making faster and easier.

How to instantly appear clever when speaking

· 3 min read

The Greeks uses those persuasive tricks (schemes)

You are already familiar with many of the tricks:

  1. Analogy (my love is like a cherry)
  2. Oxymoron (pretty ugly)
  3. Rhetorical question (do I have to explain this one?)
  4. Hyperbole (the most amazingly great figure of all)
  5. Coyness (Dad gifts me a new iWatch ... but I say "oh, you shouldn’t have")
  6. Dialogue (teenagers are especially fond of this: Alice said what and then I sad what and then Charlie said what)
  7. Speak-round (“He Who Must Not Be Named”)

The secrets lie in figures of speech

Figures of speech - Making words presented differently by repetition, substitution, sound, and wordplay. Making words sound differently by skipping, swapping, etc.

  1. Repeated first word: use a lot of “and” to start the sentence while thinking what to say.

    1. e.g., And God said, let there be light: and there was light. 2., e.g. Political figures substitute “um” or “you know” with “and” when thinking what to say.
  2. Multiple yoking

    1. e.g., he gets it past two defenders, shoots … misses… shoots again… goal!
  3. Idiom

  4. Self-answering question

    1. e.g., “What do we want? Justice! When do we want it? Now!”
  5. Tropes: swapping

    1. Metaphor
    2. Irony
    3. Synecdoche: White House
    4. Metonymy

Twist a cliche

Win the intelligent audience by twisting the expression. For example, adding a surprising end. e.g.

  • Friend: it’s excellent book for killing time.
  • You: sure, if you like it better than dead.

The Yoda technique of switching

==The mighty ABBA sentences (chiasmus)==, e.g.

  1. Ask not what your country can do for you, ask what you can do for your country.
  2. Let’s not settle for swimming with the sharks. Let’s make the sharks want to swim with us.

Or even more, ==inserting a pun into a chiasmus.== e.g.

  • a birthday card for a friend who turns 40. Front: “what kind of party suits bob’s birthday?” Back with a photo of naked two-year-old bob: “the kind where he wears his birthday suit.”

How Churchill Got Rhythm?

Dialysis: Either... or... e.g., George W Bush: you’re either with us, or you’re with the terrorists.

Antithesis: Not... but... e.g., The success of our economy has always depended not just on the size of our gross domestic product, but on the reach of our prosperity.

Say yes and no at the same time

  • Edit yourself loud, which makes the narrative sound more fair and accurate. (Correction figure)
  • No-yes sentence. (Also dialysis)
    • e.g.
      • friend: he seems like a real straight shooter
      • you: straight, no. shooter, yes.
    • e.g.
      • lover: you seem a little put out with me this morning.
      • you: put out, no. furious, yes.

We are not unamused

  • litotes 緩叙法 *, e.g. OJ Simpson’s appearance at a horror comic book convention: I’m not doing this for my health.
  • climax *, e.g. A little neglect may breed great mischief…for want of a nail the shoe was lost; for want of a shoe the horse was lost; and for want of a horse the rider was lost.

For fun: Invent new words

Inventing new words is dangerous in high school or a government agency. However, it is impactful so we would better use it wisely.

examples of inventing

  1. Verging. Turn a noun into a verb or vice versa. (e.g., Google it!)
  2. *-like figure. (e.g., God-like!)

Tailoring the arguments for persuading the decision maker

· 2 min read
  1. People make the mistake of focusing too much on the content of their argument and ==not enough on how they deliver that message==. Certain buzzwords only work for certain executives.
  2. Finding the chief decision maker and then tailoring the arguments can vastly improve the chances of success.
  3. There are five decision-making categories…
    1. Charismatic: exuberant about a new idea initially but make decisions based on balanced information.
    2. Thinker: may be contradictory and need to be cautiously worked through.
    3. Skeptic: make decisions based on ==gut feeling==.
    4. Follower: make decisions based on their trusted executives or their past similar decisions.
    5. Controller: focus on pure facts and analytics because of their fears and uncertainties.
StyleTarget CharacteristicsPursuader's Strategy
Charismaticeasily enthralled but make decisions based on balanced info
Emphasize bottom-line results
Focus on results
be straight-forward
benefits w/ visual aids
keyword: proven, actions, easy, clear
Thinker (Xing Wang)toughest to persuade
needs extensive detail
presents market research, surveys, cost/benefit analysis.
keyword: quality, numbers, expert, proof
Skepticchallenge everything and make decisions based on gut feelingsestablish credibility with endorsements from someone they trust.
keyword: grasp, power, suspect, trust.
Followerrely on past decisions
late adopter
Use testimonials to prove low risks.
present innovative but proven solutions.
keyword: expertise, similar to, innovate, previous.
Controllerunemotional, analytical
only implements own ideas
present highly structured arguments
==make listener own the idea==.
avoid aggressive advocacy.
keyword: facts, reason, power, just do it.

Humility is the road to character

· 2 min read

There are two inner selves in one person - Adam I and Adam II. Adam I pursues resume virtues, while Adam II pursues eulogy virtues.

The shift from a culture of humility to the culture of “big me” encourages people to nurture Adam I.

In the times of humility, elder George Bush, he resisted speaking about himself and crossed out the word “I” instinctively in the speech text. And the speechwriter would beg him: You’re running for president. You’ve got to talk about yourself. Finally, they did cow him into doing so. However, the next day he’d get a call from his mother. “George, you’re talking about yourself again.”

This shift may be caused by the increasingly tremendous benefits brought by fame. (Thanks for the mass media and then the Internet.) Since the culture prefers people who self-promote, people become more narcissistic than ever.

==Pride is the desire to see yourself as superior to everybody else. Humility is the self-confrontation of weakness==. Thus it is painful and takes efforts to build the character with humility. You are not alone. Kant says we are all made from ==crooked timber==.

How to improve my humility? Reflect on errors by asking questions and develop strategies to act differently next time. Did I make mistakes today? Am I putting my loves in disorder? Am I not fully present for people who are asking my advice or revealing some vulnerability? Am I more interested in making a good impression than in listening to other people in depth?

==The author David Brooks believes - only Adam II can experience deep satisfaction in life==. I think that regarding SWOT analysis, in addition to strength-opportunity strategy, this book advises another direction for actions: weaknesses-threats strategy.

The Characteristics of a Good Manager

· 3 min read

Answer: Morality, Benevolence, Righteousness, Propriety

  • Dao: Truth is the law of the world and human development. It embodies Mao Zedong's principle of "seeking truth from facts" and Ray Dalio's "Embrace Reality And Deal With It." How can one grasp the truth? By observing more, learning more, asking questions, and solving problems. The truth that is held by a few and can benefit others is called insight, while the ability to predict future outcomes based on truth is called vision. When the truth you discover helps others, they will help you in return, which is the principle of "gaining support through righteousness."

  • Virtue: This means "give people what they want," serving the people, and efficiently creating products and services that the public enjoys. In companies and organizations, virtue is about aligning the goals of subordinates, managers, and the company to create synergy.

  • Benevolence: Empathy, the ability to see things from others' perspectives and understand what they are thinking. It also involves genuinely wishing for others to succeed.

  • Righteousness: Fairness and justice; achieving success requires rewarding good deeds and punishing wrongdoings.

  • Propriety: Adhering to rules, which means predictable professionalism, where actions meet the community's expectations and are subject to peer review. For example, as a software engineer, my goal is not only for users to enjoy my product but also for my peers to recognize my achievements, which is the true success in my profession. In East Asian rice civilization, diligence, waking early and sleeping late, and being earnest align with Eastern propriety. In the Western world, mercantilism emphasizes mutual benefit in business dealings, creating a pleasant atmosphere, which aligns with Western propriety. Eastern people should not expect Westerners to admire their diligence, nor should Westerners expect Easterners to praise their flattering words.

With these characteristics, one can achieve harmony among people. Coupled with seizing the right timing, great accomplishments can be achieved. If one is born at the wrong time, they may simply remain unknown in the world. ¯\_(ツ)_/¯

Original Text

The First Chapter of the Original Text

The five elements of Dao, Virtue, Benevolence, Righteousness, and Propriety are one body.

Dao is what people follow, allowing all things to be unaware of their origins. Virtue is what people obtain, enabling all things to achieve their desires. Benevolence is what people are close to, possessing compassion and empathy to sustain their existence. Righteousness is what people ought to pursue, rewarding good and punishing evil to establish achievements. Propriety is what people practice, rising early and retiring late to maintain the order of human relationships.

To be the foundation of humanity, one cannot lack any of these.

The wise and virtuous understand the principles of prosperity and decline, comprehend the numbers of success and failure, discern the trends of governance and chaos, and grasp the principles of advancement and retreat. When the time is right, they can reach the heights of ministerial positions; when opportunities arise, they can achieve extraordinary accomplishments. ==If they are not fortunate, they may simply remain unknown==. Therefore, their principles are lofty, and their names are esteemed by future generations.

Simon Sinek: How Great Leaders Inspire Action? Golden Circle

· One min read

People don't buy what you do. They buy why you do it. So Simon Sinek coined a phrase "Golden Circle" which has three tiers, from core to exterior - why, how, and what. Unfortunately, average leaders think from what, how, to why.

For example, Apple Company will say...

  1. Why: Everything we do, we believe in challenging the status quo. We believe in thinking differently.
  2. How: The way we challenge the status quo is by making our products beautifully designed, simple to use, and user-friendly
  3. What: We just happen to make great computers.
  4. Want to buy one?

Simon Sinek: How Great Leaders Inspire Action? The Golden Circle

· One min read

People don't care about what you do; they care about why you do it. Simon Sinek introduced a Golden Circle that starts from the inside out: Why? How? What? Unfortunately, mediocre leaders typically think from the outside in.

For example, Apple would say...

  1. Why? Everything we do is to challenge the status quo, and the belief we pursue is extraordinary.
  2. How? The way we challenge the status quo is by making our products simple and beautiful, and by perfecting the user experience.
  3. What? We just happen to make some really great computers.
  4. Want to buy one?