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November 26, 2019

Stages of Business Growth with Steve Anderson

What are the stages of business growth? Is your goal fast business acceleration? Listen to today’s episode to learn about Amazon’s rapid growth.

Steve Anderson, author of “The Bezos Letters”.

More info, book, bonuses:


What are the most important principles for fast scaling businesses?
 They are all important. They stand on their own and interact.

Hardest may be Principle 6 -the Flywheel 

Early 2001, after the Dot Com bubble, Jim Collins published a book October 2001 Good to Great.

He was invited to Amazon by Bezos to talk about the book.

He focussed on Chapter 8 in the book, the Flywheel. 

Collins found that great companies were great at building and articulating their flywheel.

The “S” team actually sketched out the core flywheel for Amazon. It’s on the site and in the book.

It’s about the flywheel – it is heavy and takes a lot of effort to get moving.

But once it’s moving, it tends to keep moving as long as you keep feeding it energy.

At the centre of Amazon, the flywheel was growth. 

The energy inputs were:

  1. Get customers
  2. Great customer experience
  3. More customers
  4. More sales
  5. More negotiation power with manufacturers to lower price
  6. Add marketplaces – more sellers

They are still trying to feed that same flywheel today.

Any business should sketch out its flywheel. It may be something different and contribute to the stages of business growth.

The concept applies to any type of business.

How to apply this?

What is your core? For Amazon it was growth.

From the beginning, Bezos felt they had to grow rapidly. They reinvested profits into building traffic and fulfilment infrastructure.

Then – what do you do today or can do that will help with that growth? 

  1. How do I bring customers to my site? Or my Amazon listing? Maybe it’s advertising now.
  2. How do I build that customer base?
  3. How can I continue that growth? 
What other streams of income can I add to the business?

It takes time. It will probably take several months.

Jim Collins updated chapter 8 in 2019. He published a monograph on the flywheel. He talks about businesses he has worked with on the flywheel.

He also did an interview with Tim Ferriss.

Particular principles In Growth cycles and stages of business growth.


Encourage successful failure in the stages of business growth.

How does it look in practice for a scaling e-commerce business?

The concept is that you WILL fail – how will you respond to failure? And if employees fail?

Bezos says that Amazon is the best place to fail as an employee because they don’t punish failure.

It’s not about incompetence. Incompetence is not tolerated at Amazon.

But failed outcomes are.

What is risk-averse?

What is too risky?

Calculated risk.


High-velocity decisions in the stages of business growth.

The 6-page memo “Slowing down to speed up”.

(This applies to type 2 decisions as well)

They have some tools.

If they call a meeting to move forward. Powerpoint and keynote presentation is banned. Instead, the meeting leader puts out a 6-page memo.

Including things like:

– Frequently asked questions.

– Write out a future press release.

It is also not sent out ahead of the meeting; it is handed out DURING the meeting – everyone has time to read it.

Bezos says that a good memo probably takes a week.

The memo never has names on it – it comes from a team/dept.

Also part of what you get in the memo is how the customer will benefit.

Brief and debrief

The memo is what we thought we would do.

Here’s what actually happened.

Which principle tends to get neglected by scaling companies?

Principle 14 – it’s always Day One

It’s so important to Jeff Bezos.

He ends “As is my habit, I attach a copy of my 1998 letter”

I believe it’s always Day One.

It’s the name of the main building.

He wants employees, customers, shareholders to understand that the mindset is: It’s always Day one.  The excitement of the first day, it’s entrepreneurial culture. 

Someone asked Jeff What does Day Two look like?

“Stasis decline and death!”

“At some point”.

More info, book, bonuses:



Some of the links on this page are affiliate links, which means that if you choose to make a purchase, I will earn a commission. This commission comes at no additional cost to you. Please understand that I have experience with all of these companies, and I recommend them because they are helpful and useful, not because of the small commissions I make if you decide to buy something. Please do not spend any money on these products unless you feel you need them or that they will help you achieve your goals.


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