Most kids who have a passion for computers look up to young IT geniuses who have made it big in the tech industry. Many young millionaires in the tech and business worlds are famous today, and Jeff Bezos is the wealthiest of them all. Every successful person’s story is full of insight and lessons that the youth can learn from.
A hugely successful e-commerce pioneer, Jeff Bezos founded the largest online retailer in the world, Amazon.com. He is also the owner of The Washington Post and an aerospace manufacturing company called Blue Origin. Considering the massive success of Amazon, it won’t be wrong to call Jeff Bezos the reigning king of e-commerce. According to Forbes and Bloomberg, he is the richest man globally with a net worth of $190 billion as of June 2021.
This article explores the intriguing journey of Bezos and how Amazon.com grew from a humble garage-grown startup to a multi-million dollar enterprise.
Most kids who have a passion for computers look up to young IT geniuses who have made it big in the tech industry. Many young millionaires in the tech and business worlds are famous today, and Jeff Bezos is the wealthiest of them all.
Every successful person’s story is full of insight and lessons that the youth can learn from. A hugely successful e-commerce pioneer, Jeff Bezos founded the largest online retailer in the world, Amazon.com. He is also the owner of The Washington Post and an aerospace manufacturing company called Blue Origin.
Considering the massive success of Amazon, it won’t be wrong to call Jeff Bezos the reigning king of e-commerce. According to Forbes and Bloomberg, he is the richest man globally with a net worth of $190 billion as of June 2021.This article explores the intriguing journey of Bezos and how Amazon.com grew from a humble garage-grown startup to a multi-million dollar enterprise.
Bezos was born on 12th January 1964, in New Mexico, to Jacklyn Gise Jorgensen and Ted Jorgensen. The Jorgensens divorced soon after, and in 1968, Bezo’s mother married Miguel Mike Bezos, a Cuban immigrant. Miguel graduated from the University of New Mexico, and soon the family shifted to Houston, Texas, where Miguel got an engineering job at Exxon. The maternal grandfather of Bezos served as a regional director of the U.S. Atomic Energy Commission (AEC) in Albuquerque. When he was a child, Bezos used to spend summer vacations at a family country home estate near Cotulla, Texas, where his maternal grandfather lived after retirement. Later on, Bezos bought the land in his adult life and expanded it from 20,000 acres to 300,000 acres.Even as a child, Bezos was curious about how things work. In one of his early inventions, He created an alarm that would alert him whenever his younger siblings would try to enter his room. He recreated small electronic devices and amateur robots. By the time he was in high school, Bezos had turned his parents’ garage into a laboratory to work on his experiments. Interestingly, many years later, in 1994, Bezos would start amazon.com, too, working from his garage.
After a few years, the family relocated to Miami, where Bezos went to high school. Bezos was a bright student who graduated as a valedictorian. Having a business understanding from a young age, it was around this time, Bezos began his first business called The Dream Institute.The institute offered a creative summer camp for students of fourth, fifth, and sixth grades.He studied at the distinguished Princeton University and graduated summa cum laude in 1986 with computer science and electrical engineering. When he first entered Princeton, Bezos wanted to become a theoretical physicist, inspired by the likes of Einstein and Hawking.However, he soon discovered that despite being among the top 25 students in the physics program, he could not compete with some of the geniuses in his batch. In an interview with wired.com, he recalled that it became clear to him that a few other students in his batch were naturally better at the subject as if their brains were wired differently. Soon Bezos changed his major to his childhood passion, computer science. He also set a goal for himself that one day he would start and run his own business.
Lessons to learn from Jeff Bezos early years
• Entrepreneurial skills- Jeff Bezos displayed entrepreneurial skills from a young age. He started a progressive tutoring business in his high school. He would help around his grandfather with all the operations of maintaining a ranch. He played with electronic kits as a kid and built amateur robots that soon took up a lot of space in his father’s garage, where he set up his little lab for electronics experiments. At the young age of 18, he dreamt of humans exploring other planets, a dream he has already begun working on.
• The space to work on his interests – Jeff was encouraged for all his unusual pursuits by his parents and maternal grandfather, who appreciated his thirst for innovation and gave him the space to work on his passions from a young age.
At the time of graduation, computer science was in demand on Wallstreet, where it was being used to explore market trends. After graduating, Jeff Bezos found a job at Fitel, a startup telecommunications company where Bezos’s job was to build a network for conducting international trade. Soon he climbed up the ranks and became the director of customer services and head of development. When the company failed to take off after two years, Bezos ventured into banking and began working at Bankers Trust, where he rose to vice president.
Despite having a lucrative job, Bezos decided to leave the bank to join a tech company where he could work on computers, his one true passion. Bezos joined D. E. Shaw, an unusual Wall Street financial firm working on the intersection of investment and cutting-edge technology development. During this time, Jeff started dating his future wife, MacKenzie Tuttle, also a Princeton graduate. They were married in 1993. Bezos loved the unique culture at D.E. Shaw, where mathematicians and computer scientists were hired more than financiers. Bezos’s career flourished at Shaw, and he soon became a senior vice president. He had secured a bright future in finance and worked in an environment that was fit for his nature. Soon, Bezos had an idea that changed his life — and the history of e-commerce.
Risk-taking abilities of Bezos and a thirst for innovation
When Bezos had graduated, he was offered lucrative jobs at established firms like Intel, Bell Labs, and Andersen Consulting. However, instead of choosing big firms, he decided to work at an innovative startup and gave it his best effort. Later in his career, he again gave up an excellent position at a bank to work at an experimental and unusual financial firm D.E. Shaw. A firm that sparked his curiosity and allowed him to work on computers. Bezos never settled for a boring job. He may have kept a well-paying job for a few years since money is essential for survival. However, he always chose firms that allowed him to innovate and grow in the field of technology. When the idea of Amazon emerged, he ditched a secure position as vice president to work on the idea that would transform his life.Amazon was started as an online bookstore, but Bezos kept expanding until it became a store for everything.
Amazon Prime was also a breakthrough idea that enabled the products to be delivered for free within 2-days (with an Amazon Prime subscription).The Kindle e-reader and the Kindle publishing platform (that made anyone an author) were also timely innovations that cashed the growing market of e-books when there wasn’t much competition.It was a thirst for innovation that made Bezos keep pushing forward in the realm of technology. He kept incorporating new technologies in his business to make the Amazon platform more and more customer-centered and user-friendly. He never compromised on the product quality, and also, when it came to hiring, he was very picky. He hired intellectuals who had a track record of innovation.
The regret-minimization framework
Bezos is known for his “regret-minimization framework,” which helped him progress in his career. He mentioned to a biographer that he likes to make decisions based on which decision he will regret less when he is 80. He thought to himself that at the age of 80, he wouldn’t regret that he let go of a well-paying job and his wall street bonus. However, he knew that he would sincerely regret not investing in the Internet that he knew could have a much more significant impact on his life and the world. Weighing the two decisions made it easy for him to resign from his job and start working on Amazon.
How was Amazon founded?
Initially, Amazon was just an exciting idea floating through the offices of D. E. Shaw & Co.Shaw introduced the use of computers and mathematical formulas to exploit anomalies in the global stock markets. As a senior vice president, Bezos was required to explore the internet for business opportunities.In 1994, the World Wide Web was still new, and e-commerce had not been developed. One day, Bezos came across specific statistics that indicated that Internet usage was increasing by 2,300 percent each year. Bezos saw the untapped potential of e-commerce and immediately began exploring the possibilities of setting up a retail shopping website. He looked at the top 20 mail order businesses and reviewed which product could be sold more and delivered more efficiently on an online platform rather than by a physical store. Books seemed to be the perfect candidate for the Internet since a vast, limitless database of books could be displayed on a website, which was not possible in the limited confines of a bookstore.
Being a fast-acting individual, Bezos traveled to Los Angeles soon after resigning from his job and attended the American Booksellers’ Convention to learn about the book business. The inventory of major book wholesalers had already been compiled in the form of electronic lists.Bezos decided to create a single location on the Internet, where the book buyers could easily search the available stock of books and shop for books online. Bezos left a lucrative and secure job at D.E. Shaw to seize the opportunity and start working on a business idea. During a cross-country drive from New York City to Seatle, Bezos wrote the business plan for Amazon, which was launched in his garage on 5th July 1994.A year later, Amazon was opened to the world. Bezos friends and amazon’s 300 beta testers were asked to spread the word.
Without any press, within 30 days, Amazon had managed to sell books not only in all of the 50 states but also in 45 other countries. Later in the same year, Amazon had scored sales of $20,000 a week. Bezos and his team kept working on the website and introduced unique features of one-click shopping, customer reviews, and e-mail order verification.Bezos invested his savings in the company and warned most investors that there was a 70% chance that Amazon would not flourish. Soon his parents invested an estimated $300,000 in Amazon. “We weren’t betting on the Internet,” his mother said. “We were betting on Jeff.” Within the next few years, Bezos parents, being six percent owners of Amazon, became billionaires. After Three years, Bezos took Amazon public with an initial public offering (IPO). Reports by Fortune and Barron were critical of Amazon. Still, Bezos was confident that the power of the Internet would defeat the larger book retailers such as Borders and Barnes & Noble.
Originally just an online bookstore, later, Amazon was expanded to selling all kinds of products. In 1998, Amazon was expanded to include the sale of music and video, and by the end of the year, a variety of different consumer goods were available on the website. $54 million was raised during the 1997 equity offering, which Bezos used aggressively to acquire smaller competitors. In 2002, Bezos and his team launched Amazon Web Services, a cloud computing platform. Today Amazon Web Services (AWS) is an essential profit driver for Amazon, having crossed $10 billion in revenue in the first quarter of 2020.Within the first five years of Amazon, customer accounts multiplied from 180,000 to 17 million. Sales saw an exponential increase from $511,000 to more than $1.6bn. Near the end of 2002, Amazon suffered a financial crisis when revenues stagnated. The company was almost bankrupt when Bezos closed some distribution centers and reduced the Amazon workforce by 14%. Within a year, Amazon recovered from financial instability and earned $400 million in profit. By October 2013, Amazon had gained the title of the largest online shopping retailer in the world.
From the beginning, Bezos tried to increase market share as fast as possible, even if that meant lower profits. When he announced that he didn’t just aim for Amazon to be the biggest bookstore on earth but that he intended it to become the biggest store for any product in the world, many criticized Amazon for aiming too high, while others praised it for being the most innovative business strategy ever. Jeff Bezos kept expanding Amazon while enforcing six of his main principles; customer obsession, frugality, innovation, ownership, high hiring bar, and a bias for action. The clothing category was added to Amazon when it partnered with hundreds of brands and retailers, including Nordstrom and The Gap. Bezos has explained in an interview that Amazon’s vision is to become the most customer-centric company in the world.He aims to make Amazon an online store where people can buy anything they want.Starting from an online book store, Today, Amazon is the biggest online retail store with products of all kinds.
2005 – Amazon launches Prime membership
The Amazon Marketplace was created in 2000 – which allowed small businesses to sell on Amazon’s platform. This increased the need for an improved delivery service that customers could rely on. In 2005, Amazon Prime was launched, which offered quicker shipping for selected products. The fast delivery feature greatly boosted sales as it allowed the product to be delivered in minimum time. Today, more than 100 million customers are paying members of Amazon Prime, a subscription service that includes a video and music streaming application that competes with the likes of Netflix.Amazon Prime ranks at the 2nd position as the largest paid membership program in the world.
Other business ventures
• Kindle : Despite expanding and diversifying, Bezos did not forget the bookselling origins of Amazon. He kept an eye on trends and saw ebooks becoming popular. Mr. Bezos saw the potential and launched the Kindle in 2007, becoming a global leader in the e-book retail sector.The Amazon Kindle device enabled readers to browse a wide selection of E-books. E-books could be bought online, downloaded on the Kindle device, allowing users to read e-books on the go. Other digital media, including newspapers and magazines, were also added to the Kindle Store. Bezos kept improving the software and hardware of Kindle to beat competitors such as Apple’s Ipad.
• The Washington Post : Bezos acquired the Washington Post in 2013 when it was struggling from a financial crisis. Under the leadership of Bezos, the paper managed to double its web traffic and became profitable within three years. In September 2017, it was announced that The Washington post had crossed the 1 million mark for paid online subscribers. Bezos had the vision to use internet marketing to target the global population of readers.
• Blue Origin : A star trek enthusiast, Bezos was always fascinated by spacecraft. The huge success of Amazon equipped Bezos with the resources to start his own space exploration company called Blue Origin.
Bezos has explained his desire to colonize the solar system by making other planets accessible. He sells US$1 billion in Amazon stock every year to invest in Blue Origin. Bezos has said that the main aim of Blue Origin is the preservation of the earth’s natural resources by making expanding the human species to other planets. He announced that New Shepard, Blue Origin’s spacecraft, would soon transport humans into space by November 2018. Blue Origin was to sell commercial spaceflight tickets from cost $200,000 to $300,000.In June 2021, Bezos announced he and his brother Mark will fly to space in New Shephard’s first crewed flight ever.
What is unique about Amazon
• A customer-centered business : At Amazon, there is a clear-cut focus on the customer, leading to excellence in customer service. This is reflected in the 2004 American Customer Satisfaction Index that gave Amazon.com a score of 88, which was the highest customer satisfaction score at the time for both online and offline service providers.In the Biography “the everything store,” Bezo’s has explained a few things that make Amazon different from other companies. Bezos says that Amazon is genuinely customer-centric, long-term oriented, and highly innovative. He claims that very few companies have all three of these features. Most companies focus on the competitor instead of the customer. Most entrepreneurs invest their time in businesses that yield profit within two or three years, and if that doesn’t happen, they give up. It seems safer to be a close follower of successful competitors rather than inventing something new. However, at Amazon, innovation is extremely important.
Amazon started with the idea of an online book retailer that expanded to become a global phenomenon, comprising home delivery, cloud computing, advanced artificial intelligence, and movie and sports streaming. The diversification and expansion of Amazon has not been without any obstacles. Bezos has faced much criticism, from being labeled as a cold and ferocious employer to complaints about working conditions in Amazon warehouses. Many analysts predicted the death of Amazon in the financial crisis of 2002 when it almost went bankrupt. Still, Bezos continued expanding his empire and maintained a long-term vision for his company. At the beginning of 2020, when a global pandemic threatened the world’s economy, quarantine meant an explosion in the demand for Amazon’s online services. Amazon’s stock price soared and reached new heights. Recently Jeff Bezos announced he would give up his role as CEO at Amazon in the summer of 2021. He will continue to work as an Executive Chairman of his global retail empire.