Jeff Bezos: Amazon's Business Is Better Than Baseball, You Can Score 1,000 Runs With One Swing

"When you swing, no matter how well you connect with the ball, the most runs you can get is four. In business, every once in a while, when you step up to the plate, you can score 1,000 runs. This long-tailed distribution of returns is why it's important to be bold. Big winners pay for so many experiments." –Jeff Bezos

Amazon.com, Inc. AMZN's CEO Jeff Bezos isn't afraid of taking risks. And clearly, he understands that risk and reward are precariously balanced, but the potential rewards in the marketplace can far exceed those on the grassy diamond.

His brash confidence has encouraged his success from developing the concept of the "Everything Store" into today's Amazon.

Optimism and risk-taking have been a part of Bezos' story from the very beginning, and that willful driver is unlikely to disappear anytime soon.

Related Link: How Amazon Gets AWS To $100+ Billion

So Much More Than A Grand Slam

In Bezos' recent letter to shareholders, he elaborated upon the baseball-business connection and his passion for taking risks, being willing to fail and making something:

"I'm talking about customer obsession rather than competitor obsession, eagerness to invent and pioneer, willingness to fail, the patience to think long-term, and the taking of professional pride in operational excellence. Through that lens, AWS and Amazon retail are very similar indeed.

"A word about corporate cultures: for better or for worse, they are enduring, stable, hard to change. They can be a source of advantage or disadvantage. You can write down your corporate culture, but when you do so, you're discovering it, uncovering it – not creating it. It is created slowly over time by the people and by events – by the stories of past success and failure that become a deep part of the company lore. If it's a distinctive culture, it will fit certain people like a custom-made glove. The reason cultures are so stable in time is because people self-select. Someone energized by competitive zeal may select and be happy in one culture, while someone who loves to pioneer and invent may choose another.

"The world, thankfully, is full of many high-performing, highly distinctive corporate cultures. We never claim that our approach is the right one – just that it's ours – and over the last two decades, we've collected a large group of like-minded people. Folks who find our approach energizing and meaningful.

"One area where I think we are especially distinctive is failure. I believe we are the best place in the world to fail (we have plenty of practice!), and failure and invention are inseparable twins. To invent you have to experiment, and if you know in advance that it's going to work, it's not an experiment. Most large organizations embrace the idea of invention, but are not willing to suffer the string of failed experiments necessary to get there. Outsized returns often come from betting against conventional wisdom, and conventional wisdom is usually right. Given a 10 percent change of a 100 times payoff, you should take that bet every time. But you're still going to be wrong nine times out of ten.

Related Link: Jeff Bezos Defends Amazon's Corporate Culture: "Best Place In The World To Fail"

"We all know that if you swing for the fences, you're going to strike out a lot, but you're also going to hit some home runs. The difference between baseball and business, however, is that baseball has a truncated outcome distribution. When you swing, no matter how well you connect with the ball, the most runs you can get is four. In business, every once in a while, when you step up to the plate, you can score 1,000 runs. This long-tailed distribution of returns is why it's important to be bold. Big winners pay for so many experiments."

When Bezos began materializing his Amazon dream, he was already the youngest-ever senior vp at D.E. Shaw & Co. and his firsts kept rolling in. Amazon has been the fastest company to reach $100 billion. Amazon currently has a market cap of 287.79 billion and is trading at $594.12.