On You Tube there are many videos and some you can learn from. One video is the CEO of Amazon Jeff Bezos who was interviewed at the Internet Association Gala on May 8th in Washington, DC.

Amazon started with books over the internet but has branched out over the past 22 years to a variety of other features and that is why the company’s stock remains a growth stock. The consumer side started with books and moved to hundreds of thousands of items; the company warehouses and distributes for 3rd Parties (from small business doing $100,000 in revenue to Nike); they tie the previous two to Amazon Prime which has 100 million subscribers; they do web and sever hosting and involved in the entertainment business.

Mr. Bezos talks about customer obsession which is trying to constantly try to figure out what customers want and will pay for. The customer obsession is different than other companies who can be competitor obsession (who is your competitor and what are they doing which works and how do you copy?); there is product obsession; business model obsession; technology obsession or how is the company centered.

The customer obsession has a number mirrors such as the company eager to invent or pioneer. It is not only important to listen to the customer but try to invent on behalf of the customers. The trick is the customer has to see the value and willing to change to do the invention. Some of the inventions will fail. The key is the company has to embrace and learn from the failures – Mr. Bezos says It is not invention or pioneering if you know the answer already. You have to start with the unknowns, sometimes the ideas need other things to make it work, but you keeping trying to make your customers life easier.

The third aspect of customer obsession and failure is think 3 to 5 years out or long term rather than the next quarter.

To do the customer obsession Amazon has 3 big ideas (in reality they are simple and obvious and Mr. Bezos says if they are not obvious there is something wrong. The ideas should have no time limit) The 3 big ideas for Amazon are low prices, fast service and vast selection. One can see how over time the directions of Amazon fit in.

In the interview, Mr. Bezos showed an example of how theses ideas link together. Amazon sells everything over the website, they ship to customers. Some of the products were wrapped tightly in packaging, Amazon really did not like and asked the manufacturers why the packaging? The real answer for display purposes so people could see the products at the store. Amazon has no stores, they asked for less packaging which cut costs which allowed customers faster delivery – it was easier to open. They also saved tons of packaging going to the waste facilities. Another example is solar panels – all the distribution/warehouses roofs will have solar panels – it saves money but generating electricity and is a cleaner source. That has been both cost savings and long term thinking.

Linking to dividend paying stocks, when you read the President message in the Annual Report the above is what you are looking for. At the core what do people come to work to make money in their company. What directions is the company headed? The President’s message will give you an idea of how the company should be doing. Look for the 3 big ideas of the company.

There are more questions than answers, till the next time – to raising questions.