What went behind the making of Amazon? How did a Startup selling Books become a $100Billion giant?
Jeff Bezos was working in Wall street at a hedge fund co. called D.E.Shaw in the early 1990s. He was working on building a network international trade and started looking at internet enabled business opportunities. During the early 1990s Internet usage grew multifold very quickly and that’s when Jeff envisioned a store to conduct commerce using the Internet.
Jeff selected Books category as there are millions of Books giving a large no of Products to start with. Jeff also has an individual liking towards Books, in a way Steve Job’s loved music and led to the creation of iPods.
Amazon was soon shipping hundreds to thousands of books every day and conducting commerce through the Internet. After a successful stint with Books, Amazon launched categories of Music & DVDs. Around that time, a new company was gaining a reputation as search engines and Jeff personally invested $250,000 after meeting its founders. The company, of course, is Google co-incidentally an Amazon rival decades later.
Amazon has been largely influenced by one individual and so many of its characteristics are largely based on Jeff’s decision and personality. Few examples of its Characteristics are:
- Customer Focus: Amazon has defined Customer satisfaction as a core Value. It has and continues to improve customer experience as the top most priority.
- Frugality: Amazon made its employees pay for parking and paid a salary at Industry standards, in spite of being a top Tech company and relentless working conditions.
This comes at a time when tech companies spend lavishly on Employees, luxurious offices and gave big perks like stock options, free food and other amenities. Also, Amazon kept on pressing suppliers for lower prices with its competitive advantage of Scale. These things helped immensely in provide or matching lowest prices for all the goods.
- Ownership, Action & high standards for Talent: Everyone in the company, including top management was constantly under pressure to perform. They had a saying at Amazon that ‘If you are not competent, Bezos will chew and spit you out. And if you are, then he’ll swallow you.’ His temper and famous tantrums also resulted in a lot of attrition at the top level, but that hardly seemed to affect Amazon.
By early 2000s Amazon had introduced more categories with Toys, Electronics and later also added Sports goods & Jewellery. They also started marketplace allowing sellers to directly sell on its platform, competing directly with eBay. Bezos had secretly also started a company devoted to space exploration called Blue Origins in 2000 after becoming one of the richest person during the dot-com boom phrase. It was 1st revealed to Media in 2003 and worked towards Jeff’s childhood dream of getting humans in space more safely and at lower costs.
Jeff always said and believed Amazon to be a technology company and not just an Online Commerce store. Amazon started enabling Suppliers with logistics & web set up to sell goods online. This laid the foundation for providing Web infrastructure called Amazon Web Services that now has high-profile clients like Netflix, Instagram, NASA etc
The dominance of Amazon:
By 2004, Amazon also started an experimental laboratory called ‘Lab 126’ with the goal to create a device that would enable Amazon to dominate the books industry the way iPod did for Apple. It resulted in the creation of Kindle by 2007 that provided instant gratification to readers. During this time, Amazon also started Amazon prime – a membership service that provided 2 day delivery for free. This had turned members into Amazon addicts who purchased everything from Amazon – courtesy the predictable and quick delivery.
Jeff Bezos not only the founder of Amazon but also a stakeholder in Twitter, Uber, The Business Insider and owner of Washington Post newspaper. He’s also the founder and now a stakeholder in Blue Origin – a space expedition company. All of this combined makes Jeff Bezos amongst the richest individuals on the planet.
All of the above and many more things go on in the making of the tech giant Amazon – that’s not just an Everything store but Everything company now. If you would like to read the book, check it out the everything store jeff Bezos and the age of amazon