Amazon CEO Jeff Bezos says that he has made "billions of dollars of failures" at Amazon, and that it doesn't matter at all.
Speaking at Business Insider's Ignition conference, Bezos says that his philosophy for Amazon is to encourage people to make bold bets and iterate on them, while still accepting that some might fail.
"If you're going to take bold bets, they're going to be experiments," he says. "And if they're experiments you don't know ahead of time if they're going to work. Experiments are by their very nature prone to failure. But a few big successes compensate for dozens and dozens of things that didn't work."
Bezos highlighted a few big, bold bets that ended up being huge boons to the company that "pay for a lot of the experiments": Amazon Web Services, Kindle, Amazon Prime, and Amazon Marketplace, the company's third-party seller business. Those successes give Amazon the opportunity to reinvest in itself and try new things.
Amazon's first smartphone — the Fire phone — was largely panned as a flop and led to $170 million charge in unsold inventory in Q3.
Bezos says that it's still very early for the device, and Amazon plans to keep iterating on it for years to come. He believes it's going to succeed, but even if didn't, it was a bet worth making.
"I've made billionaires of dollars of failures at Amazon.com," Bezos says, joking that it could be like "a root canal with no anesthesia" if he tried to dwell on them.
"None of those things are fun, but they don't matter," he says. "What really matters is that companies that don't continue to experiment — companies that don't embrace failure — they eventually get in a desperate position, where the only thing they can do is make a 'Hail Mary' bet at the very end."
