Jeff Bezos’ Criteria For A Great Business

Jeff Bezos’ Criteria For A Great Business by Greg Speicher

Warren Buffett famously uses four filters when selecting an investment.

  1. Does he understand the business?
  2. Does it have a competitive advantage?
  3. Does it have able and trustworthy management?
  4. Can it be purchased at an attractive valuation (margin of safety)?

Jeff Bezos’ Criteria For A Great Business

In Amazon.com’s 2014 Letter to Shareholder, Jeff Bezos begins with his own set of criteria for a “dreamy business offering”.

  1. “Customers love it,
  2. it can grow to very large size,
  3. it has strong returns on capital, and
  4. it’s durable in time – with the potential to endure for decades.”

Bezos writes that, “When you find one of these, don’t just swipe right, get married.”

Bezos makes no mention of valuation.

In my estimation, there are not many businesses that meet these criteria. Finding one a year and buying right would be more than enough.

Jeff Bezos' Criteria For A Great Business



About the Author

Greg Speicher
GregSpeicher.com was founded in 2009 by Greg Speicher. Greg is a private investor who has been investing, studying and writing about the the markets since 2006. Greg built several successful offline businesses including an Inc. 500 Company which he co-founded. Buffett stated, “I am a better investor because I am a businessman.” It is in that spirit that Greg brings his years of business experience to investing. ?? Greg received his B.A. in philosophy Magna Cum Laude from the University of St. Thomas in Rome, Italy, and attended the MBA Program at the Wharton School of the University of Pennsylvania. He also studied with Bruce Greenwald at the Value Investing Executive Education Course at Columbia University.