Seizing Opportunities for Profit - The Jeff Bezos Approach

Photo by Pepi Stojanovski on Unsplash

Jeff Bezos, the founder and former CEO of Amazon, is credited with coining the phrase “Your margin is my opportunity.” This slogan reflects the idea that businesses should be constantly looking for ways to capitalize on opportunities for profit, regardless of whether or not they have traditionally been considered “competent” in that area. This approach can be seen in the way that Apple has approached the market for computer processors.

In the past, Apple has relied on high margin Intel CPUs in their computers. However, the company made a strategic decision to invest in research and development (R&D) in order to design and manufacture their own M1 and M2 processors. This decision was not based on whether or not Apple had a “core competence” in CPU design, but rather on the belief that they could compete for the margins in this market.

This approach to business is in contrast to the “core competence” dogma, which suggests that businesses should focus on their areas of expertise and avoid entering new markets where they do not have a proven track record of success. While this approach may provide some short-term stability, it can also limit a company’s potential for growth and innovation. By contrast, the “your margin is my opportunity” mentality encourages businesses to take bold risks and seek out new opportunities for profit, even if it means entering markets where they may not have a lot of experience.

There are numerous examples of businesses that have successfully applied this approach. For instance, Amazon started out as an online bookstore, but has since expanded into a wide range of markets, including cloud computing, e-commerce, and even healthcare. Similarly, Google started out as a search engine, but has since become a leader in areas like artificial intelligence and self-driving cars. Both of these companies were able to achieve this level of success by continuously looking for ways to capitalize on new opportunities and investing in R&D to develop the necessary competencies.

However, it is important to note that this approach is not without its risks. Businesses that take on new markets without a solid foundation of experience or resources may find themselves struggling to compete. It is therefore essential that companies carefully assess the potential risks and rewards of entering new markets and make informed decisions based on this analysis.

In conclusion, the “your margin is my opportunity” mentality is a powerful approach to business that encourages innovation and growth. By constantly seeking out new opportunities and investing in R&D, businesses can position themselves for success in a rapidly changing market. However, it is important to carefully assess the risks and rewards of entering new markets, and to make informed decisions based on this analysis.