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Jeff Bezos' annual shareholders letter
- sakoeun77 8y agoHOPEFULLY I'M A SHAREHOLDER WITH AMAZON. GOD BLESS AMAZON AND THEIR EMPLOYEES. CONTINUE EXPANSION GLOBALLY.
- laythea 8y agono need to shout
- pcunite 8y agoCongratulations and thank you to the now over 560,000 Amazonians who come to work every day Wow, that's incredible. How much pay could each one make and the company still be profitable?
- Semirhage 8y agoThat’s a hundred thousand more people than the population of Florence!
- GalacticDomin8r 8y agoUsing 2013 census data, if Amazon employed only the population of Wyoming and its entire population was in the labor force, Wyoming would have an unemployment rate < %4.
- chrisseaton 8y agoWhy Florence in particular?
- Semirhage 8y agoI live in Italy, sorry I should have picked a US city.
- retsibsi 8y ago'More than 10x the population of Florence, South Carolina!'
- duncan_bayne 8y agoMeh. Not all of us here are American :) "One sixth the population of Melbourne" would have worked as well.
- booleandilemma 8y agoIt’s almost .01% of the population of Earth!
- duncan_bayne 8y agoCould be as much as 20% of the population of Earth back in 10,000BC. Modern society is amazing.
- marnett 8y agothis is a global community! Yay Florence!
- deleted 8y ago[deleted]
- grivescorbett 8y agoIt's difficult to believe that this is FTEs. Very easy to believe it's FTEs, contractors, temps, and vendors. Including warehouse workers etc. EDIT: I was curious, so I took a peek at their 10-K [1]. "We employed approximately 566,000 full-time and part-time employees as of December 31, 2017." I couldn't find any info on their FTE count with a quick keyword search. http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-sec&control_selectgroup=Annual%20Filings#15414896 http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-sec...
- delecti 8y agoIt's probably noteworthy that their reference date is in December. I suspect their total would be lower in April.
- 1123581321 8y agoTheir 2017 profit was 3B, so they could each receive a $6,000 raise with that.
- scarface74 8y agoI'm so use to Amazon not reporting a profit consistently, I had to check to make sure....
- ve55 8y agoAccording to Wikipedia their profit was 3B last year. If they have 566,000 full-time employees at 2,000 hours each, that is 3 billion USD they have to distribute to 1,132,000,000 hours, so they could raise the wage of each employee evenly by around $3 an hour, and would then make $0 instead of $3B. When a company has this many employees (compared to some other large tech companies like Facebook with only 25,000), the math isn't as nice as you might imagine. Amazon has very low margins.
- deleted 8y ago[deleted]
- tjr225 8y agoI've never been a big fan of Amazon OR Jeff Bezos' libertarian nightmare - but, seeing it framed like this, in terms of a private entity providing employment for so many people and for little profit makes me question my own beliefs. It's amazing what a little profit at scale adds up to.
- mrguyorama 8y agoFor the vast majority of their logistical staff, $3 an hour more would likely be a substantial raise. Or at least equal to an extra yearly raise.
- angarg12 8y agoBear in mind that hundreds of thousands of those employees are in the fulfillment centers etc. According to my guesstimations, engineering should be 80-60k, which is still a healthy number.
- minimaxir 8y agoThis is the first time in awhile Amazon has disclosed the number of Amazon Prime users. ("exceeded" 100 million paid Prime members globally)
- dastbe 8y agofor scale, there are estimated to be 326 million US citizens and 126 million US households.
- scarface74 8y agoAmazon never discloses numbers - the exact quote is "over 100 million".
- djangowithme 8y agoAs a shareholder, shouldn't you be entitled to information like that?
- chipperyman573 8y agoYou're entitled to know how much they make from Prime, but not the business specifics (you can't extract information from the profit, either, as not all prime costs the same - there is student membership, month-to-month, yearly, etc)
- kgwgk 8y ago> You're entitled to know how much they make from Prime Do you? I don’t think they disclose that.
- PeterisP 8y agoNo, as a random shareholder you're not automatically entitled to all the details. You are, however, entitled to the following three things: 1) Whatever information they provide has to be actually true to the best of their knowledge; so they can be vague or secretive, but "more than 100 million" has to literally mean that; 2) There's a set of core information that you are entitled to, but it doesn't go into as much detail; 3) Shareholders as a whole are entitled to whatever information they want; they can elect a board that will ensure that as much detail as you want gets publicized. But it's not likely that most shareholders in a public company will consider it a worthwhile decision.
- Bekwnn 8y ago"Amazon was also just named the #1 business on LinkedIn’s 2018 Top Companies list, which ranks the most sought after places to work for professionals in the United States." This statement/award strikes me as very far removed from reality.
- swarnie_ 8y agoI would bend over backwards to put a few years worth of Amazon on my CV. I assumed that was common especially in this crowd?
- grivescorbett 8y agoThe 5/15/40/40 vesting schedule is _really_ rough. If given the choice between Amazon and "no-name company," yes, Amazon will do wonders for your resume. But, if comparing an Amazon and Google offer, I'd want a big, big signing bonus from Amazon.
- jhall1468 8y agoAmazon does a 2 year sign on reward, the first year in bulk the second year in monthly increments. No other company does that, but all we ever hear about is the vesting schedule. When all is said and done, Amazon pays a little less than Google/Facebook (the caveat here: most Google/Facebook jobs are in California, not Seattle), but with the stock performance we're seeing, they end up making more on average. The question, is when Amazon's stock stops appreciating so quickly, is other comp going to make up for it?
- grivescorbett 8y agoOh interesting. What precisely is a 2 year sign on reward?
- aluskuiuc 8y agoAmazon has a target compensation for you for your first 4 years, with a cash signing bonus making up for the lack of stock in the first two years, so it evens out. Of course the 5/15/40/40 model only applies to your signing; all further yearly stock grants are over the next 2 years from grant time.
- lifeisstillgood 8y ago"One thing I love about customers is that they are divinely discontent" (my emphasis) OK Mr Bezos, I have to give you points for that one. It's a retailer's philosophy in two words. I could imagine that coming from Jack Cohen or Terence Conran.
- mkempe 8y agoTo err is human, to expect better divine.
- ceohockey60 8y agoSome of my favorite nuggets from this letter: "[H]igh standards are teachable...High standards are contagious" "You can consider yourself a person of high standards in general and still have debilitating blind spots." "To achieve high standards...you need to form and proactively communicate realistic beliefs about how hard something is going to be..." "[A] culture of high standards is protective of all the 'invisible' but crucial work that goes on in every company...doing that work well is its own reward – it’s part of what it means to be a professional."
- deleted 8y ago[deleted]
- staticautomatic 8y agoIf only Amazon as a whole had a culture of high standards...
- askafriend 8y agoWhat you and lots of other people (including me, until very recently) tend to miss is that high standards are one thing. High standards at scale are another. What precedent do we have for standards at such a large scale? How many examples of organizations that have achieved that size do we even have and what do standards across those orgs look like? This applies to software quality at unprecedented scale as well.
- staticautomatic 8y agoI don't believe that high standards inhere in small scale. I have also not read or heard anyone articulate a reasonable explanation for why that is necessarily the case. Figuring out how to operate a business with high standards at scale is arguably the primary job of anyone who operates any business at scale.
- askafriend 8y agoLet me draw an analogy that might be helpful. Let's look at manufacturing yield. It's easy to create a process that hits 99.99% yield when the absolute value of complex goods being produced is 10 items. Can you maintain 99.99% yield when producing 100,000,000 of those items? Almost certainly not. Does hitting 80% yield mean you have lowered your standards when every other manufacturer of similar scale can only hit 60%? No it doesn't. It means you have maintained high standards, it's just the context around you has changed and so the measurement of high standards has changed along with it (as it should). That's the core of what I was getting at.
- toephu2 8y agoI thought this letter provided many a great lessons, up until "we write narratively structured six-page memos." Wow, can any Amazonians speak to this? Sounds like a huge time sink to be writing a 6 page memo instead of preparing a few slides (or writing a 1 page technical design doc)
- Lionsion 8y agoI don't work at Amazon, but narrative memos probably encourage better thinking and communication. PowerPoint often amounts to hand-waving assertions delivered so fast you don't have time to evaluate them.
- phnofive 8y agohttps://www.linkedin.com/pulse/beauty-amazons-6-pager-brad-porter https://www.linkedin.com/pulse/beauty-amazons-6-pager-brad-p... explains it well.
- eigen-vector 8y agoYes, we do write six-page memos. It's not just leadership, even on the engineering side, design documents are six pagers. Contrary to your initial reaction, six-pagers are very effective for both parties—the writer and the reader. You're right in that writing narratives as opposed to making slides takes longer, but that's not inherently a bad thing. Writing a narrative helps me articulate my design well. If I cannot communicate my design via a narrative, it means there are gaps in my understanding/formulation of the same. For the readers, it gives them a coherent understanding of the problem, approach, pros and cons, along with an appendix of material. This helps them to attack the problem with almost as good an understanding of it as the writer—sometimes better, because they come in with some prior knowledge. The writing exercise takes a few months to get good at, but once you're comfortable writing documents, you retain that skill forever. I'm not kidding when I say this practice is something that'll make me stick with Amazon for a long time.
- idoh 8y agoCan you talk about the format of this doc? I did some googling but came up with nothing / a bunch of fluff pieces.
- joemcb 8y ago"We established long-term relationships with many important strategic partners, including America Online, Yahoo!, Excite, Netscape, GeoCities, AltaVista, @Home, and Prodigy." From the year one letter. It's incredible what Amazon has done when you realize who their peers were when they started.
- kaennar 8y agoWhat's really fascinating is hearing about people that work there now that used to work with them in the early stages. I talked to a dude who was in charge of a database tool called Tango back in the day who was worried they wouldn't be able to make the yearly license cost and now he works for them. Technology only grows more fascinating as the titans rise and fall.
- nicodjimenez 8y agoReally well written and engaging as usual. If he ever writes a book I will buy it. His extreme ambition to build the world's most dominant company may get in the way of that, though.
- mjburgess 8y agoAnd Bezos wept, for there were no more markets to disrupt.
- elvirs 8y ago100M prime customers making 5B purchases a year is $2 per purchase for 2 day shipping that costs amazon 5-8 dollars to ship. Considering amazon takes 25% cut from FBA products you can say any product sold for less than $15 is a cash negative sale for amazon.
- jblow 8y agoWait what? Amazon often packs multiple products into the same shipment. I assume each individual product is considered a purchase. And where do you get the $5-8 figure from? I can ship things for that much, so you’d have to assume Amazon gets a discount for massive volume.
- ikeboy 8y agoAmazon charges 3P sellers for the shipping and my understanding is they're basically passing through their shipping costs. For a typical $15 dollar product that's under a pound, Amazon currently charges $3.19 for shipping. Most of those can be shipped first class or even Amazon flex because it's close enough to the customer it can still get there in 2 days, and Amazon can easily pack and ship a light item for $3. If it's over a pound that fee goes to $4.71 currently (in fact the exact cutoff is 12 oz for complicated reasons). I very much doubt Amazon is losing money on any third party sales in general. The one thing they might be is when they provide Amazon funded discounts to customers, although the max they do is 8-9% and I've figured they're giving up referral fee profit rather than losing money.
- slackoverflower 8y agoCredit where it's due. Customers love Amazon and that is what really matters at the end of the day. The people they serve enjoy the service and products Amazon provides. Bezos has very successful worked his way up to become one of the top dogs of capitalism. 20 years is a considerable amount of time work towards a goal, but Bezos was patient and hardworking.
- iosDrone 8y ago"Already today, a portion of our European delivery fleet is comprised of low-pollution electric and natural gas vans and cars, and we have over 40 electric scooters and e-cargo bikes that complete local urban deliveries." Sad to see even the mighty Bezos misuse the word "comprise." The whole comprises the parts!
- 5tk18 8y agoIsn't that what he said? The European delivery fleet is comprised of low pollution cars. Low pollution cars comprise the European delivery fleet.
- kirrent 8y agoI think he's saying that the correct form is: The European delivery fleet comprises low pollution cars, etc. Not "is comprised of".
- CamperBob2 8y agoThe way I always keep it straight is, if the sentence still works with the word "compose," then that's the right word to use, and "comprise" isn't. Whether that's correct depends on what dictionary you choose to cite. Some have given up on this particular battle.
- iosDrone 8y agoGarner's Modern English Usage is the final word on grammar, as far as I'm concerned. Other dictionaries are pathetic postmodern excuses for language guides.
- CamperBob2 8y agoHmm, I don't have that one. What does it say about Bezos's usage of 'comprise'?
- twblalock 8y ago"Comprise" works both ways.
- timeimp 8y ago"Alexa – Customer embrace of Alexa continues, with Alexa-enabled devices among the best-selling items across all of Amazon. We’re seeing extremely strong adoption by other companies and developers that want to create their own experiences with Alexa. There are now more than 30,000 skills for Alexa from outside developers, and customers can control more than 4,000 smart home devices from 1,200 unique brands with Alexa." Meanwhile, Siri recently was able to tell me cricket scores :/
- wmeredith 8y agoThis also had me shaking my head. Siri can’t even play Spotify. Oof.
- Angostura 8y agoAmazon can't even sell Chromecast dongles. Oof. Its as if both companies have parts of their ecosystem they wish to protect.
- kerbalspacepro 8y agoThe difference is that Amazon could sell Chromecast dongles if they wanted; Siri can't do anything
- supernovae 8y agoI'd love it if a colossal waste of resources on shitty voice search was the downfall of giants. I don't get the infatuation with voice skills and the associated tradeoffs.
- jacoblambda 8y agoDespite the issues, I can definitely argue that using alexa has made my life more convenient. A lot of the skills are still awkward to use but I can 100% say that voice control has taken a lot of friction out of certain parts of my life. i.e. music, news, the time, etc while getting ready in the morning or taking a shower.
- Stryder 8y agoIt is 1000% true that /High Standards/ are "teachable, and contagious". But what a company, or indeed, society as a whole set those /Standards/ on matters so much much more than anything else.
- known 8y agoWish he addressed about inhuman working conditions in AMZ
- lemming 8y agoSomewhat OT, but I can totally relate to the handstand anecdote. I've recently been learning to do handstands, and while I knew it was something I'd have to practice, I completely underestimated how hard they are. I mean, kids do them all the time, right? I'd say 6 months of daily practice is probably about right. I've always been impressed by handbalancers, but now that I have some inkling of how hard it actually is, I'm totally blown away by it. Next time you see someone balancing their whole freaking body on one hand (something like 4-10x harder than a two-handed one according to estimates I've seen), stop and marvel for a while, for it is truly incredible.
- jrq 8y agoI don't think high standards are the same as expectations, and it seems obvious to me how that misunderstanding can lead to poor management practice. Some people, given a certain task, max out lower or higher than others. Which is, people have different aptitudes for each task. If the bar to be 'ok' is high enough to where not every person may meet it, and they're truly doing their best, then there's a management problem. You can push people psychologically, and gently, and be within the confines of what I think is considered good management practice. But pushing people physically, and pushing them in a way that's mechanical, like a global quota, that's harmful to a person. Just simply falling short of something and hearing "well, you fucked that up, don't let that happen again." instead of "hey, you're fucking up, do you need help? Is there anything wrong?" is enough to almost ensure that the person will fall short again. It's cliche to say that honey catches more flies than gall, but damn if it isn't true. However, starving the flies until gall is all that's left is diabolical. Sorry for rant, but I've lived like those DC workers are living, and its not pleasant.