Jeff Bezos's 2007 Letter to Shareholders | Oasis Signal
*Oasis Signals* Series 1
Winter 2007. Amazon's Kindle launched and sold out within hours. Re-reading Bezos's shareholder letter, full of hope and confidence, welcoming 2008.
Enjoy
To our shareholders:
November 19, 2007 was a special day. After three years of hard work, we finally launched Amazon Kindle for our customers.
Many of you may already know a bit about Kindle. I'm delighted to see major media outlets scrambling to cover it and to hear people discussing it. Simply put, Kindle is a purpose-built reading device that provides wireless access to over 110,000 books, blogs, magazines, and newspapers. Kindle doesn't use WiFi for its wireless connection — it uses the same wireless network as advanced mobile phones, which means no matter where you are, it keeps your account connected. You can purchase books directly on Kindle and download an entire book within a minute. No need to buy a "wireless internet service plan," no long-term contracts, no monthly fees — just this quality service.
Kindle uses an electronic display that resembles ink on paper, readable even in harsh sunlight without glare. Users are stunned when they first see this screen. Kindle is lightweight and portable — thinner than a paperback — yet holds 200 books. Visit the Kindle product page on Amazon.com to see reviews from other users; there are already over 2,000 comments on that page.
After three years of effort, we genuinely hoped Kindle would be well-received by consumers, but we didn't expect it to be this popular. It sold out in 5.5 hours, so we had to rush to ramp up production.
Kindle originated from our bold idea to improve the physical book. Of course, we made this choice only after extensive deliberation. Anything that has existed in the same form for 500 years without change is extraordinarily difficult to transform. When we began designing this product, we established the single most important characteristic of this e-book — the disappearance of all physical presence. When reading with it, paper, ink, glue, or stitching won't interfere with your experience. All these material externals vanish, leaving only the author's mental world.
We recognized that Kindle had to break free from the experience of reading physical books, because only then could readers immerse themselves completely in the text. We also knew that if we tried to replicate every feature of traditional books, we would never break through convention or achieve true innovation. So we had to add new capabilities — things traditional books could never do.
In Amazon's early days, we launched an online bookstore modeled after physical bookstores. At the time, people assumed online bookstores should have all the functions of physical ones. I was repeatedly asked the same question: "How do you plan to do e-book signings?" Thirteen years later, we still haven't found an answer. We never tried to copy physical bookstore functions into our online store. Instead, we took inspiration from physical bookstores and worked to discover what new media could accomplish that old media never could. We don't hold e-book signings, nor can we provide a cozy environment for coffee and relaxation. But we can offer millions of titles, let users decide what to buy through reviews, and provide recommendation features like "Customers who bought this book also bought..." The capabilities of new media go far beyond this.
Let me highlight some of Kindle's built-in features that physical books could never achieve. If you encounter an unfamiliar word, a simple tap brings up its definition. Of course, you can search within books. Additionally, your margin notes and underlined passages are automatically saved to the "cloud" so they won't be lost. Kindle automatically saves your current page. If your eyes tire, you can adjust the font size. Most importantly, Kindle users can search for books and find what they want within 60 seconds.
When I first watched people do this, they were astonished by this capability. Our vision for Kindle is that any published book in any language can be obtained within 60 seconds.
We are deeply grateful that numerous publishers, including major publishing houses, have embraced Kindle. From the publisher's perspective, Kindle offers many advantages. E-books never go out of print, never go out of stock, and never create waste from overprinting. Most importantly, Kindle makes it easier for readers to buy more books. People will choose anything that isn't troublesome.
Humans and tools progress together. We change our tools, and our tools change us.
The emergence of printing several thousand years ago was a crucial development in tools. Without question, printing brought transformative change. Five hundred years ago, Gutenberg's invention dramatically reduced the cost of book production. Physical books opened a new mode of intellectual exchange and learning.
More recently, networked tools — desktop computers, laptops, mobile phones, and PDAs — have also brought enormous change to our lives. We find ourselves increasingly drawn to fragmented information, and over time, we lose our ability to concentrate for extended periods. I love my BlackBerry because it improves my efficiency, but I wouldn't want to read a 300-page document on it. Nor do I want to read hundreds of pages on a desktop or laptop. As I've noted in this letter, when something operates more smoothly and simply, people are more inclined to choose it.
If our products make it easy for people to read fragmented information, we will tend toward reading fragments rather than longer works. Kindle is designed specifically for long-form reading. We hope that Kindle and subsequent products will, over the coming years, gradually help readers develop the habit of sustained reading — achieving a balance with the recently popular trend of fragmented reading.
You may think I'm preaching, but I assure you these words come from the heart. I'm not alone in this thinking — many people at our company feel the same way. I'm glad of this, because missionary spirit helps us build better products. One more thing: while I believe progress in improving traditional books will come quickly, as a pioneer in this new field, Amazon cannot rest on its laurels. The goal of improving traditional books will be achieved, but if we don't execute well, other companies will accomplish it instead.
Our team is passionate about driving growth in free cash flow per share and return on invested capital. We know that by consistently putting customers first, we can achieve this goal. I guarantee that going forward we will create more innovative products and services than ever before, and we know the road won't always be smooth. Kindle, true to its name, will spark a new wave and elevate the reading experience. On this, we are confident and optimistic.
Jeffrey Bezos
Founder and Chief Executive Officer, Amazon
Oasis Capital is a new-generation venture capital firm in China, dedicated to discovering the most vital entrepreneurs of the next decade and growing alongside them to create long-term value. "Championing Vitality" is Oasis's vision and mission. This vitality is both the direction of structural transformation in our era and the force of resilience and evolution within entrepreneurs. Oasis Capital focuses on early and growth-stage investments, with individual checks ranging from $3 million to $30 million, concentrating on technology-enabled services in education, healthcare, enterprise services, and related fields, supporting China's new service upgrade driven by technology.
