The Regret Minimization Framework
One of the most helpful ideas that I got from the book ‘The everything store’, a book about the story of Amazon and its founder Jeff Bezos, is the concept of a Regret Minimization Framework.
The Regret Minimization Framework is something that Bezos came up with early on in his career. When Jeff Bezos thought about founding Amazon in 1994, this wasn’t an easy decision. He had a very stable job in finance, with a good income and a predictable career path. Bezos knew that the vision that he had for Amazon might not come true, that he could fail. So should he really risk his safe career in finance for a plan that might not work out?
When faced with this tough decision, Bezos came up with what he calls a Regret Minimization Framework. He tried to imagine himself at the age of 80, looking back on his life. What decision would he regret more: Trying to build Amazon and failing, or never trying at all?
Jeff Bezos quickly realized that he would never regret giving his grand vision of building an e-commerce retailer a shot, even if he failed. Failure wouldn’t bother him anymore at the age of 80. What he would regret though is to never even have tried it. This is something that would haunt him even at the age of 80, he says.
So in in order to minimize his regret in the future, he had to make uncomfortable decisions in the present. Bezos knew that his Regret Minimization Framework would allow him to maximize his life satisfaction in the long run, that taking risks would pay off in the future. Maybe not in the form of success and money, but definitely in the form of minimized regret.
This also demonstrates the extraordinary long-term vision that Bezos had from the very start. He was not concerned with what he is giving up in the short-term, because he was focussed on maximizing his happiness over a lifetime.
Jeff Bezos’ long-term focus does not only show as a part of the Regret Minimization Framework, but also in his way of thinking about Amazon as a business. He is not concerned with making a quick profit (in fact, after 20 years in business, Amazon still is barely profitable). Instead, he wants to build a company that lasts. He is building Amazon thinking several decades ahead and that is what he bases his management decisions on.
I shot a video about the long-term approach of Jeff Bezos and why this is something we all can learn and profit from:
So when you have to make life decisions, may the be big or small, it might help you to think of Jeff Bezos and his Regret Minimization Framework. Don’t think about what will bring the biggest results in the short-term, but rather consider what will bring the least regret in the long run.