CEO Jeff Bezos claims Amazon needs to fail more

Amazon CEO Jeff Bezos recently published his annual letter to shareholders in which he mentioned that the company needs to experience some more failures in order to see success.

In his annual letter, Bezos mentioned that Amazon’s biggest success have come from its failures. Without failures, there is no success and thus, he believes Amazon should go through more of these ‘multibillion-dollar’ missteps.

“Amazon will be experimenting at the right scale for a company of our size if we occasionally have multibillion-dollar failures,” Bezos wrote in the letter. “Of course, we won’t undertake such experiments cavalierly. We will work hard to make them good bets, but not all good bets will ultimately pay out.”

CEO Jeff Bezos acknowledges Amazon will one day ‘fail, go bankrupt’

Bezos, who is the world’s richest man, mentioned that as the firm continues to grow, everything would need to scale including the size of failed experiments. “If the size of your failures isn’t growing, you’re not going to be inventing at a size that can actually move the needle.”

Bezos mentioned some of the failures the company went through such as the launch of Fire Phone in 2014, which turned out to be Amazon’s biggest financial failure, but the company took its learning and found success with its smart speaker Echo and digital assistant Alexa.

“The good news for shareowners is that a single big winning bet can more than cover the cost of many losers,” he said. Bezos always attaches a copy of the first letter from 1997 to showcase how much progress has been made and to remember the ideology that launched the firm from ‘Day 1’.

Apart from wishing for more failures, Bezos also highlighted the growth in Amazon’s third-party sellers, detailed struggles behind building its cashier-less Amazon Go stores, and talked about the origins of Amazon’s cloud computing service, AWS.

Concluding his letter, Bezos challenged its top retail competitors, without mentioning specific names, to match Amazon’s employee benefits and its $15 minimum wage. “Do it! Better yet, go to $16 and throw the gauntlet back at us. It’s a kind of competition that will benefit everyone.”