For nearly a decade, Amazon was a Wall Street paradox. It was a company with skyrocketing growth, a rapidly expanding customer base, and a founder who seemed completely unconcerned with a pesky little detail: profit. While analysts and investors clamored for black ink on the bottom line, Jeff Bezos was watching a different dashboard, a set of "green signal indicators" that told him everything he needed to know.

This wasn't reckless spending; it was a masterclass in long-term thinking. Bezos knew that in the nascent world of e-commerce, the ultimate prize wasn't a profitable quarter, but total market domination. To get there, he had to ignore traditional financial metrics and focus obsessively on the inputs he could control, convinced that if he got them right, the profits would inevitably follow.

This is the story of the indicators that built an empire.

The North Star: Customer Obsession

At the heart of Amazon's early strategy was a simple, unwavering belief: start with the customer and work backward. If customers were happy, growing in number, and loyal, the business was healthy, regardless of what the income statement said.

• The Growing Customer Base: The most fundamental metric was the growth of customer accounts. A rising number meant the value proposition was working and the market was being captured.
• The Loyalty Test: Bezos paid even closer attention to the repeat customer rate. A new customer is good, but a returning customer is a vote of confidence. This metric, which grew from 46% to over 58% in 1997 alone, proved that Amazon was building real relationships, not just processing transactions.
• Deepening Trust: The company also tracked units sold per customer. As this number climbed, it signaled that customers were trusting Amazon with more of their spending, evolving from a simple bookstore into their go-to "everything store."

The Engine Room: Building a Flawless Machine

A great website was useless if the package arrived late or damaged. Bezos knew that operational excellence was another controllable input critical for success. He measured the health of his "engine room" with relentless precision.

The most critical metric was the Order Defect Rate (ODR). This single number captured a host of potential failures—late shipments, negative feedback, and credit card chargebacks. Keeping ODR low was a company-wide obsession and a direct measure of the customer experience.

Simultaneously, Amazon was scaling at a breakneck pace. To ensure the machine was running efficiently, they tracked inventory turns (proudly reporting they turned inventory 19 times a year by 2002) and celebrated the physical expansion of fulfillment centers. These weren't costs; they were investments in speed and reliability.

The Real Scoreboard: Redefining Success

While the world waited for profits, Bezos was looking at a different scoreboard, one that measured market leadership and future potential.

• Selection and Price: Two pillars of the Amazon flywheel were selection and price. The team celebrated growing the catalog to hundreds of thousands of titles and used data to prove their price competitiveness, at one point demonstrating they were 23% cheaper than rivals on a basket of bestsellers.
• Brand Power: They tracked website traffic rankings, watching as Amazon climbed from obscurity into the top 20 most visited sites, a clear sign of growing brand dominance.
• The Ultimate Metric: Free Cash Flow: For Bezos, the number that mattered most wasn’t earnings—it was Free Cash Flow (FCF). As he explained in Amazon’s 1997 shareholder letter, he would always favor maximizing future cash flows over dressing up accounting profits. Free Cash Flow—cash from operations minus the capital expenditures needed to sustain growth—was the truest measure of a business’s vitality. Unlike GAAP profits, which could be flattered by accounting assumptions, FCF revealed whether the model was self-funding. Long before Amazon showed “profitability” on paper, its positive and expanding cash flows proved the flywheel was working.

This disciplined focus was famously captured in a story from Amazon's early days. When internal data showed customer service wait times were excellent, but customer anecdotes complained of long waits, Bezos took action. In the middle of a meeting, he dialed Amazon's own 1-800 number and put it on speakerphone. The room full of executives waited in excruciating silence for over ten minutes before the call was answered. The point was made more powerfully than any report could: the real customer experience, not the metric, was what mattered.

That was the secret. By obsessing over these green signals—the controllable inputs of customer happiness, operational excellence, and market leadership—Jeff Bezos built a company that didn't just become profitable; it became an institution. He proved that sometimes, the best way to win the game is to play by a different set of rules.