And my reflections based on my experience building Magna.
As you might know, I’ve made it an annual tradition to blog about an inspiring book I read and how it relates to my journey at Magna. Traditionally, I’ve written shortly after the New Year as the quiet time during the holidays is a perfect time to read a good book, get inspired and reflect.
This year, however, I didn’t have that same time as we were swamped in the midst of a pressing transaction in late December so I worked right through the holidays.
But — my Mom’s birthday this past week and a family trip provided me with some valuable time to take a step back outside the office and the coveted opportunity to finish a book I’d been tinkering with for a bit now; The Everything Store: Jeff Bezos and the Age of Amazon. So I finally had my time to read, think, reflect and write. Better late than never, and the annual tradition lives on!
While reading The Everything Store and after hearing other entrepreneurs discuss their reading habits over the last year, I came to a realization: books have served as my “mentors” over the past decade. Now, this could (and probably will) be a whole separate topic to blog about, but a lot of my inspiration, ways of thinking about growing a business, setting a vision and the ability to believe in endless possibility has come from reading about those who’ve done it prior with astounding results. It’s incredibly inspiring to read and understand that these seemingly untouchable entrepreneurial rockstars were too just mere mortals with an idea before they became who they “are”. Jeff Bezos is a shining example.
In the book, Brad Stone takes us through Amazon’s story, and in turn Bezos’s, in remarkably intricate detail, in only the way that somebody with information from the inside could. Although I felt the book was probably too long, there are some incredible anecdotes that demonstrate that most critically, it was and continues to be Bezos’s almost maniacally unwavering vision that serves as his and Amazon’s guiding light. And he lets nothing and nobody get in the way.
It was his vision for what Amazon could ultimately become when the internet was initially becoming an accessible reality for the common person. He saw it. He saw it and believed in it’s potential at scale before almost anybody and was willing to bet big on it. The fact that Amazon could go from being the absolute best and most efficient at selling one thing online — books — and that the expertise acquired in that process could ultimately serve as the blueprint for becoming the “everything store” and now, as we see unfolding before our eyes, the “everything company”, is a marvel, and in my view, only possible through the manifestation of a vision at an extraordinary, borderline inhuman, level.
The book recounts several incredible stories; like the Amazon acquisitions of Zappos or Diapers.com, where in both cases, Bezos expresses initial interest but lowballs the offer — then proceeds to dramatically reduce prices on the same goods that his “targets” made their brands selling because he could afford to lose money to acquire customers like nobody else could, only to go back to those same targets after they realized they couldn’t withstand the pricing pressure Amazon was inflicting upon them to buy them at even lower ball prices!
Then come the anecdotes around the spawning of new business units or products, like Amazon Web Services (AWS) and how the company again used pricing power and its ability to invest in a new product or service, losing money for years to acquire customers, in this case, simply by selling unused cloud storage and server space they already owned and warehoused.
Or the Kindle, and how Bezos and Amazon figuratively went to war with book publishers in what was an industry and business dominated by an old boys club and handshake deals meant to keep prices at their self inflated levels of comfort. Amazon was determined to disrupt and disrupt it did, always, at least in Bezos’s view, fighting for lower prices and a more efficient buying experience for the the customer.
My big takeaway and what struck me most about the book was Bezos’s steadfast, unwavering, unfiltered and unabashed approach to the way he set his vision for the company and how Amazon, in turn, operated daily and yearly and over decades to reinforce it systematically and consistently; internally with staff and externally with the world. He’s unapologetic. And while he understands that such a brazen approach may rub people the wrong way, be it staff, the media or the public at large, in his view if he truly and honestly pursues the noble ideal of building company and organization that improves lives and makes consumers’ buying abilities easier and more efficient, people eventually come around. And as we can plainly see, thus far, the masses have and continue to.
Some of the most striking and memorable passages from the book come from the Epilogue, and in particular, a letter that Stone includes written by Joy Covey, Amazon’s first ever CFO, that passed away shortly after having penned it. As I read her words, I found myself deep in reflection on our own vision and guiding light at Magna, and how we too are pushing to redefine, innovate and optimize the investment management space and make an impact while doing so. But at the same time, I found myself in a state of self reflection and questioning whether I, as the leader of the firm, am truly going far enough in my pursuit and purveyance of that vision to accomplish what I know is possible at the level that I aspire to.
I’ve included a few of these passages below along with my immediate, unfiltered thoughts on them. I hope you’ll enjoy and if looking for inspiration, certainly take some time over your next holiday to read The Everything Store.
“It may very well be that the absolute intensity of drive and focus is essential and incompatible with all of the nice management thought about consensus and gentle demeanor. I think about how effective and quick Jeff was and how important it was that he didn’t slow down too much or modify his ideas to make others feel comfortable.”
We hear about it with Bezos, Jobs and many others before them. It’s this relentless, sometimes abrasive leadership style that puts the vision above all else; especially people’s feelings. I must admit, I find myself to be more empathetic than Bezos is said to be. While I constantly refine and believe wholeheartedly in our vision at Magna to become a foremost investment management company in the world and truly redefine the future of what the industry looks like, I won’t barrel people over to get there. Especially those amongst our team, and prefer a more diplomatic, inclusive style of leadership. I think it may be worth my pushing just a bit harder in the direction of a Bezos or Jobs without going too far, for ultimately it’ll bring benefit to the company and the collective outcome for the firm, which is ultimately what I’m here to pursue above all. It’s finding that balance.
“It is easy to draw a straight line from the vision he had back then to the Amazon of today. There were a few little wobbles and detours in places, but really I don’t know any other company that has created such a juggernaut that is so consistent with the original ideas of the founder. It is almost like he fired an arrow and then followed that arc.”
I can certainly relate to this. When I started Magna out of my bedroom in 2009, I knew that I was piecing together the first block in what should ultimately have amounted to a building full of them. I was always on a quest to build something significant, make an impact and leave a legacy. And Magna, from the beginning has been a conduit to be able to accomplish that. If I look back to the first year and business and ahead to what’s now going on in year nine, I can say without a doubt that the strength, grandiosity and boldness of the initial vision has helped me recruit talent and partners at extremely high levels and accomplish things that most would probably qualify as “impossible”. And when you’re confident and communicative around the vision, you tend to attract opportunities and people who believe in it and want to be apart of seeing it to fruition. Clarity, communication and constant refinement and reflection around the vision is paramount to meaningful, lasting success.
“Jeff’s clarity, intensity of focus, and ability to prioritize, which has no doubt become ingrained in his key team, is unusual and behind his ability to keep leaping forward versus protecting existing ground.”
This line reminds me of the importance of the concept of continuous innovation — one which we value greatly at Magna. As the CEO of an organization, there’s always dozens of different things going on at once, and it’s our job to prioritize and expend our own efforts efficiently in the areas that can bring about the greatest amount of value to the firm. Keeping a mental clarity amidst the chaos is key and prioritization is vital in ensuring that the firm continues to move forward and constantly be innovating from a position of strength. Resting on laurels or past successes is a sure fire way to lose momentum and elite positioning in the marketplace, so the culture of any successful firm, and one I aspire to continue to support throughout Magna, is one of continuous questioning of the status quo to inspire innovation and lead from the front of the pack.
“Personal wealth was never discussed or really thought about. I see companies these days where thoughts of ‘exits’ are foremost in the minds of top management and board, and it is so clear that this value will infect the decision making down to the smallest choice by the most junior employee. Do we create something that is good, or just that seems good and might get us acquired or funded?”
This is something I see so often out in the marketplace and truly fail to understand. In a day like today where a for profit enterprise can bring about such material value and positive change to the world, why would people seek to short change that possibility and build solely for an exit? From the day I started Magna, I thought of it as a conduit to be able to bring about enhanced value to people within the firm, our partners and society. I don’t want to “exit” from being able to deliver on that possibility. I delivered a keynote speech in Cape Town last March in which I discussed just this principle — that purpose and vision driven organizations have the potential now, more than ever, to effect significant positive change on a global scale. I believe it firmly, and we see the proof in real time, as companies like Amazon and other global behemoths all exude a culture of pervasive vision and purpose behind the work that they tangibly produce each day.
“We believed in what we were building, and felt that our very best was needed to have a hope of accomplishing the enormous potential ahead of us … People who were highly focused on their titles, traditional status metrics, security, or their own wealth stood out vividly in the process.”
Building a great business that makes an impact is ultimately all about the people. And it’s about having amazing, creative problem solvers galvanized around a powerful vision for what’s possible that fosters the creation of businesses at the highest levels. Ultimately, in order to build a powerful company, there needs to exist a true culture of selflessness and one in which people understand that putting the firm before the individual, in all cases, will ultimately yield the greatest results for the collective group. It just doesn’t work the other way around. I have lived that value from the day I started Magna as most of our people have and it has never changed. I will continue to sacrifice personal benefit for the greater good of the firm because simply put; it works.