If you haven’t read Jeff Bezos’s 2016 Letter to Shareholders yet, I highly recommend it.
Here’s how it starts —
“Jeff, what does Day 2 look like?”
That’s a question I just got at our most recent all-hands meeting. I’ve been reminding people that it’s Day 1 for a couple of decades. I work in an Amazon building named Day 1, and when I moved buildings, I took the name with me. I spend time thinking about this topic.
“Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”
To be sure, this kind of decline would happen in extreme slow motion. An established company might harvest Day 2 for decades, but the final result would still come.
I’m interested in the question, how do you fend off Day 2? What are the techniques and tactics? How do you keep the vitality of Day 1, even inside a large organization?
The letter goes on to make some very lucid points about orienting a business culture around the demands of capital at scale — the hungry and machine-like purity of directness and speed that emerge from the body of his comments where he describes maintaining true customer focus, resisting proxies, adopting external trends and making quality decisions quickly.
But it’s really the intro, the simplicity of this black-and-white Day 1 vs. Day 2 corporate lifecycle model that I find the most powerful. It’s simultaneously ridiculous and remarkably genius.
It’s ridiculous because there’s no such thing as infinite growth. Eventually Amazon’s corporate culture will decay and the stock price will revert the market mean. This is about as certain as certain can possibly get. Of course the real question is: when exactly will the growth stop?
But this mental approach is genius. Here is is asking his employees to close their eyes and live every day like it’s Day 1 — an infinite series of Day 1s, where tomorrow is Day 1 too! He has encouraged them to develop simplicity and openness and forgiveness and curiosity as habits. In this frame of mind there is no room for second-guessing or long rehearsals of objections. There is only experiments and deciding and doing. Tomorrow is another day. I imagine that a whole collection of people like this could potentially form an amazing growth-oriented culture that could push off the inevitability of collapse for who-knows how long.
One of my favorite stories from Michael Lewis’s Moneyball is the moment where the phenomenally talented major-league baseball player Billy Beane realizes he is struggling at bat because the accumulating memories of his past mistakes are making him more and more indecisive at the plate. He’s thinking too much. And by contrast he can see that his much less physically and intellectually gifted teammate — John Kruk — is finding success because he has this childlike ability to wipe past at-bats from his mind and just take every pitch like it was the first one he’d ever seen.
Amazon is famous being a super-startup company that has yet to realize a profit, for living in a suspended state of corporate pre-history. And there are a lot of people very curious to see how long this kind of company can hold out. From this 2016 shareholder letter I think we have our answer: its pretty obvious to me that Bezos will only acknowledge history and start taking those profits on Day 2.