Steve Jobs, invited Jeff Bezos to the Apple campus, Cupertino in 2003.

Steve Jobs, invited Jeff Bezos to the Apple campus, Cupertino in 2003.

An Apple employee took Jeff and his VPs to a conference room with a Windows PC and two platters of takeout sushi for dinner.

After the informal chat and dinner, dabbing his mouth with a napkin, Jobs announced that Apple had just finished building their first Windows application.

Jobs calmly and confidently told them that he thought it was the best Windows application anyone had ever built. Jobs then personally gave them a demo of the soon-to-be launched iTunes for Windows.

During the demo, Jobs talked about how this would transform the music industry. Now anyone with a computer would be able to purchase digital music from Apple on PC or a Mac.

Jobs said that CDs would go the way of other outdated music formats like the cassette tape, and their importance and portion of overall music sales would drop quickly.

His next comment could reasonably be construed as either a matter-of-fact statement, an attempt to elicit an angry retort, or an attempt to goad Jeff into making a bad business decision by acting impulsively. Jobs said,

“Amazon has a decent chance of being the last place to buy CDs. The business will be high-margin but small. You’ll be able to charge a premium for CDs, since they’ll be hard to find.”

Jeff did not take the bait. We were their guests and the rest of the meeting was uneventful. But we all knew that being the exclusive seller of antique CDs did not sound like an appealing business model.

While it is tempting to suggest the meeting impacted Jeff’s thinking, only Jeff can speak to that. What we can say is what Jeff did and did not do afterward. What he didn’t do (and what many companies would have done) is to kick off an all-hands-on-deck project to combat this competitive threat, issue a press release claiming how Amazon’s new service would win the day, and race to build a copycat digital music service. Instead, Jeff took time to process what he learned from the meeting and formed a plan. A few months later, he appointed a single-threaded leader—Steve Kessel—to run Digital, who would report directly to him so that they could work together to formulate a vision and a plan for digital media.

In other words, his first action was not a “what” decision, it was a “who” and “how” decision. This is an incredibly important difference.

Jeff did not jump straight to focusing on what product to build, which seems like the straightest line from A to B. Instead, the choices he made suggest he believed that the scale of the opportunity was large and that the scope of the work required to achieve success was equally large and complex.

He focused first on how to organize the team and who was the right leader to achieve the right result.