Today's Seth Godin post on innovation, guts, and generosity is Seth Godin at his best. One of the reasons why I like it is that I keep thinking that "innovative" has become too much of a buzzword. It's similar to walking around and telling everybody you're a cool person. If you have to explain it to everyone, then you're probably not cool. At the same time, I also find his generosity angle to be a clever one. Here is Seth's post in its entirety (short and sweet, as usual):

Innovation is guts plus generosity

Guts, because it might not work.

And generosity, because guts without seeking to make things better is merely hustle.

The innovator shows up with something she knows might not work (pause for a second, and contrast that with everyone else, who has been trained to show up with a proven, verified, approved, deniable answer that will get them an A on the test).

If failure is not an option, then, most of the time, neither is success.

It’s pretty common for someone to claim that they’re innovative when actually, all they are is popular, profitable or successful. Nothing wrong with that. But it’s not innovative.

Allow generosity to take the lead and you’ll probably discover that it’s easier to find the guts.

Jeff Bezos published his annual letter to shareowners this week. You can find it here. And as is his usual practice, he has attached his 1997 letter to shareholders at the bottom of it. This is his "Day 1" and he clearly likes the reminder.

I was somewhat surprised to learn that 58% of physical gross merchandise sales on Amazon are now by independent third-party sellers. This number has been steadily increasing almost every year since 1999.

And this is despite the fact that first party sales -- products sold by Amazon -- have grown at a compound annual growth rate (CAGR) of 25% during this same time period. Amazon excels at the fulfillment component and you can have them do that for you as a third-party seller.

There are a number of other interesting facts sprinkled throughout the letter, but I particularly liked the bits on "intuition, curiosity, and the power of wandering." Here is an excerpt on how Amazon is working to scale the size of its failures:

As a company grows, everything needs to scale, including the size of your failed experiments. If the size of your failures isn’t growing, you’re not going to be inventing at a size that can actually move the needle. Amazon will be experimenting at the right scale for a company of our size if we occasionally have multibillion-dollar failures. Of course, we won’t undertake such experiments cavalierly. We will work hard to make them good bets, but not all good bets will ultimately pay out. This kind of large-scale risk taking is part of the service we as a large company can provide to our customers and to society. The good news for shareowners is that a single big winning bet can more than cover the cost of many losers.

A lot has already been said and written about accepting failure in life and business. Nobody wants to fail, but it can happen when you're trying to "imagine the impossible."

The two nuances here are that failures should scale along with the company. And that "large-scale risk taking" can actually be construed as a service. It might mean that the impossible becomes possible.

This evening I was at my alma mater, the Rotman School, for a conversation between Roger Martin (the former dean of the school) and Canadian-Jamaican billionaire, Michael Lee-Chin. Michael is one of the most disciplined, consistent, and charismatic people I have never met. (The soothing Jamaican accent probably doesn't hurt.)

One of his points this evening was about compounding. Not just compound interest, which is what many of you are probably thinking, but compounding in life. The thing about compounding is that the real benefits come later on. That's why personal finance people will tell you that the key to financial freedom is to start saving and investing early on.

The problem with this is that, well, the real benefits come later on. And it can be frustrating when the rewards don't seem to match the efforts. That's why grit is so important and why some have suggested that it is a far better predictor of future success than things like IQ or a GPA score. There's no substitute for hard work.

In the development business, projects tend to take a long time. We started working on Junction House back in 2016 and here we are now in 2019 planning for construction. So I thought this evening was a good reminder that there's lots of value in long-term goals and that more of us (including companies) should be thinking along these lines.