Bezos’s 2011 Shareholder Letter: A New Form of Invention—Platforms for Creators

#BezosShareholderLetter2011 Here are the core initiatives Amazon emphasized in 2011, for reference. There is one passage I, Robin, particularly want to emphasize: innovation and empowerment. One way to succeed is to solve problems directly for many people. An even bigger ambition is to empower many people and help them succeed. Microsoft and Alibaba now repeatedly stress this too: empowering an industry, an organization, or an individual. Innovation takes many forms across many dimensions. The most disruptive innovations are often those that empower others, free their imaginations, and let them pursue their dreams. That is what AWS, FBA, and KDP are doing. We are using them to build powerful self-service platforms that allow tens of millions of people to experiment boldly and accomplish things they would struggle to do elsewhere. These innovative, large-scale platforms are not zero-sum games. They create wins for both sides and immense value for developers, entrepreneurs, customers, authors, and readers. It’s All About The Long Term. To our shareholders: /The Power of Innovation/ “For us, the value of Amazon Web Services (AWS) is impossible to overlook—in just twenty seconds, we can double our server capacity. With growth as rapid as ours, and a team as small as ours, having the best technical support we can trust is crucial to our global music community. “Now, thanks to Amazon, we can offer the best technology and grow at a tremendous pace.” That is Christopher Tholen, BandPage’s CTO. His comments about the speed and reliability with which AWS helps them scale computing capacity are not idle remarks: BandPage now connects 500,000 bands with tens of millions of fans. (Chinese translator’s note: Google’s YouTube acquired this company in 2016; it is now “YouTube for Artists.”) “I began selling on Amazon in April 2011. By around June, we had become the platform’s top lunchbox seller, averaging 50 to 75 orders a day. When the back-to-school season arrived in August and September—our peak selling season—we often had 300 or even 500 orders a day. It was phenomenal… I use Fulfillment by Amazon (FBA), which makes everything so convenient. And when customers learned that a Prime subscription gave them free shipping, lunchbox orders took off!” Kelly Lester is the “mom entrepreneur” behind EasyLunchBoxes, the convenient, environmentally friendly lunchboxes she designed and manufactured. (Chinese translator’s note: This business has been around for ten years and is still selling lunchboxes!) “I stumbled onto Amazon, but it opened a whole new world for me. Since I had roughly a thousand books stashed at home, I thought I might as well try it! I sold a few, then the business kept growing until I thought: I don’t need to find another job. This is what I’ll do! Nobody is my boss except my wife—what could be better? We work together and go out hunting for books together; we make a great team. We sell about 700 books a month and send 800–900 books to Amazon each month. Amazon then ships the books to those 700 customers. Without Amazon taking care of shipping and customer service, my wife and I would have to spend every day hauling a dozen or more books to the post office. Amazon solved that problem and saved us an enormous headache… This program is absolutely fantastic. I love it! If Amazon handles shipping and customer service for you, what more could you ask for? What more?” Bob Frank rebuilt his career after the financial crisis by founding RJF Books and More. He and his wife travel between Phoenix and Minneapolis, and he says finding books is like going on a treasure hunt every day. (Chinese translator’s note: This store still exists on Amazon, although it appears to sell fewer things now.) “Because of Kindle Direct Publishing (KDP), I earn more royalties in a month than I did with any publishing house. I went from worrying every day about whether I could pay my credit-card bills—and there really was a period when I couldn’t—to finally having savings and even planning a vacation. Look at me getting carried away! I could never have imagined this before! Amazon let me spread my wings. I used to write just one kind of book, but I had so many other things I wanted to write. Now I can, and I manage my own career. I feel as if I have found a partner in Amazon. They know this business and put the choices in the hands of authors and readers. It has completely transformed publishing.” This is A. K. Alexander, author of Daddy’s Home, one of March’s top 100 Kindle best sellers. (Chinese translator’s note: She remains a best-selling writer, mainly of long-form thriller series.) (Chinese translator’s note: The next three promotional testimonials are omitted here. They make similar points, praising KDP. They are: Blake Crouch, author of the best-selling Run, whose dream of writing full time Amazon fulfilled; he focuses on science fiction. Theresa Ragan, the best-selling author of Abducted, became an overnight success through Amazon; she focuses on thrillers, time travel, and romance. Robert Bidinotto, author of the best-selling Hunter: A Thriller, was helped through both an economic crisis and a crisis at age 60; he focuses on thrillers. Creston Mepes, author of the best-selling Nobody, says Amazon helped him reach his readers more effectively.) Innovation takes many forms across many dimensions. The most disruptive innovations are often those that empower others, free their imaginations, and let them pursue their dreams. That is what AWS, FBA, and KDP are doing. We are using them to build powerful self-service platforms that allow tens of millions of people to experiment boldly and accomplish things they would struggle to do elsewhere. These innovative, large-scale platforms are not zero-sum games. They create wins for both sides and immense value for developers, entrepreneurs, customers, authors, and readers. AWS has grown to support 30 different services, serving thousands of small businesses and independent developers. One of its earliest services, Simple Storage Service (S3), now stores over 900 billion data objects, with billions of new objects added each day. S3 routinely handles about 500,000 transactions a second and can peak at 1 million a second. All AWS services charge according to usage, making costs highly flexible. AWS is also self-service: you do not need to negotiate a contract or meet a salesperson. You can get started by reading the documentation online. AWS services are flexible enough to scale up or down. In the fourth quarter of 2011 alone, FBA shipped tens of millions of items for third-party sellers. Sellers using FBA can make their products eligible for Amazon Prime, Super Saver Shipping, returns processing, and customer service. FBA is self-service too: our back-end website makes inventory easy to manage. For those with a more technical inclination, we also provide APIs so you can incorporate the FBA platform into your own systems as a convenient component. I keep emphasizing self-service because I think it matters for a reason people often overlook: even a well-intentioned gatekeeper can obstruct innovation. On a fully self-service platform, even ideas that seem wildly unconventional can be tried, without an expert gatekeeper telling you, “That can’t possibly work!” And guess what? Many of those unconventional ideas really do work, benefiting society. KDP is expanding rapidly. More than 1,000 KDP authors now sell over 1,000 copies of their work each month. Some have sold hundreds of thousands of copies, and two authors have entered the “Kindle Million Club.” KDP is very friendly to authors. They retain their copyrights and derivative rights and can publish at their own pace. With traditional publishers, books face a long wait for publication, sometimes a delay of a year. Most importantly, authors can receive 70% of revenue. At the largest publishers, by contrast, authors get only 17.5% for each ebook sold. KDP’s royalty policy is revolutionary. We sell books at reader-friendly prices such as US$2.99, of which the author gets about US$2. To earn that same US$2 from a traditional publisher, the book would have to sell for US$11.43. I have to laugh: the difference those two prices make to sales should be obvious! KDP benefits readers too, because the books cost less. More importantly, readers can access a wider range of content. Traditional publishers may reject what authors want to write, preventing it from being published. Now those authors have a fair opportunity to let the market decide. Look at Kindle’s best-seller list and the New York Times best-seller list and judge for yourself which is more diverse. Kindle’s list is full of books from small publishers and independent authors, while the Times list contains only successful, established writers. Amazonians are looking ahead, bringing revolutionary innovations to authors, entrepreneurs, and developers. Innovation has become second nature at Amazon, and I think our pace of innovation is accelerating. It is tremendously energizing! I am very proud to be part of this team. As usual, the 1997 letter follows. We remain true to our original commitment. It is always Day 1! Jeffrey P. Bezos (Chinese translation by Vinchent) ——Verification note—— Source: Amazon’s 2011 shareholder letter, an official public document. The Chinese translation was reposted from Dedao App user Vinchent, as credited in the original post. Verification: Compared with the official original in Amazon’s official shareholder-letter collection, cross-checked against SEC documents/official PDFs. Selected major figures and facts were consistent; the entire text was not compared word for word. Correction (one difference between the Chinese translation and the original): • For “billions of new objects added each day,” the original says more than 1 billion per day.