In many interviews, Jeff Bezos said that from childhood he was a “garage inventor”: he made automatic gates from cement-filled tires, a solar oven from foil and an umbrella, and an alarm from a rattling baking sheet. He says that ingenuity was passed on from his maternal grandfather, who developed space and rocket technologies in the DARPA military program. After retirement, his grandfather moved to a ranch in Texas, where Bezos spent the summer every year from 4 to 16 years old. The farm was located in such a wilderness that it was easier to learn how to make all the necessary items with your own hands than to call specialists or go to the city. So, the grandfather darned cattle wounds with his own hands with needles, which he made himself, or, for example, he and his grandson assembled a crane from improvised means to move Caterpillar parts. From childhood, Jeff absorbed the thesis thatthat the main thing is to believe in yourself, to be resourceful and flexible, as he told TechCrunch.
The future multibillionaire made his first attempt to put together his own business in high school. After briefly frying potatoes at McDonald's, he opened the Dream Institute, a literary education camp for teens. They managed to recruit six paid students, two of whom were Jeff's brother and sister.
From a hedge fund to a bookseller
After school, Bezos entered Princeton, but not to the department of theoretical physics, as he wanted, but to the department of computer science and electrical measuring instruments. In other words, fate itself put the future father of e-commerce at the computer.
Jeff shrugged off vacancies at Intel, Bell Labs and Andersen Consulting, almost started his own startup with fax newsletter for a subscription, but gave up and asked a headhunter friend to find a job at a technology company. So the creator of Amazon was interviewed on Wall Street at DE Shaw, a young hedge fund that actively used computer technology. They immediately found a common language with the founder of the foundation, David Shaw, and Bezos worked at DE Shaw for four years.
By 1994, 30-year-old Bezos was earning a six-figure salary as senior vice president of the company, but it didn't warm him up. Jeff has rekindled startup dreams. “I imagined myself 50 years later and wondered if I was 80 years old and I would regret leaving my job? I decided that I wouldn't even remember that. I was very afraid to regret not taking the risk. The worst thing is not to risk it. If I took the risk and went bankrupt, I wouldn’t regret one hundred percent,”Jeff poured out his heart in an interview with CNBC. In a short survey, Jeff found that online commerce was growing 2300% a year in the mid-nineties. Even the most ambitious Wall Street financier couldn't help but bow to the potential of the Internet.
Jeff Bezos has compiled a list of 20 products that could be the best selling online. Soft, CDs and books were shortlisted. Bookworm and former dean of the literary camp Bezos immediately chose the latter, quit the hedge fund and, taking his wife Mackenzie and the dog Kamala, rushed to Seattle.
On July 5, 1994, Bezos registered the company Cadabra, Inc., but a lawyer he knew suggested that the word was heard as "cadaver", that is, "corpse." Jeff scoured the dictionary for more euphonious words and settled on Amazon (since the ambitious startup dreamed of putting together the largest online book reselling, the name of the deepest river just came up). Subsequently, Jeff has repeatedly noted: “The brand name is very important. Especially if your business is online and not in the physical world."
© Global Look Press
Back to the garage, and then to the millionaires
The first year Bezos and his wife and a couple of employees worked in the garage of a rented house. There, in addition to the startup, the corporate traditions of Amazon originated: Friday parties and pine doors instead of countertops (Jeff cut tables for the garage office from boards).
In July 1995, the world (more precisely, its part with Internet access) saw Amazon.com. Less than a month later, weekly earnings reached $ 10 thousand. During the first week of September, startups sold books worth $ 20 thousand, buyers appeared in all states of the United States and abroad. The founding father noted the quick success by expanding the range of products: he added music discs and vinyl, keeping the same principle as with books - the choice is wider than in offline stores, and the price tag is more pleasant.
Then he sent out an email to 1,000 randomly selected customers asking what other product they would buy on Amazon. Feedbacks were full of variety. “So I decided to expand across all categories. I started with electronics, continued with clothes - and off we go,”Bezos told CNBC. The total sales for the first year of the platform's operation amounted to $ 15.7 million, and the company's staff expanded to 100 employees by the fall of 1996. Amazon went public on May 15, 1997, listing its shares on the NASDAQ at $ 18. On the first day, the company managed to raise $ 54 million with a capitalization of $ 438 million.
© Global Look Press
The sharp jump of a newcomer to the market has put competitors into a stupor. In the same year, the largest American bookselling company Barnes & Noble launched its own online platform, and with it an aggressive PR campaign claiming that they had more books than Amazon.com. In parallel, Barnes & Noble filed a lawsuit against Amazon, claiming that the advertising slogan "Largest bookstore on earth" is misleading, since "this is not a bookstore at all, this is a book broker."
But Amazon's father was already confidently on his feet and did not pay attention to the attack of competitors. In addition, Bezos became boring with the label of "the largest bookstore", and from filling online shelves with all sorts of things, he moved towards active cooperation with other e-commerce sites. In February 1999, Amazon bought 40% of the newly launched online pharmacy Drugstore.com, which was an important strategic step - the online drug market at that time was estimated at $ 150 billion. That summer, riding the wave of online auctions raised by eBay, Jeff hit hands with Sotheby's and launched the sothebys.amazon.com service. And later, the Shop the Web program, thanks to which the company received a commission for redirecting its customers to other online stores with a non-competitive assortment.
The developers also actively improved the purchase process on the company's website. Amazon was the first to introduce a one-click ordering system (having patented the development, it subsequently sued competitors who used it) and a free shipping program for orders over $ 99. New opportunities of the site supported its popularity and guaranteed customer loyalty.
In 1999, Amazon sales reached $ 610 million, and the staff grew to 3 thousand people. At the same time, the company accounted for 85% of the online book market, while the closest competitor - Barnes & Noble - was content with only 11%. That year, Amazon stock rose 40 times since its IPO, and Bezos' personal fortune surpassed $ 10 billion for the first time.
Despite the fact that Amazon became one of the main e-commerce sites, its profit was close to zero. But the founding father did not panic: according to his calculations, the company should not have made a profit for the first four to five years. The revenue was burned by a continuous increase in turnover. "This is a long-distance race," Bezos argued in 1997 (and also captioned the first open letter to employees).
The company received its first profit exactly on schedule: five years after launch, in 2001. In those three months, with more than $ 1 billion in revenue, Amazon earned $ 5 million. Jeff's risky business strategy worked.
© Global Look Press
Anything you want - by subscription
In February 2005, the giant Amazon added Amazon Prime. Initially, subscribers received a free two-day delivery of any Amazon orders within the United States for an annual payment of $ 79 (now $ 99). The global expansion began in 2007, and now the subscription is available in 18 countries. As of January 2020, Amazon Prime had 150 million subscribers.
In September 2006, Amazon launched Unbox, a service that lets you download DVD-quality movies and TV shows. With the development of the company's infrastructure in the United States and around the world, it turned into a streaming service and became known as Prime Video. In 2010, the company set up its own television production division, Amazon Studios, which makes TV series and films.
In 2015, it became possible to watch third-party TV channels through the service (today there are more than 150 of them), and in 2017 Amazon Studios received the rights to a television adaptation of The Lord of the Rings for $ 250 million. Today, in the rapidly growing league of streaming services, Amazon holds the second place in the US market with a 22% share (Netflix is in first place with a 31% share).
In September 2007, Amazon added Amazon Music, which, according to Counterpoint Research's estimates, gained momentum in 2020. The number of subscribers increased by 104% compared to 2019, and the share of revenue was 12%: Amazon even surpassed YouTube Music, which received 9%.
In addition to the above, Amazon's octopus launched tentacles into the smartphone market: in 2014, the disastrous Fire Phone and the quite successful Fire TV set-top box and the Echo smart speaker came out. Three years later, Amazon infiltrated the food industry: Bezos bought organic supermarket chain Whole Foods for $ 13.4 billion.
This variety comes at a cost. Amazon's annual revenue in the 27th year of the corporation's existence grew by 30% and amounted to $ 386.1 billion. And Jeff Bezos himself, who broke up with his wife in 2019 and unfastened her 4% of Amazon shares ($ 38.3 billion), in the past year, he earned $ 6.4 billion per day at the height of the pandemic, and already in May, Comparisum analysts predicted the fate of the first trillionaire on Earth by 2026. Most likely, the new position (Jeff will move into the chair of the executive chairman of the board) will not force him to be out of schedule.
The Life of the Richest Man in History: Jeff Bezos and His Habits.