I just read wired and businessweekly (both Chinese) on Jeff Bezos the founder of Amazon.com, he is all over the news now. Something interesting about him, is he places big bet on long term shot. The company focused on the customer instead of purchasing its peers: heavily invest itself on warehouse to be more efficient. That is at the time when the company was still losing money. They focus on 5-7 years investment cycle, which is completely unthinkable, and they are an internet company.
That reminds me of Peter Thiel's CS 183 on Monopoly: instead of chasing what everyone else is doing, focusing on some problem that has been overlooked, where no one is competing. In Bezos case, the blank area is to make investment about 5-7 years, which no one else on the internet is doing. He has more space for error, and a bigger premium when he do get it right.
This also align with another article from Malcolm Gladwell on The Sure Thing. We used to think that the very successful entrepreneur are risk-seekers, taking big bid to make a lot of money, Gladwell argued that to the contrary, these people are risk-adverse. They usually don't make bet if they absolutely sure about something, and when they bet, they bet big.
In the case of Bezos, he started to play with the end game in his mind, and he played big, his recent bet is US$ 700 M on a warehouse robot company.
Malcolm cites Villete and Vuillermot's study:
The entrepreneur has access to that deal by virtue of occupying a "structural hole," a niche that gives him a unique perspective on a particular market. Villette and Vuillermot go on, "The businessman looks for partners to a transaction who do not have the same definition as he of the value of the goods exchanged, that is, who undervalue what they sell to him or overvalue what they buy from him in comparison to his own evaluation." He moves decisively. He repeats the good deal over and over again, until the opportunity closes, and—most crucially—his focus throughout that sequence is on hedging his bets and minimizing his chances of failure. The truly successful businessman, in Villette and Vuillermot's telling, is anything but a risk-taker. He is a predator, and predators seek to incur the least risk possible while hunting.
Several take-away here: to have a unique perspective, to be decisive, and to hedge risk. I am developing some possible ground to improve these capabilities:
- To have unique perspective; talk to different people, have different experience/job, look deeper, look where most people overlooked or don't dare to, appreciate the real constraint in the world. If the key here is unique, then it should really be about focusing on intensity, reaching where few people get, not just change a way of thinking.
Action: Do something other people are not doing, even better yet: get into a habit that other people are not doing (i.e write blog, take nap, read deep, think); neglect what has is popular (i.e: mobile internet.)
- To be sure about own insight; Have full confidence on your insight is key. Constantly adopt some action from your insight, gain confidence, constantly check reality. There is two subtle way in adopting this, that might be two complementary strategy:
Hypothesis 1 : Be able to rely 100% of what you have on the sole insight. You will need to be really, really sure about something.
Action: Develop HARD skill, it is all it count at the end. Need to know everything (i.e. Master Learning; Master Deliberate Practice; Master Javascript: The Good Part; Master Writing; Master Visual; Master Analytic)
Hypothesis 2 : Take a cost-efficient approach. Take a 80/20 approach testing, and make many good shoots.
Action: Observe, and write letters to 30 business owners for advise on where they can improve their business.
- To hedge risk; This will requires me to follow hypothesis 1 above, develop very accurate fact.
Action: I will need to get into the habits of developing tool, or check point where I can verify whether my hypothesis/insight is correct, which is consistent with hypothesis 2, constantly testing and checking.
Action: I will need to get into the habits of developing tool, or check point where I can verify whether my hypothesis/insight is correct, which is consistent with hypothesis 2, constantly testing and checking.
