This isn’t the headline you’d expect to see for Amazon, a company that has done nothing but dominate the world’s retail trade landscape since 1994, and certainly not from Jeff Bezos, the bloke at its helm worth $140 billion USD.
Funnily enough, this actually has little to do with Amazon’s $250 billion USD loss in market value over an eight week period in late 2018 (a sum that took the company 18 years to accrue), but rather thanks to Bezos’ doom-and-gloom philosophy on disruption.
Given Wall Street’s tendency to descend into mass hysteria based on the most benevolent statements made by high-ranking staff members, it’s unusual to hear words this blunt coming out of the CEO’s mouth. It appears, however, that Bezos has a penchant for pessimistic outlooks.
In 2013, Bezos appeared on the US show 60 minutes and, when quizzed on Amazon’s floundering attempts to fulfil its promise of a drone delivery service, stated the following:
“Companies have short lifespans… and Amazon will be disrupted one day. I don’t worry about it because I know it’s inevitable. Companies come and go, and the companies that are the shiniest and most important of any era – you wait a few decades and they’re gone.”
Fast forward to 2017, and Bezos started sounding like the Oracle from The Matrix in his 2017 Letter to Shareholders. He’s often heard harping on about his “Day One” philosophy (which dictates that staff should carry themselves as if it’s the company’s first day), so when prompted for an explanation on what “Day Two” might be he had the following to say:
“Day Two is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day One. An established company might harvest Day Two for decades, but the final result would still come.”
Late in 2018, we see the CEO becoming increasingly aware of Amazon’s impending deterioration. CNBC obtained a recording of an address made to Amazon employees, in which Bezos answered a question regarding Sears’ bankruptcy with this:
“Amazon is not too big to fail… In fact, I predict one day Amazon will fail. Amazon will go bankrupt. If you look at large companies, their lifespans tend to be 30-plus years, not a hundred-plus years.”
He’s not wrong either. A quick glance at the original Fortune 500 list published in 1955 shows that a startlingly low 60 companies remain on the list as at 2017. Furthermore, a report by Innosight found that in 1990 the average tenure in the S&P 500 Index was 20 years, and is now forecast to be just 14 years by 2026.
So what is the world’s richest man going to do about it? He insists that his job now is to delay that final day for as long as possible and ensure the company continues to obsess over customers rather than itself.
It looks as though his plan is moving along swiftly, as Amazon recently announced expansion plans into two new locations for its second headquarters, set to result in an increase of 50,000 employees.