A View on Costs and Cash Flows
Bezos further emphasizes the importance of bold bets rather than "timid investment decisions." This should not be mistaken for a loose approach to deploying capital. In accordance with Bezos’ personal frugality – the man is continuing to drive a Honda Accord for years, despite his wealth – he also notes the importance of the same cost-discipline in Amazon’s culture too.
"We will 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."
As Bezos continues to educate Amazons shareholders – current and prospective – on how not to focus on short term earnings numbers, it's worth noting that Amazon had cash flow from operations of $3.5m compared to operating losses of $29m in 1997. This focus on cash flows will also become a key focus of how Bezos sees value creation for shareholders.
"When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we'll take the cash flows."