Why Playing It Safe Is the Riskiest Thing a Founder Can Do (The Jeff Bezos Principle Nobody Applies)
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Why is unwarranted risk aversion a threat to business growth?
Most people think Amazon won because Jeff Bezos got lucky. He didn't. He followed a system and he wrote it down for over 20 years in every single letter he sent his shareholders. My guest today, Steve Anderson, read all of them. Then he pulled out 14 growth principles that explain how a company that lost money for a decade became one of the most valuable on earth. We get into the one most founders get wrong. Bezos called it unwarranted risk aversion. The idea that playing it safe is the most dangerous move you can make. We talk failure as a strategy, obsession over the customer, and why Bezos ended every letter the same way. It is always day one. If you are building something and you feel stuck, this one is for you.
Let's unlock it.
So Steve, welcome to the show. I know you spent many years, I mean, I'm going to say your whole life discovering, but many years looking at Jeff Bezos and really what he did and how he's accomplished, I mean, so much. I know you wrote this book called the basil letters.
What 14 growth principles did Jeff Bezos emphasize?
I'm looking here on Amazon, thousands of reviews, you know, a bestselling book. I mean, I'm so excited to jump in and see. I am too. And thanks for having me on the show. So for everyone listening, just even just right now, tell us a little bit of like who you are and how did you even come to this idea or how'd you find this, uh, this concept? So I will start off by saying I stumbled into it. My background is the insurance industry. I spent my career there. Early on, selling insurance to individuals and to businesses. Kind of midway through that, I got intrigued with the technology piece. So agents using websites and all of that. And I kind of lived through all of those technology changes from, you know, the internet to websites to social media to, you know, et cetera, and now certainly AI.
But along the way, I was consulting with insurance agents and I think we all realize that technology continues to develop really rapidly, more so now than ever, I would say.
How can experimentation drive innovation in business?
But even 20 years ago, it seemed fast. And so I started this idea of thinking about this idea that the biggest risk businesses face is actually not taking enough risk. You know, sitting back, let me wait a few years. I don't know if this internet's going to be anything. And at that time, you could do that. You know, certainly today, much, much harder. So I started looking at companies in general and something I did pretty effectively, I would say, is look outside the insurance industry for ideas and trends and where things are going. Because the insurance industry tends to be very conservative and slow to adopt. So I looked at companies that had once been very successful and were gone, out of business, and companies that had been successful and continue to be successful and trying to understand what's the difference, why one company did this and the other company wasn't able to.
During that research, came across Amazon, had sort of heard and read maybe one or two of the letters to shareholders that Jeff Bezos wrote about Amazon, but started getting deeper. And at one point, read every letter that he had published to that point, probably through that, at this point, it was probably 2017, and read them one after the other as a narrative and realized that, there were trends that he talked about in the letters. And really the trends that caught my attention were how he grew Amazon and how Amazon was able to be successful and continue to be successful. So that's kind of what the hook that got me. And then I had this brilliant idea to create Allegiant, right?
What does customer obsession mean for successful companies?
Here's some great takeaways from Jeff Bezos, I don't even know if he was a billionaire at that point, probably. But obviously successful. Amazon continues to grow. Here's some things you can learn wherever you are in your business journey, from startup to 50 employees to 500 employees, et cetera. So I created a one-page executive summary of all the letters to that point. Fortunately, my wife is in the book publishing business. And so I was pretty excited about this.
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Chapters
8 chapters
1
Why is unwarranted risk aversion a threat to business growth?
0:00–1:20
2
What 14 growth principles did Jeff Bezos emphasize?
1:20–2:35
3
How can experimentation drive innovation in business?
2:35–4:30
4
What does customer obsession mean for successful companies?
4:30–5:28
5
How does complexity impact competitive advantage?
5:28–6:57
6
What is the significance of the Day One mentality?
6:57–8:00
7
How does AI fit into the future of business according to Bezos?
8:00–9:35
8
What final advice would Jeff Bezos give to future entrepreneurs?
9:35–42:35
Speakers
3 identifiedMore from The Vault Unlocked
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