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Steve Jobs on the most important job of a CEO
“The greatest people are self-managing. They don’t need to be managed. Once they know what to do, they’ll go figure out how to do it… What they need is a common vision, and that’s what leadership is. Leadership is having a vision, being able to articulate that so the people around you can understand it, and getting consensus on a common vision.”
Steve continues:
“We wanted people who were insanely great at what they did… and the neatest thing that happens when you get a core group ten great people is that it becomes self-policing as to who they let into that group. So I consider the most important job of someone like myself is recruiting.”
Marc Andreessen explains why AI might be the end of James Burnham's "managerial society"
In his book The Managerial Revolution, Burnham divided capitalism into two phases.
The first phase was what he called "bourgeois capitalism"
"Think of this as name on the door -- it's Ford Motor Company because Henry Ford runs the company. It's a dictatorial model and Henry Ford just tells everyone what to do. He said the problem with bourgeois capitalism is it doesn't scale because Henry Ford can only tell so many people to do so many things."
The second phase was what Burnham called "managerial capitalism", which was Marc describes as, "the creation of a professional class of managers that are trained -- not to be car experts or experts in any particular field but to be experts in management. And then that led to business schools and management consultant firms and all these things."
Marc continues:
"You look at every big company today and most executives at most of the Fortune 500 companies are not domain experts in whatever the company does. And they're certainly not the founders of those companies. They're professional managers. And in fact, over the course of their careers, they'll probably manage many different kinds of businesses. They might work in healthcare for a while and then work in financial services and then go work in something else."
"What Burnham said was that transition was absolutely required because the problem with bourgeois capitalism is it doesn't scale... So if you're going to run capitalist enterprises that are going to have millions to billions of customers, they're going to be operating at a level of scale and complexity that will require this professional management class."
Burnham acknowledged that this professional management class has its downsides -- they're not as inventive and not going to come up with the next breakthrough. But whether you think that's good or bad, that's what's going to be required.
And basically that's what happened. Marc continues:
"Managerialism basically took over everything. What I'm describing is basically how all big companies run and how all governments run and how our large-scale non-profits run."
Marc believes venture capital is a protest movement to that -- backing founders under the Henry Ford model, and trying to find the next Elon Musk or Steve Jobs who can out-innovate the incumbents.
"I've always viewed my entire life as: we're raging against the dying of the light. We're constantly trying to fight off managerialism from swamping everything and everything getting boring, gray, dumb, and old."
But AI may now offer a third model. Marc explains:
"Maybe the new Henry Ford, Elon Musk, or Steve Jobs + AI is the best of both because it's the spark of genius of the name on the door model but gives that person AI superpowers to do all the managerial stuff... What's the thing these bots are really good at? They're really good at doing paperwork, writing reports, and doing all the managerial work."
"The challenge is going to be for the innovators to figure out how to leverage AI to actually do this."
"The other challenge is going to be for the incumbents that are managerial to figure out: what does that mean? Because now they're going to be facing a different kind of insurgent competitor that has a different set of capabilities than they're used to."
"I think this is going to force a lot of big companies to figure out innovation - figure out innovation or die trying."
Ben Horowitz elaborates on this point further in his article Databricks & the Future Firm below.
Video: @latentspacepod (Apr 2026)
Ben Horowitz to Databricks founders: "I'm not going to write you a check for $200,000. I'll write you a check for $10 million."
When Ben first met them, they were six PhD students and their professor.
"What they had was this thing called Spark, and the competitor was something called Hadoop. Hadoop had very well-funded companies already running toward it... so the clock was ticking."
For professors and academics, Ben says, "it's a pretty big win if you start a company and make $50 million. You're a hero on campus... So I'm always a little nervous about a company that comes out of academia thinking too small."
"I'm not going to write you a check for $200,000. I'll write you a check for $10 million," he told them and then explained why:
"You need to build a company. You need to really go for it if you're going to do this. Otherwise you guys should stay in school."
In August, Databricks surpassed a $7 billion run rate, growing at 80% YoY and was valued at $190 billion.
You can read Ben's full profile on Databricks below.
Video: @lennysan (2025)
Marc Andreessen on why we shouldn’t encourage people to be entrepreneurs
“The idea of being an entrepreneur has been a romanticized concept. There used to be TV shows talking about how fun it was. And people ask questions, ‘How do we encourage more people to be entrepreneurs?’ And my answer was always: no, we shouldn’t do that. People shouldn’t be encouraged to do something that painful. They should do it because they really want to do it. In fact, they should do it because they can’t not do it.”
Marc continues:
“It’s tremendously painful. Most of the experience of being in business as a startup is being told no. You need all these things: employees, financing, customers. Then you go around all day long asking people for those things and they tell you no. Half the time they don’t even respond. And then just when you think you get it working, a new competitor emerges and just starts punching you square in the face. The minute you think your product is working, there’s a problem in it, and you have to do a recall. It’s just this constant rolling horror story.”
Source: @ChrisWillx (Dec 2024)
Palmer Luckey explains why founders need to “make themselves obsolete”
“When I started Oculus, I thought I was really good at everything… But I was only the best at a lot of things in our company because I had been negligent in my hiring process.”
For example, Palmer was the best optical engineer in the company, but he realized that wasn’t something to be proud of.
“That was a failure. I failed my company and my investors by making myself a critical dependency for any of our products. And the reality is I’m actually not a very good optical engineer. I was just the best at Oculus.”
Once you start scaling your company, Palmer advises founders:
“You have to make it your goal to make yourself obsolete, even at the things you like doing.. And that was really tough for me at Oculus because I realized I was basically playing house. I was sitting around doing things that way better people could be doing faster, more effectively.”
He continues:
“I give my managers the same mindset. I say, ‘Hey, your job is not to do things. It is to get them done in the best way possible. If that means you do it, then you need to do it… If that means that somebody else needs to get hired to do it, that’s what you need to do—even if you like doing it.’”
Elon Musk on how to choose what to work on
“I don’t think everything needs to change the world. There’s lots of useful things that people do, and I think it should really be like a usefulness optimization.”
For anyone trying to figure out what to work on, Elon suggests asking yourself, “Is what I’m doing as useful as it could be?”
He continues:
“Even if something isn’t changing the world but it’s making people’s lives better, I think that’s great.”
Elon gives the example of an app that makes people’s lives only slightly better - the area under the curve of the usefulness optimization is quite good if it’s affecting a lot of people.
Source: @Stanford (Dec 2015)
Peter Thiel: PayPal was voted one of the 10 worst business ideas in 1999
“When we started PayPal, the initial product was an infrared-beaming device on Palm Pilots for sending money. It was voted one of the 10 worst business ideas in 1999. And 1999 was a year when there were many bad ideas in technology… But the team was good."
He continues:
"People have a lot of latitude making up for mistakes, pivoting, and changing. It’s not like you only get one chance. You get many chances so long as you keep trying. If you get hung up on failure, and if you think you don’t have another chance, that’s when you really don’t.”
One lesser-known fact about the PayPal pivot is that the idea didn’t come from the cofounders, Peter Thiel and Max Levchin.
It came from David Sacks who was fresh out of Stanford Law School and a one year stint at McKinsey. Sacks was the one who finally persuaded a reluctant Levchin that beaming money between Palm Pilots was a bad idea. Instead, he argued, they should focus on sending money via email.
A talented team and getting multiple shots on goal turned out to be the difference between startup failure and a $1.5 billion exit to eBay.
Source: @CBSNews (May 2012)
Ben Horowitz: Every founder experiences doubt — even Mark Zuckerberg
“Congratulations on betting on yourself,” a16z co-founder Ben Horowitz tells an audience full of founders. “Your job is to make your bet payoff. You believed in yourself enough to do it, and there are going to be many times when you question that bet. But that gets you nothing.”
Ben offers the following advice:
“You just have to do your thing, keep going, and focus on what you can do. The doubts are going to be there, but ignore the doubts. The worst doubts aren’t the ones people put on you; they’re the ones that you put on yourself. Every entrepreneur has them. I spent a lot of time with Mark Zuckerberg when he was 22 years old, and he had tremendous doubt about whether [Facebook] was going to make it. Everybody has that.”
He continues:
“It’s not what you feel. It’s what you do. So just focus on what you do. You’re going to feel scared. If your guts aren’t boiling, you’re not even trying at these things. Don’t worry about it.”
Source: @speedrun (Oct 2025)
Sam Altman on the importance of momentum and why burnout doesn’t come from working too hard
“I was told, and I thought for a long time, that you get burned out from working too hard. At least in my own experience, what I’ve found is that burnout actually comes from failing and things not working.”
Sam continues:
“Momentum is really energizing. The lack of momentum is super draining. And I find that I have infinite energy to work on things that I find interesting and that are working, and almost none to work on things that I either don’t find interesting or aren’t working.”
He offers the following advice to startup founders:
“I think you see a lot of founders try something and fail, and they assume that they just can’t work hard enough or don’t have enough energy or passion or whatever. And that’s actually not true. It’s just that that thing didn’t work. And what you should do is shut that company down, go on vacation, and try again.”
He concludes:
“When you look at really successful people and say, How do they get all those things done? It’s that they have the benefit of momentum. And momentum is energizing.”
Source: @ycombinator (Sep 2016)
Startup Archive retweeted
Lift vs Runway
Well said. @rabois is dead on here. Every founder needs to understand and internalize the concept of lift vs runway. Most investors and founders over focus on runway.
Keith Rabois: “I tell founders not to worry about runway. Worry about lift.”
“If you think about lift in a plane context, a company is only valuable if you achieve lift. Runway is a tactic for achieving lift, and you may need to extend the runway so that you have more time to get lift. But unless you’re actually achieving lift with that extra time, it doesn’t help you.”
Keith continues:
“I hate when a founder is like, ‘I want to raise this much money because it gives me two years runway.’… That is a stupid way to think about your fundraising.”
Instead, founders should ask themselves what they need to achieve to achieve lift, and then work backwards from that.
When Keith invests at Khosla Ventures and Founders Fund, they write internal memos about the three key risks to the company. Usually you can’t achieve all three in one financing, so founders should be asking themselves, What’s the most important inflection? And then structure their financing to achieve that.
Keith advises founders that it’s ok to let their runway go very low if they feel like they’re approaching lift:
“A lot of founders get very bad advice like ‘Oh, you need to have this much runway or you won’t be able to raise money from strength.’ That’s nonsense. If you have traction - if you hit a viral coefficient of 1 with three months of runway - almost every VC on the planet knows how to invest in that company, and it will not be a problem.”
Source: @khoslaventures (Aug 2024)
Keith Rabois: “I tell founders not to worry about runway. Worry about lift.”
“If you think about lift in a plane context, a company is only valuable if you achieve lift. Runway is a tactic for achieving lift, and you may need to extend the runway so that you have more time to get lift. But unless you’re actually achieving lift with that extra time, it doesn’t help you.”
Keith continues:
“I hate when a founder is like, ‘I want to raise this much money because it gives me two years runway.’… That is a stupid way to think about your fundraising.”
Instead, founders should ask themselves what they need to achieve to achieve lift, and then work backwards from that.
When Keith invests at Khosla Ventures and Founders Fund, they write internal memos about the three key risks to the company. Usually you can’t achieve all three in one financing, so founders should be asking themselves, What’s the most important inflection? And then structure their financing to achieve that.
Keith advises founders that it’s ok to let their runway go very low if they feel like they’re approaching lift:
“A lot of founders get very bad advice like ‘Oh, you need to have this much runway or you won’t be able to raise money from strength.’ That’s nonsense. If you have traction - if you hit a viral coefficient of 1 with three months of runway - almost every VC on the planet knows how to invest in that company, and it will not be a problem.”
Source: @khoslaventures (Aug 2024)
Jeff Bezos explains what it means to disagree and commit
“Disagree and commit is a really important principle that saves a lot of arguing.” Jeff Bezos begins. “In society, and inside companies, we have a bunch of mechanisms we use to resolve disputes. And a lot of them are really bad. An example of a really bad way of coming to an agreement is compromise.”
He continues:
“The advantage of compromise as a resolution mechanism is that it’s low energy, but it doesn’t lead to truth… You shouldn’t allow compromise to be used when you can know the truth.”
Another bad resolution mechanism is the more stubborn person winning:
“You have two executives who disagree and they just have a war of attrition. And whichever one gets exhausted first, capitulates to the other one. Again you haven’t arrived at truth and it’s very demoralizing.”
Jeff tells people on his team to never get to a point where you’re resolving something by who gets exhausted first:
“Escalate that. I’ll help you make the decision.”
When making decisions, you want to get as close to the truth as possible:
“Exhausting the other person is not truth-seeking. And compromise is not truth-seeking.”
But there are a lot of cases where no one knows the real truth and that’s where “disagree and commit” comes in:
“Escalation is better than war of attrition. Escalate to your boss and say ‘we can’t agree on this. We like each other and respect each other, but we strongly disagree with each other and need you to make a decision so we can move forward.’ Decisiveness and moving forward on decisions as quickly as you responsibly can is how you increase velocity. Most of what slows things down is taking too long to make decisions.”
Companies tend to organize hierarchically in which the more senior person ultimately makes the decision. But as Jeff explains, that wasn’t always the case—he would often be the one to disagree and commit:
“I would often say: ‘You know what, I don’t think you’re right. But I’m going to gamble with you and you’re closer to the ground truth than I am. I’ve known you for 20 years—you have great judgement. I don’t know that I’m right either—all of these decisions are complicated. Let’s do it your way.’ But at least then you’ve made a decision, and I’m agreeing to commit to that decision. I’m not going to be second guessing it. I’m not going to be sniping at it. I’m not going to be saying ‘I told you so.’ I’m going to actively try to make sure it works. That’s a really important teammate behavior.”
Source: @lexfridman (Dec 2023)
The founder of Pinterest on what surprised him the most when starting a company
“It can take a really, really long time to build things that are worthwhile.”
Ben Silbermann describes just how demoralizing things were in the beginning of building Pinterest:
“In March 2010, we launched Pinterest and were at 3,000 accounts. And that wouldn’t have been so bad if we hadn’t started building Pinterest in November 2009. And that wouldn’t have been so bad if I hadn’t left my job to start a company in May 2008.”
A lot of people will compare startups to running a marathon, but Ben disagrees:
“The part of the analogy that’s right is that it’s long. But it’s actually really different. When I think about my experience, it’s more like going on a roadtrip in a car that doesn’t have very good headlights and you don’t have much gas and you think you’re going to Toledo, but you find out you’re supposed to be in Miami and if you really have to buy gas you might have to buy gas from someone who might just kick you out of your own driver’s seat.”
He continues:
“That uncertainty and the fact that every single day you’re dealing with a lot of choices and you don’t have perfect information is the lesson for me that was hardest to learn and continues to be a real challenge in doing a startup today.”
Source: @ycombinator (Oct 2013)
Jensen Huang on how he motivates employees who are already rich
“How do you keep your employees motivated and energetic when they’ve probably become richer than they ever expected?” the moderator asks Jensen.
Jensen replies:
“My direct reports include 55 people. I write no reviews for any of them. I give them constant [feedback], and they provide the same to me… Many of our executives are paid the same—exactly to the dollar. I know it’s weird. And I don’t do 1-on-1s with any of them, unless they need me. Then I’ll drop everything for them. I never have meetings with them alone, and they never hear me say anything to them that is only for them to know. There’s not one piece of information that I secretly tell ‘E-staff’ that I don’t tell the rest of the company. That way, our company is designed for agility, for information to flow as quickly as possible, for people to be empowered by what they do—not what they know. So that’s the architecture of our company.”
With respect to motivation, Jensen explains:
“The answer for that is my behavior. How do I celebrate and talk about success? How do I celebrate failure? How do I talk about setbacks? Every single day, I’m looking for opportunities to instill the culture of the company — What is important? What’s not important? What’s the definition of good? How do you compare yourself to good? How do you think about good? How do you think about the journey? How do you think about results? All of that, all day long.”
Source: @Stanford (Mar 2024)
Elon Musk: “When I interview somebody, I really just ask them to tell me the story of their career”
“What are some of the tougher problems that they dealt with? How they dealt with those. And how they made decisions at key transition points. Usually that’s enough for me to get a very good gut feel about someone.”
Elon continues:
“And what I’m really looking for is evidence of exceptional ability. Did they face really difficult problems and overcome them?”
He will also try to make sure that the person is actually responsible for the accomplishments they claim. And the best way to do this is by asking detailed questions:
“Usually the person who has had to struggle with the problem, they really understand it, and they don’t forget.”
One thing Elon does not look for is a college degree - or even a high school diploma:
“If somebody graduated from a great university, that may be an indication that they will be capable of great things, but it’s not necessarily the case. If you look at people like Bill Gates, Larry Ellison, Steve Jobs - they didn’t graduate from college, but if you had a chance to hire them, of course that would be a good idea.”
He concludes:
“[I’m] just looking for evidence of exceptional ability. If there’s a track record of exceptional achievement, then it’s likely that that will continue into the future.”
Source: @autobild (Nov 2014)
Sam Altman: “The good founders are people who have ideas all the time”
“You can give a founder an idea and they can start a company. The problem is they need to come up with new ideas for the company basically every week. You have to come up with crazy new ideas and big changes all the time.”
When Sam was at Y Combinator, they tried an experiment where they funded 20 teams of strong founders that didn’t have ideas but were otherwise really good. They all failed.
“What we learned is that the good founders are people who have ideas all the time. There’s an intelligence component to this. There’s a creativity component to this. There’s an ability to think independent thoughts component to this. But whatever you want to call this - this particular kind of intelligence that leads to seeing problems in different ways and thinking of ideas that don’t yet exist but should - you’ve got to have that in a founder.”
Source: @ycombinator (Mar 2018)
Peter Thiel on why the name of your startup is predictive of success or failure
“This is a slight aesthetic thing that I believe in very strongly: the names of companies are often very predictive of future failure or success.”
PayPal and Napster are the first example Thiel gives:
“PayPal was a very friendly name — it was the friend that helps you pay. Napster was a bad name — you nap some music, you nap a kid. That sounds like a bad thing to be doing, and it’s no wonder the government then comes in and shuts the company down within a few years.”
“You want to be very careful of how you name companies,” Thiel warns founders. In the context of the sharing economy, he likes Airbnb more than Uber:
“Airbnb sounds very innocent like this virtual bread and breakfast — this very light, non-threatening sort of company. Uber sounds like a bad name from Germany sometime in the 1930s. What are you exactly above? Maybe the law? This is probably something that, again from a regulatory perspective, I think Airbnb is a vastly better name than Uber.”
And on the social networking side, Thiel likes Facebook more than MySpace:
“You can say that all these social networks involve both reading and writing… Over time, reading dominates writing. Facebook was about learning about people around you — about their real identities at Harvard. MySpace started among wannabe actors in Los Angeles, and it was about them coming up with fictional narratives around themselves and a lot of other people in LA who are generally like that. And because reading dominates writing, Facebook would ultimately dominate MySpace. There’s a certain version where the whole arc of the company and the whole product arc was implicit in the names.”
Source: @mercatus (Apr 2015)
Palmer Luckey on what he looks for when hiring people at Anduril
“The most important advice that I can give people is to work on projects that you care about. Don’t look to school — whether it’s college or the state-mandated educational system. Don’t look to them to tell you, ‘Here’s what electronics projects you should be working on.’”
There’s two reasons Palmer gives aspiring young innovators this advice:
“Schools are often years (sometimes decades) behind what industry and hobbyists are actually doing.”
“When you’re working on something that you’re only doing for yourself, you’re going to make way better decisions in what you teach yourself and how you do things.”
In fact, this is also what he looks for when hiring people at Anduril:
“When I hire people at Anduril, I look for people who have done projects that were outside of what their work paid them to do or what their school made them do because that means they’re the type of person who is willing to work on things with their own money and their own time because they want to bring something to this world that wouldn’t have existed otherwise.”
Palmer continues:
“That’s what drives you to learn the most. That’s what drives you to have the right attitude around all this stuff.”
Source: @ShawnRyan762 (Feb 2025)
Startup Archive retweeted
Arthur C. Clarke on the importance of space as new frontier
"In all the long history of Man, ours is the first age with no new frontiers on land or sea, and many of our troubles stem from this fact [...]
There are no more undiscovered continents; set out towards any horizon, and on its other side you will find someone already waiting to check your visa and your vaccination certificate . . .
This loss of the unknown has been a bitter blow to all romantics and adventurers [...]
The road to the stars has been discovered none too soon. Civilization cannot exist without new frontiers; it needs them both physically and spiritually. The physical need is obvious - new lands, new resources, new materials. The spiritual need is less apparent, but in the long run it is more important. We do not live by bread alone; we need adventure, variety, novelty, romance. As the psychologists have shown by their sensory deprivation experiments, a man goes swiftly mad if he is isolated in a silent, darkened room, cut off completely from the external world. What is true of individuals is also true of societies; they too can become insane without sufficient stimulus.
It may seem over-optimistic to claim that Man's escape from Earth, and the crossing of interplanetary space, will trigger a new Renaissance and break the pattern into which our society, and our arts, must otherwise freeze. Yet this is exactly what I propose to do [...]
The discoveries of the first expeditions, the struggles of the pioneers to establish themselves on other worlds - these will inspire a feeling of purpose and achievement among the stay-at-homes. They will know, as they watch their TV screens, that History with a capital H is starting again. The sense of wonder, which we have almost lost, will return to life; and so will the spirit of adventure.
It is difficult to overrate the importance of this - though it is easy to poke fun at it by making cynical remarks about 'escapism'. Only a few people can be pioneers or discoverers, but everyone who is even half-alive occasionally feels the need for adventure and excitement [...]
Whatever the eventual outcome of our exploration of space, we can be reasonably certain of some immediate benefits - and I am deliberately ignoring such 'practical' returns as the multi-billion dollar improvements in weather forecasting and communications, which may in themselves put space-travel on a paying basis. The creation of wealth is certainly not to be despised, but in the long run the only human activities really worth while are the search for knowledge, and the creation of beauty. This is beyond argument; the only point of debate is which comes first.
Only a small part of mankind will ever be thrilled to discover the electron density around the Moon, the precise composition of the Jovian atmosphere, or the strength of Mercury's magnetic field. Though the existence of whole nations may one day be determined by such facts, and others still more esoteric, these are matters which concern the mind, and not the heart. Civilizations are respected for their intellectual achievements; they are loved - or despised - for their works of art. Can we even guess, today, what art will come from space? [...]
Surely the discoveries and adventures, the triumphs and inevitable tragedies that must accompany Man's drive towards the stars will one day inspire a new heroic literature, and bring forth latter-day equivalents of The Golden Fleece, Gulliver's Travels, Moby Dick, Robinson Crusoe or The Ancient Mariner [...]
All our aesthetic ideas and standards are derived from the natural world around us, and it may well turn out that many of them are peculiar to Earth. No other planet has blue skies and seas, green grass, hills softly rounded by erosion, rivers and waterfalls, a single brilliant moon. Nowhere in space will we rest our eyes upon the familiar shapes of trees and plants, or any of the animals who share our world. Whatever life we meet will be as strange and alien as the nightmare creatures of the ocean abyss, or of the insect empire whose horrors are normally hidden from us by their microscopic scale. It is even possible that the physical environments of the planets may turn out to be unbearably hideous; it is equally possible that they may lead us to new and more universal ideas of beauty, less limited by our earth-bound upbringing.
The existence of extra-terrestrial life is, of course, the greatest of the many unknowns awaiting us on the planets [...] The impact of even an extinct civilization could be overwhelming; the European Renaissance, remember, was triggered by the rediscovery of a culture that flourished more than a thousand years earlier. When our archaeologists reach Mars, they may find waiting for us a heritage as great as what we owe to Greece and Rome [...]
Despite the perils and problems of our times, we should be glad that we are living in this age. Every civilization is like a surf-rider, carried forward on the crest of a wave. The wave bearing us has scarcely started its run; those who thought it was already slackening, spoke centuries too soon. We are poised now, in the precarious but exhilarating balance that is the essence of real living, the antithesis of mere existence. Behind us roars the reef we have already passed; beneath us the great wave, as yet barely flecked with foam, lumps its back still higher from the sea.
And ahead . . . ?
We cannot tell; we are too far out to see the unknown land. It is enough to ride the wave."
The founder of Pinterest on what surprised him the most when starting a company
“It can take a really, really long time to build things that are worthwhile.”
Ben Silbermann describes just how demoralizing things were in the beginning of building Pinterest:
“In March 2010, we launched Pinterest and were at 3,000 accounts. And that wouldn’t have been so bad if we hadn’t started building Pinterest in November 2009. And that wouldn’t have been so bad if I hadn’t left my job to start a company in May 2008.”
A lot of people will compare startups to running a marathon, but Ben disagrees:
“The part of the analogy that’s right is that it’s long. But it’s actually really different. When I think about my experience, it’s more like going on a roadtrip in a car that doesn’t have very good headlights and you don’t have much gas and you think you’re going to Toledo, but you find out you’re supposed to be in Miami and if you really have to buy gas you might have to buy gas from someone who might just kick you out of your own driver’s seat.”
He continues:
“That uncertainty and the fact that every single day you’re dealing with a lot of choices and you don’t have perfect information is the lesson for me that was hardest to learn and continues to be a real challenge in doing a startup today.”
Source: @ycombinator (Oct 2012)
Jeff Bezos explains Amazon’s process for expanding into new products like Kindle and AWS
“I would definitely advise a small startup company to be as narrow and as focused as is possible to be. If you look at the original Amazon business plan, there was no hint of anything other than books in it… I wanted to build an online bookstore, and that was it.”
But the online bookstore worked better than they thought it would. So Amazon launched music, and that worked better than they thought. Then video, and that worked too. So Jeff sent an email to customers:
“I picked about 1,000 customers and I said, besides the things we sell today - books, music, and video - what would you like to see us sell? And the list came back incredibly long-tailed… So it’s been kind of one foot in front of the other.”
As Jeff explains, Amazon expands into new businesses in two ways:
“One is from a customer need. We will work from a customer need to the skills that we need. And the other one is skills forward: from a skillset we have to a new set of customers.”
Kindle is an example of a customer need - Amazon had no hardware team at the time, but to make sure they didn’t miss the transition to ebooks, they built one.
Amazon Web Services (AWS) is an example of skills-forward:
“We had probably more distributed computing expertise than anybody else in the world because of transactions. Transaction systems are so complicated and hard to build, and we had a service-oriented architecture of great complexity - probably before anybody else. Because we were doing that, we could see the future a little bit and decided to build AWS, which has turned into a huge business in its own right.”
Jeff concludes:
“Business is very situational. Rules of thumb are good, but they have to be applied to the right situation. Sometimes the old maxim that you should stick to the knitting is correct, but sometimes it’s wrong. And a senior leader’s job is to figure out: Which situation are you in?”
Source: @BusinessInsider (Dec 2014)