Jeff Bezos on Amazon

Amazon’s founder and boss, Jeff Bezos spoke in front of a US government hearing on an increasingly common topic: are the top tech companies in the US too big, monolpolistic, and thus bad for the custome r? Given that backdrop, it isn’t surprising that Bezos’ speech to the US government is filled with all the good Amazon brings to customers, its schemes for employees, and all the employment it creates. But dismiss all of that, and there’s still lots of interesting stuff left over in his speech.

 

Humility isn’t a Bezos characteristic, because he starts with:

“I founded Amazon 26 years ago with the long-term mission of making it Earth’s most customer-centric company.”

Unlike most of the huge tech companies that were founded by college dropouts (Bill Gates, Steve Jobs) or kids still at college (the Google guys), Bezos had a well-paying job when he decided to form an online bookstore on this thing called the “internet”:

“When I told my boss I was leaving, he took me on a long walk in Central Park. After a lot of listening, he finally said, “You know what, Jeff, I think this is a good idea, but it would be a better idea for somebody who didn’t already have a good job.”

 

Bezos took two days to consider his boss’ point (why risk everything you have?):

“It was a decision I made with my heart and not my head.”

And why did he make that decision? To avoid regret later in life:

“When I’m 80 and reflecting back, I want to have minimized the number of regrets that I have in my life. And most of our regrets are acts of omission—the things we didn’t try, the paths untraveled. Those are the things that haunt us. And I decided that if I didn’t at least give it my best shot, I was going to regret not trying to participate in this thing called the internet that I thought was going to be a big deal.”

 

Raising money for Amazon was anything but easy when he started off:

“It took more than 50 meetings for me to raise $1 million from investors, and over the course of all those meetings, the most common question was, “What’s the internet?”

While it is hard to imagine that today:

“Amazon’s success was anything but preordained. Investing in Amazon early on was a very risky proposition. From our founding through the end of 2001, our business had cumulative losses of nearly $3 billion.”

As it became more visible, the criticism was often scathing:

“Smart analysts predicted Barnes & Noble would steamroll us, and branded us “Amazon.toast.” In 1999, after we’d been in business for nearly five years, Barron’s headlined a story about our impending demise “Amazon.bomb.”

And when the Internet bubble burst, Amazon’s stock price crashed:

“At the pinnacle of the internet bubble our stock price peaked at $116, and then after the bubble burst our stock went down to $6.”

 

So how did Amazon rise and rise… and continue to rise?

“In addition to good luck and great people, we have been able to succeed as a company only because we have continued to take big risks… Outsized returns come from betting against conventional wisdom, but conventional wisdom is usually right.”

Like his cloud computing platform, AWS (Amazon Web Services):

“No one asked for AWS. It turned out the world was ready and hungry for cloud computing but didn’t know it yet. We were right about AWS, but the truth is we’ve also taken plenty of risks that didn’t pan out.”

Plus, that Day One mentality that Bezos loves to talk of:

“By that I mean approaching everything we do with the energy and entrepreneurial spirit of Day One.”

 

It’s hard to argue with Amazon having become “Earth’s most customer-centric company”. Bezos, being Bezos, doesn’t leave you to come to that conclusion. He points to a poll instead:

“Who do Americans trust more than Amazon “to do the right thing?” Only their primary physicians and the military, according to a January 2020 Morning Consult survey.”

Like I said, humility isn’t his forte. Then again, maybe he subscribes to that famous line by Muhammad Ali:

“It’s hard to be humble when you are as great as I am.”