Amazon's 1997 shareholder letter is a free MBA class on leadership - here are 4 lessons from it

• Amazon's 1997 shareholder letter offers brilliant business lessons from Jeff Bezos.
• Alex Lieberman, executive chairman and cofounder of Morning Brew, recently posted on Twitter about those lessons.
• His tweets outlining what Bezos did right have been reprinted with permission below.

Editor's note: The below article began as a Twitter thread and has been republished with permission.

Amazon's 1997 shareholder letter provides a glimpse into the brilliance of Jeff Bezos. It's a free MBA class in strategy and leadership. Here are four lessons from it.

Lesson 1: Choose your words wisely

The letter is 1,617 words. The word 'customer' occurs 25 times.

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That word focuses Bezos and focuses the people that look to him for guidance. Jeff knows that while Amazon's mission is simple, execution is nearly impossible.

To succeed, the company's north star must be unmistakable to everyone. Everything in this letter comes back to the customer.

Lesson 2: Have conviction

Every great entrepreneur has one thing in common: Conviction.

It's about having a deep-rooted (likely contrarian) belief in an opportunity. An opportunity that is untapped, undervalued, and unappreciated.

Jeff Bezos shows wild conviction in the early days of Amazon. He sees a tidal wave that is the Internet, and he knows that if Amazon is in the best position to surf that wave, it'd become massive.

Lesson 3: Always acknowledge trade-offs

You can't be a clear thinker without being honest about a decision's trade-offs. Every decision has them. Despite his confidence, Bezos saw incredible risk in Amazon's grand plan.

Jeff observed two major risks:

1) Other large, public companies saw opportunity in the internet like he did

2) It's a market defined by network effects. Coming in second wasn't an option.

This meant speed and heavy investment were mandatory.

Lesson 4: Set expectations early and often

I have found that the No. 1 failure of managers is an inability to set expectations. Sometimes it's out of fear. Other times it's an inability to communicate. But it is crucial to building any business for the long-term.

Jeff Bezos does this masterfully. From day one, he made it crystal clear to shareholders that investing in Amazon is opt-in. If you expect business performance quarterly … don't invest. If you expect business performance over the long-term … join the party.

Alex Lieberman is the executive chairman and cofounder of Morning Brew.