The Amazon CEO has admited that failures, such as recent Fire Phone flop, have cost the company billions of dollars, but is adamant that experimentation is key to the company’s survival.
Amazon’s chief executive, Jeff Bezos, has admitted that he has made billions of dollars of failures on experiments, including the failed Fire Phone.
Speaking at the Business Insider Ignition conference in New York, Bezos said: “I’ve made billionaires of dollars of failures at Amazon.com. Literally”
However, the Amazon CEO asserted that taking risks and learning from failures was an important part of surviving and thriving as a modern business.
“None of those things are fun, but also they don’t matter. What matters is companies that don’t continue to experiment or embrace failure eventually get in the position where the only thing they can do is make a Hail Mary bet at the end of their corporate existence. I don’t believe in bet-the-company bets.”
Commenting specifically on the poor sales of the Fire Phone, Bezos said: “I think it takes more time to analyze something like that,” he said, urging the audience to “stay tuned.”
Bezos explained that many of his experiments that have paid off, including Amazon Web Services, Kindle, Amazon Prime, and Amazon Marketplace, have made Amazon what it is today and funded further experimentation.
Bezos went on to dismiss Amazon’s poor third quarter earnings as a blip on the radar, adding that managing a company explicitly to meet quarterly expectations “would be a mistake.”
“If you look at our stock price over a year, five years, ten years, it all looks pretty great,” he said. “It’s a volatile stock. It always has been. It probably will be. We’re a large company, but in many ways because of all our emerging businesses, we’re still a startup, and there’s a lot of volatility with startups.”
Unlike its rivals Google and Apple, Amazon is famously an unprofitable company. But Bezos said the company was using all its success to invest in future ventures. “It’s like we built this lemonade stand 20 years ago,” he explained. “It’s become very profitable, but we decided to use our skills for a hamburger stand and a hotdog stand and so on.”