Amazon had to pass these four tests by Jeff Bezos before launching its first physical bookstore

It's still not entirely clear what made Amazon suddenly want to open its first physical bookstore last year, but an old shareholder letter by its CEO Jeff Bezos gives some hints.

In Amazon's shareholder letter written in 2007, Bezos explains he never approves a new business idea, like opening a physical store, unless it passes the following four tests:

1. We must convince ourselves that the new opportunity can generate the returns on capital our investors expected when they invested in Amazon
2. And we must convince ourselves that the new business can grow to a scale where it can be significant in the context of our overall company.
3. Furthermore, we must believe that the opportunity is currently underserved
4. ...and that we have the capabilities needed to bring strong customer-facing differentiation to the marketplace

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