Tuesday, August 16, 2022

Money and business lessons from world’s new richest person

The coveted and revered throne of the World’s Richest Person is no longer occupied by Microsoft billionaire Bill Gates. It has a new king in the name of Jeff Bezos, who is popularly known as the founder of online shop Amazon and the US-based newspaper, The Washington Post. Mr. Bezos whose current net worth is quoted at $109 billion by Forbes dethroned Bill Gates in late 2017 when his wealth peaked at $104.4 billion to eclipse Gates’ $91.9 billion. The rise of Bezos though has not been a walk along the beach. It has taken him smart business and money maneuvers that you can learn from. Here are some of them:

Put your customer ahead of competitor: If you are an entrepreneur, you must prioritize your customer ahead of your competitor. Do not make the mistake of waiting to see what move your competitor will make and then plan on how to counter it. Instead, listen to your customers’ needs and base your growth on providing the solutions to these needs. By listening to his customers, Bezos launched the Amazon Web Services (AWS) subsidiary that has since grown to a net worth of over $10 billion. Amazon’s biggest projects such as ebook readers and Kindle tablets have also been responses to his customers’ needs. “Many companies describe themselves as customer-focused, yet most are competitor-focused. They see what others are doing, and then work to catch up or go one better,” he cautioned in a 2015 business letter.

Integrate your employees: When running an enterprise, you should strive to make your employees feel and operate as though they own the business. For example, 20 years ago, Bezos said that his aim was to have a group of talented employees at Amazon who’d not only get cash payments but become shareholders in the company. “This is because our success will be largely determined by Amazon’s ability to attract and retain a motivated employee base, each of whom must think like, and actually be an owner in the business.”

Leave the couch: You will not get wealthy by playing couch potato. Bezos says that you must venture out and take calculated investment risks both in business and financial investments. These ultimately have the highest returns. “At Amazon, we are willing to go down a bunch of dark passageways and occasionally we find something that really works,” he said. If you are in employment and have a nose for business, consider taking the jump into entrepreneurship. For example, in 1994, Bezos quit his high-paying job as a hedge fund manager to start Amazon.

Prepare to fail: You will not always get things right. It is important that you prepare to fail and know how to evolve your business and money ideas into profitable investments. For example, Bezos has a streak of business ideas that have ended disastrously. At some point, he launched an auction site called Amazon Auction. It was supposed to compete with eBay but failed and was shut down. He then launched zShops which also ended in failure. Bezos got it right in his third trial with the launch of Amazon Marketplace which now accounts for over 40 per cent of all units sold on Amazon.

Prioritize growth over glamour: Don’t pursue profits over growth. It took Bezos’ Amazon about six years to become highly profitable. In this period, Amazon made Sh. 515 million average annual profit compared to a Sh. 103 billion annual turnover! This is because Bezos prioritized growth over profitability, kept his prices as low as possible, and reinvested as much revenue back into the company as possible. Locally, the debt-fueled rise and fall of Nakumatt is a contrasting case in point.

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