2003 Shareholder Letter (with a nice anaolgy) & 1997 Letter re-printed:

2003_-Shareholder_-Letter041304.pdf

…from the 2003 Shareholder Letter

<aside> 💡 “Long-term thinking is both a requirement and an outcome of true ownership. Owners are different from tenants. I know of a couple who rented out their house, and the family who moved in nailed their Christmas tree to the hardwood floors instead of using a tree stand. Expedient, I suppose, and admittedly these were particularly bad tenants, but no owner would be so short-sighted. Similarly, many investors are effectively short-term tenants, turning their portfolios so quickly they are really just renting the stocks that they temporarily “own.”

</aside>

…from the original 1997 Shareholder Letter

<aside> 💡 “We believe that a fundamental measure of our success will be the shareholder value we create over the long term.”

</aside>

Because of our emphasis on the long term, we may make decisions and weigh tradeoffs differently than some companies. Accordingly, we want to share with you our fundamental management and decision-making approach so that you, our shareholders, may confirm that it is consistent with your investment philosophy:

• focus relentlessly on our customers
• make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions
• measure our programs and the effectiveness of our investments analytically, to jettison those that do not provide acceptable returns, and to step up our investment in those that work best. We will continue to learn from both our successes and our failures
• make bold rather than timid investment decisions where we see a sufficient probability of gaining market leadership advantages
• when forced to choose between optimising the appearance of our GAAP accounting and maximising the present value of future cash flows, we’ll take the cash flows
• share our strategic thought processes with you when we make bold choices (to the extent competitive pressures allow)
• work hard to spend wisely and maintain our lean culture. We understand the importance of continually reinforcing a cost-conscious culture, particularly in a business incurring net losses
• balance our focus on growth with emphasis on long-term profitability and capital management. At this stage, we choose to prioritise growth because we believe that scale is central to achieving the potential of our business model
• continue to focus on hiring and retaining versatile and talented employees, and continue to weight their compensation to stock options rather than cash. We know our success will be largely affected by our ability to attract and retain a motivated employee base, each of whom must think like, and therefore must actually be, an owner.

“It’s not easy to work here (when I interview people I tell them, “You can work long, hard, or smart, but at Amazon.com you can’t choose two out of three”), but we are working to build something important, something that matters to our customers, something that we can all tell our grandchildren about. Such things aren’t meant to be easy. We are incredibly fortunate to have this group of dedicated employees whose sacrifices and passion build Amazon.com.”