Today marks Jeff Bezos’ final business day as Amazon.com Inc.’s chief executive officer. He is transitioning into the role of executive chairman on Monday — exactly 27 years after his company was incorporated.
As the world’s wealthiest person, Bezos’s every move is scrutinized. And it’s easy to overlook that in 1994, he was just another driven Wall Streeter with entrepreneurial dreams.
“Three years ago, I was in New York City working for a quantitative hedge fund,” Bezos said in one of his earliest interviews about Amazon— a viral video from 1997.
“I came across a startling statistic that web usage was growing at 2,300 per cent a year. So I decided I would try and find a business plan that made sense in the context of that growth. And I picked books as the first and best product to sell online.”
Of course, it’s one thing to identify a trend — it’s another to build a transformational business.
Naysayers on social media often note Bezos received startup capital from his parents, who were among Amazon’s earliest investors.
In reality, it’s a struggle to build any business, let alone one of the most successful companies in history, even if you’ve got a financially supportive family.
In fact, Bezos prepared his parents for a worst-case scenario.
“I told them it’s very likely they’ll lose their entire investment in the company,” Bezos said in an interview 21 years ago with Seattle television channel, KING-TV.
“I thought there was a 30 per cent chance that we might build a successful company.”
While Bezos was realistic about the odds for success, he never outwardly presented them as a problem, because he’s inherently a problem solver.
In 2001, he shared some advice for entrepreneurs in an online video about how startups should use what little money they have to eliminate risks to their business.
“Pick whatever you think the biggest problems are and you eliminate them one at a time.”
In Amazon’s earliest days, one of its biggest challenges was keeping up with demand.
“We had so many orders that we weren’t ready for,” he said during a speech to the American Academy of Achievement in 2001. “We had no real organization in our distribution centers.”
Bezos found himself on the floor with his fellow employees, packing up newly purchased items.
That hands-on learning helped cement Amazon’s focus on customers above everything else.
“It is probably one of the luckiest things that ever happened to us because it formed a culture of customer service,” Bezos said.
We saw that culture on full display during the pandemic, as Amazon’s army of 1.3 million employees went into overdrive to deliver packages around the world.
According to the research firm Kantar, Amazon — already the most valuable brand in the world — grew in brand value by a whopping 64 per cent in the past year.
For Bezos though, being on top has never been a reason to slowdown.
In Amazon’s earlier days, he feared the company’s biggest risk would be an internal one: after beating the odds as a startup, it could easily stumble if it failed to keep executing.
Hiring new managers who could build teams around that customer-first mentality was a must.
“I spend a third of the job interview asking questions designed to ascertain whether they can hire great people,” Bezos said during a speech at Lake Forest College in 1998.
It didn’t take long for Amazon to become a well-oiled machine.
Within five years of its founding, the company was generating more than one billion dollars in annual revenue. Even on an inflation-adjusted basis, you’d be hard-pressed to find companies that have ever scaled so quickly.
And still, Amazon is growing at a remarkable rate. Over the past two decades, 20 per cent annual revenue growth has come to represent a weak year.
Along with its e-commerce dominance, the company has added a fast-growing (and extremely profitable) cloud business, Amazon Web Services. The business has been so successful that Bezos tapped its long-time leader, Andy Jassy, to be Amazon’s next CEO.
Bezos has never shied away from bold acquisitions — Whole Foods Market Inc., Twitch and Metro Goldwyn Mayer to name a few.
None of these high priced deals provided Amazon with an immediate bottom line boost, which is often what companies hope to achieve in big transactions.
But they all played into Bezos’s business beliefs around customer obsession, the need to be inventive, and focusing on the long-term. Those are all philosophies he shared in a video for Zappos employees, when Amazon acquired the online footwear retailer in 2009.
With Bezos’s building blocks, Amazon is on pace to surpass Walmart Inc. as the world’s largest company by revenue within two years, according to analysts polled by Bloomberg.
Those same analysts expect Amazon’s annual revenue will top US$1 trillion by 2027.
Of course, not all CEOs — especially those at companies that are publicly traded — feel they can focus on growing revenue at the expense of profit margins (which, in Amazon’s case, were razor thin for many years).
But Bezos was rarely concerned with the stock market’s short-termism. He avoided the company’s quarterly earnings calls, instead focusing on Amazon investors who, like the Berkshire Hathaway Inc. faithful, were playing the patient game.
In each of Amazon’s annual reports, he would attach a copy of his original shareholder letter from 1997, which highlighted the company’s “Day 1” mentality of always staying relevant.
And for Bezos, you get the sense that even on his last day, it’s still Day 1.