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Starting and building

Jeff Bezos

The flywheel

Jeff Bezos (United States · 1964–) — The flywheel.

Starting and buildingModernThe flywheel

What actually happened?

In 1994 he was a vice-president at a New York hedge fund and wanted to leave and sell books online. His boss told him it was a good idea, but a better one for somebody who did not already have a good job. So he invented a way to decide: project yourself to eighty and look back — which choice would you regret? He knew at eighty he would not remember a bonus he gave up in 1994, and would mind very much never having been part of the internet at all. He resigned within days. What makes the frame sharp is that it changes the timescale of the question by force, and once the timescale moves the answer surfaces on its own.

Regret minimisation

For decisions large enough to define a stretch of life, shift the vantage point to eighty. Short-term losses — salary, standing, safety — shrink automatically from there, and the things that turn out to matter, whether you tried, whether you were there, enlarge automatically. It is built for the fork between safe and unremarkable and risky and alive.

The offer you keep re-reading at midnight is not a spreadsheet problem. Run it from eighty and it usually stops being close.

The flywheel is slow before it is fast

Lower prices bring customers, customers bring traffic, traffic brings sellers, scale lowers cost, and cost lowers prices again. No first step and no last one. The part people underestimate is the beginning, where it is heavy, exhausting and appears to do nothing — which is where almost everyone stops.

Find the loop where each turn makes the next one easier, then accept that the first two years will look indistinguishable from failure.

Your margin is my opportunity

Every comfortable high margin in an industry is a door held open for an attacker. He compressed his own margins deliberately to leave nothing worth attacking. Turn it around as a self-check: whatever you are earning comfortably from is precisely what somebody is currently aiming at.

The product line nobody wants to touch because it funds everything else is the one a competitor is already modelling.

How do I use it today?

Sort your decisions by whether they can be undone: the reversible ones move fast and low, the irreversible ones get the meeting. Before starting anything new, write the press release you would publish on launch day — if you cannot make it exciting to a customer, do not start.

Deep read

Always Day 1What Day 2 looks likeDay 2 is stasis, then irrelevance, then decline, then deathBet on what will not changeThe question almost nobody asksNobody will ever ask for higher prices and slower delivery

Read alongside

Steve JobsOne cut the range to four; the other refused to stop adding — both were right about their own business. Mao ZedongOpposite readings of what to hold steady. Bezos says bet on the need that will not change in ten years; this says the governing problem is different in every stage and yesterday's priority is how people die. The Innovator's DilemmaBezos ran Christensen's remedy deliberately — AWS was built outside the retail body, and that independence is what allowed it to be small.

Further

Warren Buffett Elon Musk Steve Jobs Paul Graham Peter Drucker Andy Grove

Lines to keep

If you think three years out you have many competitors. Think seven and you have few.

Failure and invention are inseparable twins.