Jeff Bezos on Entrepreneurship and How Amazon Innovated

Transcript:

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well I came across the fact this was
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back in 1994 that web usage worldwide
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web usage was growing at something like
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twenty three hundred percent a year and
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that was sort of wake-up call for me
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that there was something going on and
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you know many people at that point
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hadn’t heard of the web they didn’t have
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internet access this was the time of you
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know twenty eight kilobit per second
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modems and dial-up access and so on and
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so on so it’s a very different age but
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there was clear it was clear that there
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was going to be something there and you
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I realized you could make a bookstore on
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the web that could hold more books than
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a physical bookstore could ever hold it
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could truly have universal selection and
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of course you know since then we’ve
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expanded that into other categories and
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we keep pursuing that notion of Earth’s
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biggest selection at Amazon well my
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background was in computers and but
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books were the first best product to
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sell online as a happy coincidence I’ve
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always been a big reader but that wasn’t
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the reason that we chose books my real
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compact my real passion was computers
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and that’s how I was involved in this
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world of the web back in 94 but books
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was a great first best product to saw
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online because books were very unique
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and still are in one respect and that is
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that there are more items in the book
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category than there are items in any
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other category there are millions of
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books active and in print around the
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world and the largest super store so
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largest physical book super stores only
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carry about a hundred 150 thousand of
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those millions of different books so on
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the web you could build something that
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solved a real problem that people can’t
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find some of these books that they want
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to find they’re very good books but they
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may be very narrow have a very narrow
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audience and so we basically built
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Amazon to make it possible for people to
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find those hard to find books
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yeah well we had to build all of the
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software systems that did not only the
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front in the website the piece that’s
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most visible to people but also all the
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backend systems that interface with
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suppliers so that you can reorder items
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and the systems that manage that picking
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packing and shipping the fulfillment
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part of the business and all those
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things are very important in fact I’ll
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tell you when many of the dot-com
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companies went out of business when the
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Internet bubble burst one of the reasons
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is they hadn’t really put enough
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attention into their back-end they
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hadn’t put enough attention into what I
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think some people consider the less
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glamorous part of the business which is
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the picking packing shipping but we’ve
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done an extensive analysis and found out
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the customers actually wanted to receive
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their products
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well for me I know I think it’s very
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important to pursue your passions and if
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you’re doing that the risks are often
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not as great as they seem to be so for
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me when I thought about you know leaving
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my job and starting this company I knew
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there was a good chance that it wouldn’t
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work but I also knew that when I was 80
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years old and thinking back over my life
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I would never regret having tried and
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failed but I might regret having never
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tried and when I thought about that way
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it didn’t actually seem like that big of
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a risk
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ie it’s a very rare idea that can be
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done by a single individual almost
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everything that is going to change the
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world solve a problem improve something
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these are usually big efforts and they
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require you know teams a team working
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together to really get something
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important done and that has been the
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story of Amazon comet every step along
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the way we have had a team here that is
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is making this work I mean I don’t know
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even even at the smallest scale you have
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to figure out how to get help from your
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friends from your family members from
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people that you can hire in those early
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days I think without that it would never
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work
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well we think prior most important piece
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of intellectual property is our brand
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name and I think people and I think this
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is very important for anybody who’s
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going to start a company or market an
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invention to understand is that brands
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for companies are like reputations for
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people and reputations are hard earned
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and easily lost so the most important
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intellectual property that a company can
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have is for us it’s that it’s it’s it’s
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Amazon it’s that name but what it stands
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for we’ve worked very hard to earn trust
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you can’t ask for trust you just have to
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do it the hard way one step at a time
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you make a promise and then fulfill the
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promise you say we’ll deliver this to
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you you know tomorrow and then you
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actually deliver it tomorrow and if you
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do that over and over again then
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ultimately you can instill your
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company’s name with a reputation and
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that’s I think you know sometimes people
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talk about brands in this very amorphous
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way but for me I like to think of it as
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a person and what is the reputation that
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that person has and how have they earned
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that reputation
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you
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well we think that fulfillment by Amazon
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is a very important business for for
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Amazon account so by offering it to
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others we have this fulfillment capacity
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let me let me back up and just say we
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have these warehouses all over the world
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where we do our picking packing and
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shipping and we’ve put a significant
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investment into making those things work
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extremely well be able to deliver
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products very quickly have the products
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close to customers so that you can get
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them to customers fast an acceptable
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cost and that’s a hard piece of
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infrastructure to build it took us you
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know over a decade to build that
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infrastructure at a very significant
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monetary cost in one of the ways we can
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leverage that infrastructure is by
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offering it to others for a fee and
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that’s what fulfillment by Amazon is so
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for our point of view it’s just good
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business but from an inventors point of
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view or a startup company’s point of
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view or any you know small retailers
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point of view or even big retailers it’s
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an opportunity to use our infrastructure
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to provide better services to your
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customers so we will literally do the
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picking packing and shipping for you and
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send those things to your customers send
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those things to retail points of
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distribution for you and allow you to
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focus on your idea instead of having to
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pay this what really is an
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undifferentiated price of admission and
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you know that you would otherwise have
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to figure out how to do on your own and
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it’s very important when you’re doing
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something new not to reinvent the wheel
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on stuff where you’re not actually
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creating any new value and so
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fulfillment by Amazon is really a great
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thing for small startup companies it’s
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completely self-service so you can come
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and you don’t have to negotiate a
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multi-year contract with us you can use
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it as little or as much as you want so
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that I think is very you know basically
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so just being a variable cost it’s not
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something we have to pay a big upfront
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fee you just use it as you need to use
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it that’s actually a very innovative
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change in the industry the second thing
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is that we’re very good at sorting items
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together we’re probably the best in the
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world so if a customer buys more than
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one item and they’re going to go in the
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same box
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we’re very very good at that a third
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thing is that we’ve actually opened it
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up to developers by these things called
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Web Services API so if you’re if you’re
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a software engineer programmer you’ll
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know what that is
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but that’s a way for people to embed
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into their own systems that get in a
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self-service way basically treat our
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huge you know 10 million plus
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square-foot fulfillment center network
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as a giant computer peripheral they can
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treat it like a printer and just command
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this big network of buildings to do
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things so they’re a bunch of innovations
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inside of our our fulfillment centers
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and we’re able to do this very
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efficiently
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well to me true innovation is something
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that’s not only an invention but an
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improvement and you know sometimes
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things it’s not easy to make things
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different I mean it’s not difficult it’s
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not hard to make things different but it
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is hard to make things different and
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better most of the solutions most of the
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problems in the world already have
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solutions of one kind or another so all
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of those solutions can be improved upon
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there’s no chance that anything is
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perfected yet I don’t believe that but
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those all those solutions are highly
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evolved and they’ve been you know people
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been working on solutions to most
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problems for a long time but still I you
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know you know somebody wasn’t that long
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ago somebody figured out that you should
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add wheels to suitcases pretty good
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improvement
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well it’s hard work so it’s it’s easy to
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have ideas it’s very hard to turn an
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idea into a successful product there are
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a lot of steps in between it takes
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persistence relentlessness so I always
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tell people who are you know who think
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they want to be entrepreneurs it’s you
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need a combination of stubborn
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relentlessness and flexibility and you
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have to know when to bewitch and
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basically you need to be stubborn on
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your vision because otherwise it’ll be
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too easy to give up but you need to be
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very flexible on the details because as
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you go along pursuing your vision you’ll
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find that some of your preconceptions
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were wrong and you’re going to need to
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be able to change those things so I
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think taking an idea successfully all
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the way to the market and turning it
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into a real product that people care
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about and that really improves people’s
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lives is a lot of hard work