In recent days, Amazon CEO Andy Jassy sent a letter to shareholders to take stock of how 2024 went and what the next strategic steps are for the near future.
We will not deal here with the economic-financial results. We already talk about them every three months to comment on Amazon’s quarterly report (you can find the latest one here). Instead, let’s focus on the most strategically relevant aspects.
The Company of “Why”
Let’s say right away that Jassy’s letter is quite interesting, lengthy, and contains plenty of discussion points (perhaps more than usual, and you can find them in full here).
The top manager reiterated first of all that at the heart of Amazon’s philosophy is a culture of “Why”.
Constantly asking “Why?” is what has guided all the company’s innovations since its founding – says Jassy – and continually asking “Why must the customer experience be this way?” and “Why can’t it be better?” has allowed Amazon to deconstruct problems, identify root causes, and open doors that seemed closed.
A questioning mindset that, according to the CEO, underpins the creation of services like Kindle, Amazon Web Services, Prime Video, and many other innovations that have radically transformed the customer experience.
>>> Read our article and learn to Understand all the sales fees on Amazon. <<<
The Work Philosophy
Jassy then devoted ample space to sharing the principles and strategies that guide his organization.
Let’s briefly summarize them.
Leadership
- Leadership is based on continuous self-questioning. Effective leaders are curious and change their stance when presented with compelling new information.
- Learn and be curious. The difference in the growth of companies and individuals is determined by their attitude towards continuous learning.
- Have backbone. Leaders are obligated to respectfully challenge decisions when they disagree, but once a decision is made, they fully commit.
Work Organization
- Since 2004, internal presentations have taken place via six-page narrative documents instead of PowerPoint, forcing deeper reflection from both writers and readers.
- In-person collaboration. Innovation is more effective when people work together in the same place, facilitating spontaneous brainstorming and rapid idea evolution.
>>> Also read our guide Inventory Management on Amazon: guide to warehouse optimization. <<<
The Startup Mindset
- Operate like a startup. Despite its size, Amazon maintains the mindset of “the world’s largest startup” through key principles such as:
- Customer focus. Every innovation must solve a real problem or significantly improve the customer experience.
- Need for builders. People who constantly analyze customer experiences and ask how to improve them.
- Ownership mindset. Teams act as if the company were theirs, with a personal sense of responsibility for success.
- Speed of execution. Considered fundamental in every field and moment, not at the expense of quality but as a cultural priority.
- Eliminating bureaucracy. Distinction between necessary processes and useless bureaucracy that slows down innovation.
- Being lean. Getting the most done with the fewest necessary resources.
- Willingness to take risks. You don’t achieve something extraordinary by playing it safe.
- Focus on results. What matters is the actual value created for customers.
Artificial Intelligence
A large part of the letter is understandably dedicated to the hottest topic of the moment: artificial intelligence.
The CEO stated that he sees generative artificial intelligence as the force that will reinvent every customer experience. For this reason, Amazon is investing heavily in this sector, with over 1,000 GenAI applications in development. He also noted that AI is already transforming sectors like coding, shopping, healthcare, and robotics, and Amazon believes these changes will happen faster than any previous technological revolution.
Let’s now look point by point at the main reflections Jassy wanted to share.
The Cost of Artificial Intelligence
Amazon acknowledges that AI is currently too expensive due to dependence on a single chip supplier. The company is tackling this issue with Trainium2 chips, which offer a 30-40% better price-performance ratio.
An important point is the distinction between model training costs and inference (output) costs: while most costs today concern training, in the future inference will represent the greater expense. Amazon expects inference efficiency to improve significantly over the next two years, making AI more accessible.
>>> Also read our article How to Sell on Amazon USA: The Complete Guide for European Sellers. <<<
Alexa+ and the Future of Personal Assistants
The CEO identifies the value of a true personal assistant in the ability to both answer questions AND perform concrete actions. Alexa+ is presented as the solution that combines chatbot intelligence with the ability to carry out many practical actions: from media playback to smart home control, from shopping to bookings.
With 600 million devices already in circulation, Amazon sees a future in which Alexa+ will play an increasingly central role in customers’ lives.
Delivery Speed and Service in Rural Areas
Speed remains a crucial factor: when Amazon promises faster deliveries, customers complete purchases at a higher rate and buy more frequently.
The company is expanding same-day delivery even to smaller towns and cities, going against the trend of competitors who are abandoning rural areas for cost reasons.
>>> Read our article Innovative Packaging: Amazon’s New Solutions for the Packaging of the Future. <<<
Project Kuiper and the Digital Divide
Amazon is also addressing the issue of 400-500 million households worldwide without access to high-speed Internet.
Project Kuiper, with its planned 3,200 satellites, aims to provide connectivity to these underserved areas.
Healthcare Transformation
The CEO highlights the frustrations of the American healthcare system and how Amazon Pharmacy and One Medical are trying to improve this experience.
The letter concludes with a personal reflection on Jassy’s 28 years at Amazon and on why the company continues to operate with the spirit of “the world’s largest startup.”
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