Where risk is intentional but secondary - gambling, speculative financial products or thrill seeking adventure.Where risk is primary factor - nuclear energy, mining, metallurgy, intensive industrial processes, dealing with emergencies.On a broad basis, we can define 3 categories for risk – The human mind does not appreciate probability instinctually. Humans have high risk consciousness but low risk assessment capability. To invent you have to experiment, and if you know in advance that it’s going to work, it’s not an experiment.” Jeff Bezos wrote in Amazon’s first annual letter, in 1997, “Given a 10 percent chance of a hundred times payout, you should take that bet every time.” He also wrote “Failure and invention are inseparable twins.
The risk is existential, make or break, defining the future of the company Per his narrative, these massive investments in consumer benefits that would stand the test of time. Amazon was about lower cost, greater selection, and faster delivery. This happened because Jeff Bezos made risk an essential part of the growth storytelling. By comparison, Amazon raised $2.1 billion in investors’ money before the company broke even.
Research on the performance of successful VC-backed tech companies in the 1990s shows that they raised less than $50 million before showing a return to investors. Dan Loeb, in his Q1 2022 letter, said "to be an investor is to live constantly at the intersection of story and uncertainty."Īmazon has been the largest value creation story of recent times. Money is money because we all accept it as such. We know that belief systems are created through common acknowledgment and common imagination. Brand Purpose and Responsible Marketing walk into a bar.
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