We recently greenlit a particular Amazon Studios original. I told the team my view: debatable whether it would be interesting enough, complicated to produce, business terms aren't that good, we have lots of other opportunities. They had a completely different opinion and wanted to go ahead. I wrote back right away with 'I disagree and commit and hope it becomes the most watched thing we've ever made.' Consider how much slower this decision cycle would have been if the team had actually had to convince me rather than simply get my commitment.
Day 2 companies make high-quality decisions, but they make high-quality decisions slowly. To keep the energy and dynamism of Day 1, you have to somehow make high-quality, high-velocity decisions.
'Jeff, what does Day 2 look like?' 'Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.' To be sure, this kind of decline would happen in extreme slow motion. An established company might harvest Day 2 for decades, but the final result would still come.
Friends congratulate me after a quarterly-earnings announcement and say, 'Good job, great quarter.' And I'll say, 'Thank you, but that quarter was baked three years ago.'
There are two ways to extend a business. Take inventory of what you are good at and extend out from your skills. Or determine what your customers need and work backwards, even if it requires learning new skills.
We've done price elasticity studies, and the answer is always that we should raise prices. We don't do that, because we believe -- and we have to take this as an article of faith -- that by keeping our prices very, very low, we earn trust with customers over time, and that that actually does maximize free cash flow over the long term.
