It is innate for successful entrepreneurs to build large organisations based on profound learnings from failures that push them for bigger risks. And to build an appetite for absorbing bigger failures and remain focused on it as the company grows bigger is very critical, something that world’s largest online retailer Amazon CEO Jeff Bezos is quite clear about as it mentions the significance of failing big in his annual letter to shareholders.

Jeff Bezos said that everything needs to scale including the size of failed experiments as the company grows without which it is not going to be investing at a size that can help them grow. This goes for Amazon too.

“Amazon will be experimenting at the right scale for a company of our size if we occasionally have multibillion-dollar failures,” said Jeff Bezos in the letter published on Amazon’s official blog — Day One.

Such large-scale risks are part of services Amazon offer and even if one of them pays off in a big way it can “cover the cost of many losers” he said.

For instance, Amazon started making its Fire phone and Alexa-powered Echo around the same time — 2010. Jeff Bezos said that while the Fire phone was a failure, Amazon was able to take “learnings and accelerate our efforts building Echo and Alexa.”

Since that first-generation Echo (in 2013), “customers have purchased more than 100 million Alexa-enabled devices,” said Jeff Bezos.

Amazon has been publishing its annual letter since 1997 through which Jeff Bezos shares the company’s future plans. He opened the letter talking about the growth of third-party sales from 3 per cent in 1999 of the total sales to 58 per cent in 2018.

While Amazon’s first-party sales grew 25 per cent from $1.6 billion in 1999 to $117 billion in 2018, the third-party sales have grown from $0.1 billion to $160 billion – a compound annual growth rate of 52%, Jeff Bezos said.

Bezos also highlighted his focus on global retail of which Amazon “represents a low single-digit percentage,” he said. He described customers experience at Amazon Go, which allows customers to walk in, shop and leave the retail store without queuing, to be ‘magical’.

Amazon currently has 10 stores of Amazon Go in the US.