What we can learn from Jeff Bezos’ 1997 letter to shareholders

Valuable lessons to implement as leaders and entrepreneurs

Jenna Felsen
5 min readAug 13, 2021

24 year ago when he took Amazon public, Jeff Bezos told everyone exactly what Amazon was going to do in his 1997 Letter To Shareholders. It serves as a great playbook for building a great company, and in addition, it illustrates a few life principles to live by.

1. The words you use matter.

In Bezos’ 1997 letter to shareholders, he repeats the word ‘customer’ 25 times in a ~1,500 word memo. If you sum the word ‘customer’ out of all of Bezos’ 23 shareholder letters, it appears a whopping 443 times. By way of comparison, the word “Amazon” appears 340 times. Bezos has always made one thing clear; the customer matters most. While he clearly defines customer-centricity as Amazon’s motivation behind everything it does, I believe this operating procedure should be at the epicenter of everything we do. When we place other’s needs above our own, we are wildly more successful than going it alone. Not only can others encourage and inspire you, they can also mobilize and connect you to opportunities you never knew existed outside of your sphere of influence.

Another interesting point Bezos explains is the customer’s direct impact on competitors. While all businesses tend to be competitor-focused, Bezos directs his energy on impressing and listening to his customers. In doing so, beating out competitors becomes a natural outcome. He states:

“As regular readers of this letter will know, our energy at Amazon comes from the desire to impress customers rather than the zeal to beat competitors. We don’t take a view on which of these approaches is more likely to maximize business success.

There are pros and cons to both and many examples of highly successful competitor-focused companies. We do work to pay attention to competitors and be inspired by them, but it is a fact that the customer-centric way is at this point a defining element of our culture.”

When we focus on meeting the needs of others, they meet the needs for us. The innate desire we have to compare our performance to others falls by the wayside when our altruism outshines the self-seeking tendencies that seem to deafen the business world.

2. Conviction is key — deep rooted obsession to the untapped value you have towards your mission.

While your mission does not have to be, “obsessing over customers”, there is something to be said about clearly stating your purpose and executing on it. When your ‘why’ becomes the center of what you do, you are better able to stay consistent, create value, and generate lasting results you are proud of. See bullet #4 for more on creating an unwavering personal brand.

3. You can’t be a clear thinker without acknowledging trade offs.

In evaluating the historical performance of Amazon, Bezos is confident in recognizing the risks of becoming a leading online retailer turned tech behemoth. By acknowledge the trade offs and risks when scaling a corporation, Bezos recommends looking for long term cash flows; not optimizing short term profit:

“Because of our emphasis on the long term, we may make decisions and weigh tradeoffs differently than some companies [….] We will continue to focus relentlessly on our customers.We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions. We will balance our focus on growth with emphasis on long-term profitability and capital management. At this stage, we choose to prioritize growth because we believe that scale is central to achieving the potential of our business model.”

The same can be said when applying this rule to your career, or any long-term goal for that matter. Remember — no job is going to be everything you want it to be (if you found the perfect job where you love every single task you do, let me know!), so it’s important to acknowledge the trade offs and ask yourself:

  • Does my job challenge me? Am I learning new skills that are transferrable to the next opportunity I see myself in?
  • Am I working with people that motivate and inspire me?
  • Does my current role lead to upward mobility? Am I working in a field I enjoy and see doing long-term?

If the answer to any of these questions are “no”, maybe it’s time to weigh the cost-benefits, just like Bezos did in 1997.

4. Be an incredible expectation setter.

The #1 failure of leaders is to overpromise / misarticulate and under-deliver. One of the most important things you can do as a leader is to outline clear expectations — both in your work and your core values. When you keep your expectations aligned and consistent with your team (i.e., managers, co-workers, customers, friends, family), there will be no doubt in their mind who to depend on. Near the conclusion of his letter, Bezos emphasizes the importance of human capital to drive the company forward. Addressed more thoroughly in his 1998 letter, Bezos asks three thought-provoking questions when sourcing remarkable leaders, which I believe we should be asking ourselves during the expectation-setting process:

  1. Am I someone people can admire?
  2. Do I raise the average level of effectiveness of the group?
  3. Along what dimension might I be a superstar?

While written over two decades ago, it is incredible to observe Amazon’s wildly successful performance, all while staying true to their original business model. Even through series of business model iterations, rapid technological advancements, and dozens of business ventures, Amazon kept customers at it’s core in order to optimize cash flows, retain top talent, and minimize the threat of competitors. While it may seem abstract to compare our personal operating models to that of Amazon, the core themes taken away from Bezos’ letter withstand the test of time. Define your north star, set high standards, calibrate realistic processes to achieve those standards, and your results will follow.

To read Bezos’ full 1997 letter to shareholder’s, see here.



Jenna Felsen

Empowering young people through dreaming, doing, and discovering.