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Bezos on Innovation

Posted by: Jena McGregor on April 21, 2008

In last week’s edition, I put together our annual package on the World’s Most Innovative Companies. The theme of this year’s package: How the smartest companies on innovation are thinking about the topic in a downturn. We turned to Jeff Bezos, CEO and founder of, for his thoughts on the topic, as the e-commerce maverick has weathered some pretty tough storms, and kept spending through the worst of it. A couple of thoughts from Bezos that come from my colleague Peter Burrow’s Q&A are here:

—On innovating under constraints: “I think frugality drives innovation, just like other constraints do. One of the only ways to get out of a tight box is to invent your way out.”

—On customer needs: “Companies get skills-focused, instead of customer-needs focused. When [companies] think about extending their business into some new area, the first question is ‘why should we do that—we don’t have any skills in that area.’ That approach puts a finite lifetime on a company, because the world changes, and what used to be cutting-edge skills have turned into something your customers may not need anymore. A much more stable strategy is to start with ‘what do my customers need?’ Then do an inventory of the gaps in your skills.”

—On failure: “Also, people who want to pioneer and find new ways of doing things know there are going to be ups and downs, that there will be profound moments of success and failure. And that’s O.K. It’s not an experiment if you know it’s going to work.”

Reader Comments

Bruce Temkin

April 23, 2008 1:00 AM

If you've read my blog (, then you know that Bezos' comments are music to my ears. One of my core mantras is: "Who are your target customers; what are their goals; and how can you help them achieve those goals." Firms need to be able to answer those questions for every project that touches customers. I also defined a three step process for innovation: 1) Uncover the customer need; 2) Design a disruptive strategy; and 3) Evaluate the opportunity.

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