In one of his longest shareholder letters, Amazon founder Jeff Bezos gave readers a “tour” of 21 Amazon initiatives. Among the tour stops were updates on Prime, initiatives for “Readers & Authors,” the Amazon Appstore, Spoken Word Audio, Employee Empowerment, Fulfillment Innovation, Urban Campus, Fast Delivery, and Experiments and More Experiments.
The tour began with Prime, the two-day shipping plan for which Amazon raised the annual fee from $79 to $99 in March. There are “tens of millions of Prime members worldwide,” Bezos wrote and more than 20 million products that are eligible to be shipped under Prime.
Turning to readers and authors, Bezos said that the company is “investing heavily on behalf of readers,” and he pointed to such 2013 achievements as the launch of the new, high-contrast Kindle Paperwhite, the integration of the “very impressive” Goodreads into Kindle, and the launch of Kindle in India, Mexico, and Australia. Last year also saw the launch of Kindle Worlds and the literary journal Day One plus the debut of eight Amazon Publishing imprints and the launching of Amazon Publishing in the U.K. and Germany.
The Amazon Appstore now has over 200,000 apps and serves customers in almost 200 countries, Bezos wrote.
He called 2013 a “landmark year” for Audible, noting that Audible customers downloaded “close to 600 million listening hours” of audiobooks last year. In what passes for hard numbers at Amazon, Bezos said the audio edition of The Great Gatsby has sold 100,000 copies.
In devoting a couple of paragraphs to Amazon’s fulfillment centers, Bezos said the company is on the "7th generation of fulfillment center design.” The company now has 96 “FCs” and he invited shareholders to take a tour of the facilities. Working conditions at several Amazon FCs have come under criticism in the media. Bezos said the company “rolled out 280 software improvements in the year,” and added, “Our goal is to continue to iterate and improve on the design, layout, technology, and operations in these buildings, ensuring that each new facility we build is better than the last.”
Last year also saw Amazon increase its footprint in Seattle, adding 420,000 sq. ft. of headquarter space in the city and the company “broke ground on what will become four city blocks and several million square feet of new construction,” Bezos wrote. Although moving to the suburbs would have made construction cheaper, Bezos said Amazon chose to stay in the city since urban campuses are “much greener” than those in the suburbs.
In 2014, Bezos wrote, Amazon plans to expand its Sunday delivery program to “a large portion of the U.S. population.” Amazon began the program, in cooperation with the U.S. Postal Service, last holiday season in selected cities. In an apparent reference to the much-hyped drones, Bezos wrote “The Prime Air team is already flight testing our 5th and 6th generation aerial vehicles, and we are in the design phase on generations 7 and 8.”
Bezos closed by making it clear the Amazon will continue to push the envelope across a range of areas, writing: “We have the good fortune of a large, inventive team and a patient, pioneering, customer-obsessed culture –great innovations, large and small, are happening everyday on behalf of customers, and at all levels throughout the company. This decentralized distribution of invention throughout the company – not limited to the company’s senior leaders – is the only way to get robust, high-throughput innovation. What we’re doing is challenging and fun – we get to work in the future.
Failure comes part and parcel with invention. It’s not optional. We understand that and believe in failing early and iterating until we get it right. When this process works, it means our failures are relatively small in size (most experiments can start small), and when we hit on something that is really working for customers, we double-down on it with hopes to turn it into an even bigger success. However, it’s not always as clean as that. Inventing is messy, and over time, it’s certain that we’ll fail at some big bets too.”
