Jeff Bezos is one of the wealthiest men in world history, with a personal fortune of $205 billion. The American entrepreneur behind Amazon, AWS, Blue Origin and several other successful ventures is widely regarded as one of the most brilliant entrepreneurs of all time. Amazon, the firm he started in 1994, has an estimated value of $1.7 trillion and is the world’s biggest e-commerce website, with multiple subsidiaries worldwide. For any entrepreneur, the story of Jeff Bezos and his incredible success can serve as valuable inspiration.
Jeff Bezos was born in the city of Albuquerque, New Mexico, in 1964 and graduated from Princeton University in 1986 with a degree in electrical engineering and computer science. Bezos began his career working on Wall Street, the US’s financial centre. However, in 1994 he founded Amazon, which began its life as an online bookstore but soon expanded to sell various e-commerce products and services. The website allowed customers to buy practically anything they could ever desire in the so-called ‘everything store’.
Bezos’s other companies are also worldwide successes, with Amazon Web Services being one of the world’s most excellent cloud computer and artificial intelligence providers. Meanwhile, his Blue Origin aerospace business has recently begun providing suborbital space flight tourism.
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If you are thinking of starting your own business, there is a lot you can learn from this inspirational corporate leader. Here are five lessons for every entrepreneur from Jeff Bezos.
In this blog we will explore;
Follow The Regret Minimisation Framework
How do you decide to quit a secure job and launch a business that may or may not work out as planned? For Jeff Bezos, the answer can be found in his philosophy, which he describes as the ‘regret minimisation framework’.
Early in his career, Bezos realised that the Internet was likely to transform the world in the coming years, and he decided to quit his safe job working on Wall Street and set up Amazon, which started life as an online bookstore. This was a bold move; almost no one had done anything like this at the time. But for Bezos, taking the decision was easy.
Bezos suggests would-be entrepreneurs should think about how they would feel at the age of 80 when they look back on their life. Bezos has said: “I want to have minimised the number of regrets I have”. By launching Amazon, Bezos was convinced he would not regret the decision when he turned 80 – even if it didn’t work out.
How Can You Use This? The regret minimisation framework can help guide your decision-making if you consider setting up your own business. Will you regret starting your own business? While launching your own company can be scary, there’s an even bigger chance that you would regret staying in an unsatisfying yet safe job throughout your career.
Be Customer-Obsessed
Since its first launch, Amazon has expounded a philosophy of customer obsession. The firm is continually looking to find ways to improve the customer experience. This isn’t just about giving people good quality service, but it is instead about creating a product or service that people cannot live without.
Bezos has explained that from the beginning, Amazon was always about giving customers incredible value – whether offering free deliveries, offering next-day delivery or improving its product recommendation algorithm.
How Can You Use This? Being customer obsessed is constantly thinking about how your products or services directly benefit and deliver value to your target audience. It is about relentlessly seeking ways to improve the customer experience and never sitting on your laurels. It is also about listening to feedback and proactively doing things which make your customers’ lives easier.
Make Your Value Exceed All The Costs
To understand the scale of Amazon’s success, it is important to consider how the Internet worked in the mid-1990s. At the time, there were many barriers to buying on the Internet – dial-up connections were slow, e-commerce websites were new and untrusted, and many people couldn’t see the benefit of ordering something online rather than buying it at a brick-and-mortar store instead. For many people, going online was an honest effort, so Amazon needed to convince them that it would be worth it.
And this is what making your value exceed the costs is all about.
Amazon focuses on offering low cost, fast delivery, enormous selection, and convenience to all customers using its services. The idea was to become the most compelling option for customers. This value helped overcome many people’s reticence about shopping online – and the rest is history.
Over time, Amazon has ensured its value exceeds the costs several times. For example, the Amazon Prime streaming service initially cost $79 per year and required upfront payment. This was a big ask, but customers could see the value exceeded the cost. Prime came with perks, such as free delivery on purchases, which made it seem like a worthwhile investment. Thanks to this innovation, Amazon has retained huge numbers of loyal customers, so many instinctively turn to its website before looking for products elsewhere on the Internet.
How Can You Use This? Whatever kind of company you are setting up, you need to take the time to consider all the potential obstacles that customers will see when it comes to using your products or services. Whether location, time, price, or anything else, you need to understand the barriers they will perceive when using your products or services. You will then need to find ways to eliminate those barriers or show that the value you offer exceeds those costs.
Fear Customers, Not Competitors
Jeff Bezos once famously said businesses shouldn’t be afraid of competitors because they won’t send you money. Instead, avoid customers “because those are the folks who have the money”.
Bezos was trying to say that if businesses spend too much time worrying about what other companies are doing, they may lose sight of the people who matter.
How Can You Use This? While some competitor analysis can be useful when running your company, you ultimately want to focus most of your attention on your customers, their wants and needs. Learn what they expect from your business and ways you can delight them. By focusing on your customers – not your competitors – you’re much more likely to succeed.
Focus On The Long Term
Many businesses, especially those that go public, are continually under pressure to deliver results to their shareholders every quarter. While running Amazon, Jeff Bezos certainly experienced this pressure from investors who wanted a quick return – rather than thinking about long-term profitability. Nevertheless, Jeff Bezos always focused on the long term, which meant that he sometimes made investments that didn’t initially pay off but which, in the long run, would lead to much greater revenue.
For instance, the Amazon Prime Video streaming service initially lost Amazon money and only started to pay dividends many years after the initial launch of the service. This long-term profitability would not have been possible if Bezos only focused on short-term targets.
How Can You Use This? Be prepared to make investments or structural changes which don’t initially bear fruit. By sticking to your vision, you can expect long-term growth.
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