Stop the presses: a new media baron appears

Most companies will excel at one or two things – engineering, customer service, cost cutting, inventing products, financial management – and wind up with two or three functioning cylinders function but an unbalanced engine. While I'm sure insiders at Amazon will readily point to snafus or inefficiencies, this is a company that somehow has managed to marry Google's engineering excellence with Walmart's cost-cutting zeal. Eliminating defects, trimming pennies from activities, engaging in 'root cause analysis' – a term normally associated with semiconductor or light bulb manufacturers means that, as the years have gone by, Amazon has been able to compete on not just selection and convenience but also price. Think: ten cents pared from the cost of delivering a package to 50 million customers equates to savings of $5M.

One of the most powerful aspects of Amazon's business model is the "self-service" feature tucked into so many portions of its products. One example, now considered mundane but at first controversial, are user reviews. Fulfillment by Amazon and Kindle Direct Publishing are more powerful examples of the amplifying powers of a 'platform'. The first provides all sorts of services for merchants selling on Amazon while the second allows authors to be entrepreneurs. Any company with a service that others can build upon by themselves – think Microsoft Windows or Google AdWords – is in a fantastic spot.

Bezos also tucks in some anecdotes about the expectations the company has for new hires (seeking to ensure that a fresh recruit will raise the average effectiveness of the group they are joining) and in 2005 he devoted his letter to a different subject: the importance of data and math. He says that at Amazon much of 'the heavy lifting is done by math' but warns against slavish infatuation with numbers, which can lead to doing dumb things more efficiently. His message about what he calls 'judgment based decisions' versus 'math based decisions' is worth pondering.

About the only thing that Washington Post journalists might find suspicious in these letters is the signature with which they end. Everyone's signature changes over the course of two decades. All of Bezos' look suspiciously like carbon copies. Perhaps Woodward and Bernstein should investigate.