Part of my series on what, why and how we do things at RunSignup, Founder’s Corner.
I was a bit of an economics nerd growing up. I subscribed to Barrons for a while and read my Dad’s Forbes and Fortune magazines. At Easter, we would drive to visit my Grandparents in Parkersburg, West Virginia. We stayed at my Granny’s (my Mom’s Mother) house. And it coincided with the time of year that large companies would send out glossy Annual Reports, and my Grandmother received about a half dozen from companies like Exxon and the Souther Company (power company). I loved reading them. The annual CEO letters, figuring out the financials, checking out stock price ranges and price/earnings ratios.
I’ve continued reading annual reports, changing my favorites over the years. Over the past dozen years or so my two favorite have been the annual Berkshire Hathaway letter from Warren Buffet, and the annual Amazon letter from Jeff Bezos, and this year Andy Jassey, the new CEO (and leader of AWS since the beginning). I love the Berkshire webpage index page for their annual letters – it reminds me of my first experiment with using HTML tables in 1994.
The thing I love about these two sets of annual letters (it is worth going back and reading all of them for both companies to kind of watch in fast forward how they evolved – I have done this at least a half dozen times for each) is how they consistently express the main theme of Long Term investments. Warren expresses this succinctly this year:
Please note particularly that we own stocks based upon our expectations about their long-term business performance.
Warren Buffet – 2021 Berkshire Hathaway Investor Letter
And Andy Jassey concludes his shareholder letter with the long term focus as well:
Adopt a Long-term Orientation: We’re sometimes criticized at Amazon for not shutting much down. It’s true that we have a longer tolerance for our investments than most companies. But, we know that transformational invention takes multiple years
Albert Einstein is sometimes credited with describing compound interest as the eighth wonder of the world (“He who understands it, earns it. He who doesn’t, pays it”). We think of iterative innovation in much the same way. Iterative innovation creates magic for customers. Constantly inventing and improving products for customers has a compounding effect on the customer experience, and in turn on a business’s prospects.
Andy Jassey, Amazon CEO, Letter to Shareholders
This annual reminder helps us at RunSignup have faith in our long term approach to the endurance market where we have become a 12 year “overnight success”. And it gives us a feeling of confidence as we look to the broader event market with our TicketSignup offering over the next dozen years. Too many companies are focused on the short term rather than the long term. The most obvious example of this was Eventbrite’s response to the pandemic of laying off 50% of their staff and our response of cutting everyone’s compensation by 50% and keeping everyone.
Anyway, here are some nuggets from this year’s letters…
We had been iterating on and remaking our fulfillment capabilities for nearly two decades. In every business we pursue, we’re constantly experimenting and inventing.
One of the lesser known facts about innovative companies like Amazon is that they are relentlessly debating, re-defining, tinkering, iterating, and experimenting to take the seed of a big idea and make it into something that resonates with customers and meaningfully changes their customer experience over a long period of time.
Andy Jassey, Amazon CEO, Letter to Shareholders
Andy writes about the idea of what we refer to as Continuous Improvement. For companies chasing their quarterly results or trying to land a round of venture capital or ones simply trying to survive, the idea of taking time to incrementally improve is simply not tolerated. So our patience and realization that all good things take time is a competitive advantage to our company, much as it has been to Amazon.
Andy talks about this concept a number of times in his first annual letter:
We had been iterating on and remaking our fulfillment capabilities for nearly two decades. In every business we pursue, we’re constantly experimenting and inventing.
One of the lesser known facts about innovative companies like Amazon is that they are relentlessly debating, re-defining, tinkering, iterating, and experimenting to take the seed of a big idea and make it into something that resonates with customers and meaningfully changes their customer experience over a long period of time.
Andy Jassey, Amazon CEO, Letter to Shareholders
Give Teams the Right Tools and Permission to Move Fast: Speed is not pre-ordained. It’s a leadership choice. It has trade-offs, but you can’t wake up one day and start moving fast. It requires having the right tools to experiment and build fast (a major part of why we started AWS), allowing teams to make two-way door decisions themselves, and setting an expectation that speed matters. And, it does. Speed is disproportionally important to every business at every stage of its evolution. Those that move slower than their competitive peers fall away over time.
Define a Minimum Loveable Product (MLP), and Be Willing to Iterate Fast: Figuring out where to draw the line for launch is one of the most difficult decisions teams must make. Often, teams wait too long, and insist on too many bells and whistles, before launching. And, they miss the first mover advantage or opportunity to build mindshare in fast-moving market segments before well-executing peers get too far ahead.
Andy Jassey, Amazon CEO, Letter to Shareholders
Looking at all of these quotes reminds me of the approach we take at RunSignup. Taking this approach requires thought and investment. As I’ve discussed in other Founder’s Corner blogs, one of the keys is the infrastructure we set up for our software development and rapid release of software. We do over 2,000 releases per year of our system. And we have one system that covers all of our customers so every customer gets the benefit of each release, and of course the ability to give us immediate feedback that helps us learn and iterate.
Summary
While our business is very different than Berkshire Hathaway and Amazon – and obviously a lot smaller – we can learn from their success.
Warren also had something that encourages me to keep writing these Founder’s Corner blogs. More for me to help clarify thoughts and share what we are trying to do with our broad community of customers, employees and investors.
Teaching, like writing, has helped me develop and clarify my own thoughts. Charlie calls this phenomenon the orangutan effect: If you sit down with an orangutan and carefully explain to it one of your cherished ideas, you may leave behind a puzzled primate, but will yourself exit thinking more clearly.
Warren Buffet – 2021 Berkshire Hathaway Investor Letter
