[F5] First Shareholder Letters
Lessons from Pixar, Google, Amazon, Bank One, and Danaher
Welcome to another Free Friday! Today’s post is the third of a new series I’m doing with Altos Ventures’ Director of Research Nick Chow. In this series, we’ll share five pieces of content, whether they be books, booklets, novels, movies, tv shows, reference guides, or anything else, grouped for a specific reason.
We’re still experimenting with the format of Friday 5s, but for this one we’ve split it up into two parts. If you have any suggestions or feedback, please feel free to share it with us on Twitter, Substack (respond to this email or comment below), or LinkedIn.
Theme: Why we grouped these books together.
Letters: An overview and takeaways from each book.
Previous Editions
Theme
A shareholder letter should be one of the clearest windows into how a company sees itself—and how its leaders think. But like anything in business (and in life), it depends on how seriously the exercise is taken. Some executives skip them altogether, others treat them like homework, resulting in dutiful, dry, and uninspired pieces of paper. But when written well, a shareholder letter is one of the richest artifacts in investing.
The best letters frame how leaders think about topics such as time, risk, culture, and capital. They provide context and clarity. They reflect a company’s overall philosophy—not just its past year.
And while many of these letters are written with the help of communications teams—or even ghostwritten entirely—the strongest ones still carry the imprint of the person at the top. You can feel the influence of a founder who’s thought deeply about the business and wants to communicate more than just the headlines.
For long-term investors, that’s a powerful signal.
Even when filtered through teams, great letters retain a certain voice. They reflect clarity of thought, coherence of strategy, and often, a founder’s distinct point of view. They’re not bullet-pointed talking points. They’re essays with a thesis.
The letter doesn’t have to be witty or waxing poetic, but it should be intentional. It should reflect what matters most to the people running the business—and what kind of business they believe they’re building.
Over time, shareholder letters build a kind of living archive. They help investors track the evolution—or devolution—of leadership. But we find a particular kind of insight in the first letter.
The first letter is a moment of transition. It’s often the first time a founder speaks directly to the broader investment world, outside of roadshows and pitch decks. In it, you can see what they value, how they frame the opportunity, and what kind of future they’re aiming to build. There’s usually less polish and more energy—and sometimes, more vulnerability.
Years later, that first letter becomes a lens for assessing follow-through: Did the company stay on mission? Did the tone shift? Did the leader grow? Or did they start writing more like a politician than a builder?
Shareholder letters are one of the few investor documents where tone matters as much as content. The best letters don’t just report results—they lay out frameworks, explain decisions, and contextualize trade-offs. But it’s not just about painting a rosy picture—they also admit when things don’t go according to plan.
That level of candor is rare. And valuable.
What’s said between the lines often matters more than the information presented. Does the CEO speak clearly about what’s working and what’s not? Do they simplify complexity without dumbing it down? Or do they default to buzzwords and abstractions?
Over time, reading a wide range of letters helps investors build pattern recognition. You start to notice which leaders are trying to build trust—and which are just trying to get through to the next quarter.
Shareholder letters aren’t just historical summaries. In many cases, they’re leading indicators of how a company is led. A letter that’s thoughtful, focused, and well-framed is often a proxy for how the business is being run.
Founders who care about the long game usually care about how they communicate. They know that writing forces clarity. And they treat the letter not as a box to check, but as a chance to build alignment with the people who’ve bet on them.
The presence of a great letter doesn’t guarantee a great business, or even a great leader. But in our experience, it often correlates with the kind of leadership that compounds over time.
What follows is a curated collection of five exceptional first shareholder letters—each one a snapshot of leadership at its most thoughtful and revealing. These are not the only great letters out there (otherwise this very newsletter you’re currently reading would not exist), but they’re ones that have stuck with us. In each, we’ve highlighted a few quotes or passages that capture the founder’s mindset and approach.
Whether you’re an investor, operator, or simply someone interested in how good companies get built, we hope these letters offer a useful lens—not just for evaluating businesses, but for understanding the people who lead them.
*Note: While we highlighted “founders” in the above essay, we don’t strictly mean founders. For example, Steve Jobs did not found Pixar and Jamie Dimon did not found Bank One, but they shaped their respective companies as much as, if not more, than a founder did.
Letters
Steve Jobs’ 1996 Pixar Annual Report Shareholder Letter
In 1996, Pixar was fresh off the success of Toy Story and navigating its first full year as a public company. But the big news was still to come. Steve Jobs’ annual letter recounts how Pixar quietly orchestrated a new, decade-long partnership with Disney, marked by shrewd negotiations and an unshakeable faith in the studio’s creative capabilities. Steve Jobs is often lauded for his product genius and his uncanny ability to intuit what people will want before they do. But in this 1996 letter to Pixar shareholders, we glimpse something less heralded but equally powerful: Jobs the master tactician.
Yet Jobs’ brilliance wasn’t just in securing bigger profit shares: it was in knowing where not to play. Even as Pixar found early success in interactive CD-ROMs, he was quick to exit when the broader market failed to keep up, choosing instead to re-channel top talent into feature film animation. This type of discipline and focus runs throughout the letter, showing a founder less enamored with chasing fads and more committed to building a generational brand. Jobs makes it clear that Pixar’s success lives (and dies) on its ability to marry creative storytelling with cutting-edge tech, unveiling a strategic roadmap to bet on themselves, but not so boldly as to ignore the advantages of a powerhouse partner. It’s a masterclass in both self-confidence and prudence, a glimpse into Jobs’ brain as he elevates Pixar from just another studio into the “next great animation company” with a brand all its own.
Fun Fact: Steve Jobs never wrote a shareholder letter for Apple after returning as interim CEO in 1997. He did, however, write them earlier in his career. You can read Kevin’s notes on Steve’s first Apple shareholder in 1981 here.
1996 was Pixar's first full year as a public company, and for our annual report I've decided to write you a long letter, fully aware of Pascal's dictum that people write long letters when they don't have time to write short ones. I've got the time (Pixar is the focus of all my attention these days), but there also happens to be a great deal I want to tell you about our company: the great year we had in 1996, the landmark deal we were secretly negotiating with Disney throughout last year, the exciting productions now under way at Pixar, and the progress we're making in building a world-class animation studio.
We have also embarked on a new strategic course for Pixar which will carry us through our next decade. There are only a few times in the lives of most companies when events converge to create such enormous promise. This is such a time for Pixar.
We also took stock of our uniqueness. There are at least six studios capable of marketing and distributing major motion pictures (Disney, Warner, Paramount, Fox, Sony and Universal). But there are only two studios who have ever created blockbuster feature animated films (Disney and Pixar). And there is only one studio that has created a fully computer animated feature film (Pixar). Diverting our management attention away from doing what only Pixar can do in order to become beginners at marketing and distribution seemed like a bad idea to us. Nor did we want our culture to change. Pixar is a unique blend of animators, visual artists, story artists, scientists, engineers and production managers. Distribution involves different skills, and we were concerned that adding them to our cultural mix at this time would be disruptive. Creating is different than selling.
I know the lack of traditional incremental growth from quarter to quarter, or even year to year, must drive some of our investors crazy. But our life is measured in pictures, not quarters, and we firmly believe we are creating long term shareholder value as we build our studio into a unique and valuable entertainment asset.
As we look to the future, there is a sense of great purpose and creative excitement at our studio. Our vision is clear: to build the second great animation studio by leveraging our unique position in the new medium of computer animation. Our challenge is well defined: to create and produce five great films over the next ten years. We have all the ingredients in place to do this. If we can, the artistic and financial rewards will be ample, because there is no asset or legacy more valuable than one which renews itself with each generation.
Larry Page and Sergey Brin’s 2004 Google IPO Prospectus Letter
Jeff Bezos’s famous 1997 “Day 1” shareholder letter often steals the limelight (see below), but we think Larry Page’s 2004 IPO letter for Google deserves just as much acclaim. In it, Page lays out Google’s long-term focus, willingness to place high-risk bets, and unapologetic commitment to doing what’s right for users, even if it creates “lumpy” quarterly results. Much like Buffett or Bezos, Page disavows the pressures of short-term thinking, making it clear that Google would rather forego predictability than compromise on big-picture opportunities. This letter also highlights the quirky yet admirably bold culture of Google, where 20% time and a triumvirate leadership style encourage employees to experiment and executives to make decisions swiftly.
Larry and Sergey’s candor is especially evident in his discussion of Google’s dual-class share structure, which keeps control in the founders’ hands. They are explicit that this setup serves a single purpose: to insulate Google’s core principles (like its “don’t be evil” mantra) from short-term pressures. They acknowledge that not everyone will agree with this approach, but underscore that Google’s mission to prioritize users and invest in high-risk, high-reward projects often conflicts with traditional market expectations. Far from apologetic, Larry and Sergey makes it clear that shareholders need to be on board with this philosophy if they want a stake in Google’s future.
Fun Fact: The title of their shareholder letter is: “An Owner’s Manual” for Google’s Shareholders. This is an homage to Warren Buffett—and the Google founders explicitly stated so, footnoting the title with: “Much of this was inspired by Warren Buffett’s essays in his annual reports and his “An Owner’s Manual” to Berkshire Hathaway shareholders.”
As a private company, we have concentrated on the long term, and this has served us well. As a public company, we will do the same. In our opinion, outside pressures too often tempt companies to sacrifice long term opportunities to meet quarterly market expectations. Sometimes this pressure has caused companies to manipulate financial results in order to “make their quarter.” In Warren Buffett’s words, “We won’t ‘smooth’ quarterly or annual results: If earnings figures are lumpy when they reach headquarters, they will be lumpy when they reach you.
Our long term focus does have risks. Markets may have trouble evaluating long term value, thus potentially reducing the value of our company. Our long term focus may simply be the wrong business strategy. Competitors may be rewarded for short term tactics and grow stronger as a result. As potential investors, you should consider the risks around our long term focus.
We will not shy away from high-risk, high-reward projects because of short term earnings pressure. Some of our past bets have gone extraordinarily well, and others have not. Because we recognize the pursuit of such projects as the key to our long term success, we will continue to seek them out. For example, we would fund projects that have a 10% chance of earning a billion dollars over the long term. Do not be surprised if we place smaller bets in areas that seem very speculative or even strange when compared to our current businesses. Although we cannot quantify the specific level of risk we will undertake, as the ratio of reward to risk increases, we will accept projects further outside our current businesses, especially when the initial investment is small relative to the level of investment in our current businesses.
To facilitate timely decisions, Eric, Sergey and I meet daily to update each other on the business and to focus our collaborative thinking on the most important and immediate issues. Decisions are often made by one of us, with the others being briefed later. This works because we have tremendous trust and respect for each other and we generally think alike. Because of our intense long term working relationship, we can often predict differences of opinion among the three of us. We know that when we disagree, the correct decision is far from obvious.
Google is not a conventional company. Eric, Sergey and I intend to operate Google differently, applying the values it has developed as a private company to its future as a public company. Our mission and business description are available in the rest of this prospectus; we encourage you to carefully read this information. We will optimize for the long term rather than trying to produce smooth earnings for each quarter. We will support selected high-risk, high-reward projects and manage our portfolio of projects. We will run the company collaboratively with Eric, our CEO, as a team of three. We are conscious of our duty as fiduciaries for our shareholders, and we will fulfill those responsibilities. We will continue to strive to attract creative, committed new employees, and we will welcome support from new shareholders. We will live up to our “don’t be evil” principle by keeping user trust and not accepting payment for search results. We have a dual class structure that is biased toward stability and independence and that requires investors to bet on the team, especially Sergey and me.
Jeff Bezos’ 1997 Amazon Annual Report Shareholder Letter
Long before Amazon became a household name and Jeff Bezos became (one of) the wealthiest people on the planet, there was a singular document that audaciously outlined how it all might happen. In this shareholder letter—arguably one of the most remarkable business blueprints ever shared—Bezos declares that Amazon’s focus is on future free cash flows rather than accounting profits, even if it defies Wall Street’s short-term expectations. He sets the tone for a “Day 1” mentality: an enduring startup mindset that embraces bold bets and controversial, judgment-based decisions that might spook the risk-averse but are critical for long-term innovation. Bezos has steadfastly acted on them, illustrating how unwavering commitment to low prices and customer obsession sparks a virtuous cycle, driving scale, efficiency, and ultimately immense cash flow.
One of our favorite highlights of this letter is Bezos’s homages to the insights of Henry Mintzberg’s 1976 paper, “The Structure of ‘Unstructured’ Decision Processes,” underscoring that too much reliance on easily measurable, math-based decisions can lead an organization to do the wrong things more efficiently. Truly groundbreaking innovation often resides in the gray area of judgment, where controversy and uncertainty loom, which is exactly where Amazon has built its enduring empire. It’s a principle Warren Buffett might call “being approximately right rather than precisely wrong,” and it’s why Amazon’s data obsession is tempered by a recognition that historical metrics can’t fully capture future opportunities. The result is a relentless march forward, unwavering customer focus, and a willingness to trade short-term GAAP earnings for the promise of ever-greater long-term returns. It’s still “Day 1” at Amazon.
But this is Day 1 for the Internet and, if we execute well, for Amazon.com. Today, online commerce saves customers money and precious time. Tomorrow, through personalization, online commerce will accelerate the very process of discovery. Amazon.com uses the Internet to create real value for its customers and, by doing so, hopes to create an enduring franchise, even in established and large markets.
We believe that a fundamental measure of our success will be the shareholder value we create over the long term. This value will be a direct result of our ability to extend and solidify our current market leadership position. The stronger our market leadership, the more powerful our economic model. Market leadership can translate directly to higher revenue, higher profitability, greater capital velocity, and correspondingly stronger returns on invested capital.
Our decisions have consistently reflected this focus. We first measure ourselves in terms of the metrics most indicative of our market leadership: customer and revenue growth, the degree to which our customers continue to purchase from us on a repeat basis, and the strength of our brand. We have invested and will continue to invest aggressively to expand and leverage our customer base, brand, and infrastructure as we move to establish an enduring franchise.
We will continue to focus relentlessly on our customers.
When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we’ll take the cash flows.
Jamie Dimon’s 2000 Bank One Annual Report Shareholder Letter
It almost feels like Jamie Dimon was born into the role of CEO at JPMorgan Chase, as if John Pierpont Morgan himself had chosen him to carry on the legacy. While he actually joined the bank through a merger, Dimon has indeed spent the better part of his career shaping not just America’s largest bank but also the global conversation on financial leadership. In his letters to shareholders, Dimon emphasizes an unflinching commitment to high standards, openly admitting that striving to be the best often means coming up short. Dimon’s famous call to build a “fortress balance sheet” exemplifies his philosophy of robustness and preparedness, conjuring images of an impregnable stronghold in a world where financial storms are inevitable.
Beyond the fortress metaphor, what sets Dimon apart is his almost tech-founder-like focus on product innovation and customer experience. It’s rare to see a big-bank CEO talk about delighting customers with great products, but that features prominently in his letter. He also tackles the perennial debate of cutting costs vs. investing for growth, pointing out that no company can sustain itself on cuts alone. Warren Buffett and Charlie Munger might note that avoiding bad mistakes is a big part of success, but Dimon’s letters remind us that “subtracting failure” is not the same thing as “creating excellence.” Ultimately, he places the onus on leadership to set the right incentives from the top down: tying compensation to performance and ensuring that when the company falters, top executives share in the sacrifice.
Fun Fact: Warren Buffett reportedly called this letter “just about the best I’ve ever witnessed.” After reading Jamie’s letters, Warren sought him out, and the two men became friends. In later years, the two would frequently recommend reading the other’s letters.
It’s up to each company, each leadership team and each individual to set their own standards of performance. Ours will be the highest. We will not shy away from comparing ourselves to the best companies, knowing that often we’ll come up short. Striving to be the best motivates us to seek constant improvement.
Maintaining the highest standards of integrity involves faith fully meeting our commitments to our customers, to fellow employees, to the Board, to you our shareholders and to all of our other partners. Every commitment we make should, and will, be sacrosanct.
Our obligation is to build the company so it can thrive in any environment. The best companies capitalize on their strength to grow aggressively in downturns, when their competition is unable to do so.
As important as strategy is, we need to improve our execution, because without it, we will surely fail. Execution involves every employee, every phone call and every contact we have with customers. It is the devil in the details. We’ve got to execute or we will fail. And we will execute.
Eventually, it all comes down to our people. Building a great team and developing deep “bench strength” are requisites for any company’s long-term performance.
Steven Rales’ 1984 Danaher Annual Report Shareholder Letter
Danaher’s rise is a masterclass in patient reinvention. While the headlines typically focus on its outsized returns—trumping both the S&P 500 and even Berkshire Hathaway over its existence—there’s something even more compelling about Danaher’s story: its metamorphosis morphed from a classic industrial conglomerate into today’s life sciences juggernaut. This evolution has also been accompanied by four smooth CEO transitions, each one preserving the company’s core ethos while boldly reshaping the portfolio. Such flexible adaptability, wrapped in consistent discipline and values, is a rarity in the business world.
Equally notable is the Rales brothers’ acquisition blueprint, which blends a Buffett-like emphasis on understandable, cash-flow-rich businesses with a healthy dose of entrepreneurial drive. Early additions like Mohawk Rubber and Master Shield highlight a keen eye for recession-resistant niches, while Danaher’s leadership has intentionally avoided bureaucracy and centralized meddling, empowering the folks running each subsidiary to thrive. The company’s confidence in shareholder democracy and its insistence that managers truly understand how earnings are made, both exemplify Danaher’s pragmatic, no-nonsense culture. Rales’ letter is a quick overview of the core Danaher strategic pillars from the very beginning and illuminates how they’ve powered Danaher’s evolution from industrial mainstay to innovative science powerhouse.
Mohawk’s appeal to its many suitor emanates from its strong position as a manufacturer of replacement tires for passenger cars and a fabricator of other industrial products. The company has developed and maintained a consistency that is a product of its complementary lines of business. As growth in the economy slows, replacement tire sales tend to accelerate, given the desire of many consumers to replace parts on existing vehicles rather than incur debt to purchase new ones.
In addition, Master Shield benefits from an often misunderstood aspect of the building products industry. A substantial portion of siding industry sales are absorbed not by the new construction market, but by the remodeling trade. Although the new construction market relies more upon siding than ever before, this phenomenon has simply increased the size of the market rather than diminished the share maintained by the remodeling sector. Thus, when the economy contracts, and rising interest rates create a decline in new home sales, consumer spending is funneled toward maintenance and repair. With Master Shield’s marketing oriented toward the remodeling trade, Nick has always said that the company can be particularly competitive during those times of consumer thriftiness.
In the first instance, if the business is not simple, then we won’t understand it. What we don’t understand we can’t manage, and something that’s unmanageable isn’t going to benefit shareholders.
We also like predictable earnings in the form of cash. If the earnings have been consistent, then it’s likely that management knows how those earnings were created. Particularly important, however, is that the profits be cash profits. When profits are in some other form, funny things can happen, most of which are not good. In addition, since Danaher is relatively leveraged, cash is a very valuable commodity.
Niche is a useful term because it implies selectivity. A conscious selection is important in any business strategy because without it there exists no blueprint. The first question one often asks in analyzing any business is: who will our customers be five years from now? Since every technology has a life cycle and markets change, having no plan means any road can take you there. Most companies do something better than their competitors and when they discover that skill and learn to exploit it, their chances of longer term success increase accordingly.
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Wrap-up
If you’ve got any thoughts, questions, or feedback, please drop either of us a line — we’d love to chat! You can find us on Twitter at @kevg1412 and @nicholasachow, Kevin’s email at kevin@12mv2.com, or Nick’s LinkedIn here.
If you're a fan of business or technology in general, please check out some of our other projects!
Speedwell Research — Comprehensive research on great public companies including Constellation Software, Floor & Decor, Meta (Facebook) and interesting new frameworks like the Consumer’s Hierarchy of Preferences.
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