Jeff Bezos Discusses the Long-Term with Amazon

Amazon founder Jeff Bezos is well known for leading for the long-term. We revisit a discussion he had with HBR a few years ago about how important it is to be clear about your offerings quoting the words of Warren Buffett:

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You can hold a rock concert, and that’s OK. You can hold a ballet, and that’s OK. Just don’t hold a rock concert on and advertise it as a ballet.

As a result, Bezos explained that thinking in the long-term helps to ensure the company is better aligned with the interests of both customers and shareholders. And, a long-term perspective is essential for inventions and new methodologies. A short-term aspect wouldn't provide much leverage for those types of things.

Bezos was asked about his statement on planting seeds that may take seven years to bear fruit. He responded by stating that devices and services such as Amazon Prime, the Kindle, and Amazon Web Services would not have come to fruition without the years they needed to germinate.

On the other hand, if Amazon needed to see financial results in three years or less, some of their most popular offerings may not have even been launched. When asked whether he cares about his share price, Bezos responded that while he does not follow Amazon's stock daily, he does care about the long-term share price and the share owners.

He just doesn't find it valuable to check the stock price every day. The objective is build a company with a long-term weighing machine. He wants his company to be weighed on, not voted upon. Then, Bezos was asked about the value of staying in the hardware business.

Bezos responded that their approach to the Kindle devices is to sell at a near break-even, but, have a relationship with the customer where they purchase digital books, music, apps, games, and TV shows from Amazon. Bezos also stated he was doing this interview to convey Amazon's principles, and how they operate, to their customers.