8 things we learned from Jeff Bezos’s annual letters

As we prepare to post our 2025 Annual Letter, we’ve been reflecting on both Warren Buffett’s and Jeff Bezos’s annual letters. It’s a true gift for those of us building enduring, long-term businesses to have these letters to guide us.

If you were wondering, these are our favorite books on the two:

• Jeff Bezos: Invent and Wander: The Collected Writings of Jeff Bezos by Walter Isaacson

• Warren Buffett: The Snowball: Warren Buffett and the Business of Life by Alice Schroeder

Using our friend NotebookLM, we synthesized Bezos’s letters into this handy 12-slide presentation.

8 lessons we took from Bezos’s annual letters (The Day One Code)

At Purpose Group, we often talk about building and acquiring businesses that aren’t just profitable, but enduring. We look for companies that have a reason to exist beyond the next quarter. If we want to understand the blueprint for an “enduring franchise,” there is no better textbook than the 23 years of shareholder letters written by Jeff Bezos.

Bezos didn’t just build a retail giant; he codified a way of thinking—the “Day One” philosophy—that keeps a company from sliding into stasis and eventual irrelevance. Here are eight lessons from the Bezos Day One Code that we can apply to how we buy, build, and lead our portfolio companies.

1. Relentless Long-Termism is the Competitive Advantage

Bezos’s very first shareholder letter in 1997 was titled “It’s All About the Long Term”. He was clear from the start: he would make decisions and weigh trade-offs differently than others. For Purpose Group, this means prioritizing maximizing the present value of future cash flows over the optics of short-term accounting. If we are in this for the long haul, we have the luxury of being patient, which is a massive advantage when the rest of the world is chasing instant gratification.

2. Move from Customer Focus to Customer Obsession

Most companies say they focus on the customer, but Bezos demands obsession. He argues that customers are “loyal to us right up until the second that someone else offers them a better service”. We must encourage our leaders to wake up every morning “terrified” not of the competition, but of their customers. This obsession isn’t just a strategy; it’s a mission larger than the company itself, designed to build the world’s most customer-centric organization.

3. Fend Off “Day 2” (The Beginning of the End)

In the Bezos code, “Day 2 is stasis, followed by irrelevance, followed by excruciating, painful decline, followed by death”. To keep our companies in “Day One” vitality, we have to resist proxies—where the process becomes more important than the result. A junior leader might defend a bad outcome by saying they “followed the process,” but an enduring leader investigates how to improve the process to serve the customer better.

4. High-Velocity Decision Making

Speed matters in business. Bezos observes that large organizations often make high-quality decisions, but they make them too slowly. To stay agile, we should adopt the “70% rule”: most decisions should be made with about 70% of the information you wish you had. If you wait for 90%, you’re likely being too slow. For reversible decisions—“two-way doors”—we should empower our teams to move fast and course-correct later if needed.

5. High Standards are Contagious (and Teachable)

We often think of high standards as an innate trait, but Bezos argues they are teachable and domain-specific. If you bring a new person onto a team with world-class standards, they will adapt; the opposite is also true. Crucially, maintaining high standards requires teaching “scope”—giving people a realistic understanding of how much effort a high-quality result actually takes. A “perfect” memo doesn’t take a day; it takes a week or more of rewriting and editing.

6. Work Backwards, Not Skills-Forward

Many firms look at what they are already good at and ask, “What else can we do with this skill?” Bezos calls this a “skills-forward” approach, and he warns it leads to obsolescence. Instead, we should work backwards from customer needs. This often requires us to “exercise new muscles” and acquire competencies that feel uncomfortable at first—like when Amazon, a book retailer, had to learn how to build hardware to create the Kindle.

7. Your Failures Must Scale with You

If we want to invent, we have to be willing to fail. Bezos is unapologetic about this: “If the size of your failures isn’t growing, you’re not going to be inventing at a size that can actually move the needle”. As Purpose Group grows, our “failed experiments” should scale too. A single “home run” like AWS can pay for a thousand failed experiments, but you’ll never hit that home run if you aren’t willing to strike out at scale.

8. Guard Your Distinctiveness Against the “Typical”

The universe constantly pulls at you to be normal, to reach a state of equilibrium with your environment. Bezos uses the analogy of body temperature: a living body must work hard to stay warmer than its surroundings; once it stops that work, it reaches equilibrium and dies. For our companies to survive, they must maintain their distinctiveness. Being original isn’t free—it requires continuous energy and a price must be paid for it—but it is the only way to remain an “enduring franchise”.

Analogy for the “Day One” Mindset: Maintaining a “Day One” company is like riding a bicycle up a steep hill. The moment you stop pedaling (the “work” of maintaining distinctiveness and customer obsession), you don’t just stay in place; the gravity of “Day 2” immediately begins to pull you backward toward the bottom. To keep moving forward, you must treat every morning as if the climb is just beginning.

Onward—with purpose!