Back to “Day 1”

Since 1997, founder and CEO of Amazon (Nasdaq: AMZN) Jeff Bezos has attached his inaugural shareholder letter to the end of each year’s current letter. More than just a token gesture, Bezos credits the business principles in his original letter for Amazon’s supernormal growth.

Together, the underlying principles are described by Bezos as maintaining a “Day 1” mentality. Day 1 companies typically embrace industry trends and maintain a consumer-focused (versus product or competitor) strategy.

Established companies often get paralyzed by consumer or technological trend changes, opting for the more comfortable strategy of forging ahead with what they have always done. However, that’s typically a recipe for a downfall that Bezos describes as Day 2:

“Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”

A bleak picture for companies that hesitate to adapt. Those companies would do well to derive a strategy from the old saying “If you can’t beat them, join them.” One way to “join them” is to adopt proven business principles.

That seems to be what electronic device payment manufacturer Verifone Systems Inc (NYSE: PAY) has effectively done. With processing services becoming commoditized and nimbler startups competing on hardware, Verifone has slimmed its offering and is allocating resources and solutions to better serve its customers.