"Godfather of e-commerce" Jeff Bezos and his Amazon empire

Jeff Bezos has always been the second richest man in the world in the past two years. His personal wealth has already surpassed that of Bill Gates, the co-founder of MicrosoftGates and legendary investor WarrenBuffett's accumulated wealth. As early as 2017-2021, he was the world's richest person for four consecutive years, with net assets surpassing Musk. According to the Bloomberg Billionaires Index, as of the time of writing, Bezos' net assets were $139 billion.

Now, when it comes to the "godfather" of Internet e-commerce, Bezos can't do without two things. One is to establish Amazon and put it on the throne of the world's largest e-commerce company. The other is to establish the space company Blue Origin, which launched the first shot in the human space business warThe engine's liquid oxygen methane engine has a thrust of 240 tons, which is 40 tons more than Musk's Spacex Raptor.

In this issue, EBC takes you to the legendary life of Jeff Bezos, the "Godfather of E-commerce", one of the world's top ten richest people.

It's a preacher and also a mercenary

In one of Bezos's favorite books, Monks and Riddles, the author Randy Komisa once mentioned two roles of entrepreneurs: missionary or mercenary.

The "evangelist" type of entrepreneur is an idealist who attempts to make the world a better place; And the "mercenary" type of entrepreneur is a mercenary who can do anything bad in order to make money.

And Bezos is the interpretation of these two identities.

1. A genius's childhood is always somewhat unique

In 1968, Jackie, who was only 20 years old, remarried with her illegitimate son to an engineer named Miguel Mike. Since then, the baby has a new name: Jeff Bezos. According to convention, celebrities always show some uniqueness when they are young.

There are two things recorded in various articles and biographies about Bezos. One is that when he was 3 years old, he took a screwdriver and dismantled his crib; The second thing is that when he went to the amusement park to play, the other children only focused on playing, while he was focused on studying how the transmission belts and gears of those amusement facilities worked.

In order to support Bezos' dream of becoming Edison when he grew up, his mother tirelessly searched local stores to help him purchase various physics experiment accessories, and asked him to make his own robots, hovercraft, solar stoves, and so on. Bezos himself also invented many small things, such as alarm bells to prevent his younger brothers and sisters from entering his room, and various mechanisms to trap people.

Like Elon Musk, Bezos was a huge fan of the science fiction film "Star Trek" when he was a child, and he could almost memorize all the lines from the film. And Bezos' love for space also has a unique condition - his grandfather Preston works for the Advanced Research Projects Agency (also known as DARPA) of the US Department of Defense, often telling him various things about rockets, missiles, and space exploration.

In terms of emotions, Bezos started dating from high school. This relationship didn't come to the end, but he and his girlfriend Werner started a business together in high school and made some small money.

They may be considered pioneers in knowledge payment, starting their own businesses by forming a "Dream Academy" during the summer vacation, teaching 10 year old elementary school students about black holes, nuclear deterrence, interstellar travel, and other topics, claiming to "help children think about old problems with new ways of thinking". A 10 day course costs $150, which was not a small sum in that era, but due to Bezos' academic dominance, the course was very popular.

Bezos in his student days

After graduating from high school, Bezos was elected as a student speaker. On the podium, he shared his dream of establishing a base in outer space, allowing all humanity to enter space, and turning the Earth into a huge national park.

For this dream, Bezos ambitiously entered Princeton University. After graduating from Princeton University, I got my degrees in computer science and electrical engineering. At this time, in the mid-1980s, the communication industry was at its peak, and Bezos' two degrees were very popular, receiving offers from a group of top companies such as Intel, Bell Labs, and Andersen Consulting. But in the end, he didn't choose these big companies, but instead chose a startup company called Hotel.

Subsequently, he left the company and collaborated with Halsey, the founder of CNETMinor co founded a fax news service company, but the startup ended in failure. Afterwards, Bezos switched jobs to hedge fund company D. E. Shaw&In 1994, at the age of just 30, Bezos became the youngest vice president of the hottest hedge fund company on Wall Street, promoted within just four years.

But that year, Bezos discovered something even more exciting

2. The spirit of "evangelism" in entrepreneurship

In February 1994, it was precisely when the internet began to explode. Bezos saw an article that read: From January 1993 to January 1994, the network transmission speed of strings increased by 2057 units, and the network transmission speed of data packets increased by 2560 units.

Bezos made a simple calculation and came to the conclusion that in the past year, the internet has grown by 2300%. In fact, it was later confirmed that this calculation conclusion was incorrect, but it was precisely this erroneous number that guided Bezos on the right path.

Soon, his idea for Amazon was born, and he listed 20 product categories that could be sold online. Finally, he decided to sell books because their standardization was high enough and their variety was diverse.

He quickly went to California to recruit two senior programmers, and upon returning, he made a resignation report. He then packed his luggage and sent it to the west, and flew with McCann to Texas. He borrowed a second-hand Chevrolet from his dad and headed northwest.

At the beginning, the company kept everything simple. The garage is the office; The door panel is horizontally facing the office desk; The servers are all connected to household power sources and consume a huge amount of electricity. As soon as the power is turned on, the fuse burns out. Later, it was only stipulated that high-power appliances were not allowed to be used at home during work, so the Bezos couple had to wait until midnight to sweep the floor and blow their hair, because only then could they use a vacuum cleaner and hair dryer - but later on, Bezos couldn't use anything because his hair had almost fallen off.

Amazon in its infancy

In the past few months, the business was dismal, mainly due to website development. After 9 months of company registration, the beta version was launched. The first order was placed by an acquaintance named "Wainwright". Later, in commemoration of this historic order, Amazon's headquarters dedicated a building named "Wainwright Building".

Every early order excited all employees. They also wrote a program specifically to connect website orders with computer ringtones. Every time a new order arrives, the ringtone rings once, and everyone cheers and runs over to see whose acquaintances have placed the order. After a few weeks of testing, the bell had already sounded too frequently, to the point where it had to be turned off.

In July 1995, the official version of the Amazon website was launched. In the first week of opening, the order count reached $12000; In the third week, the daily order count exceeded $10000. Within the first month, Amazon sold books in every state in the United States and 45 countries worldwide.

In its early stages, Amazon adopted a "no inventory sales" model. This sales model has a long process, slow delivery, and a large internal workload.

In order to cope with those orders, the Bezos couple and their colleagues packed, sorted, transported, and shipped them upside down day and night... often had to be busy until midnight. The next morning, Bezos had to personally drive the sorted books to UPS for shipment. Bezos later became too busy and dizzy. Once, he grabbed the coffee from his desk and drank it without even noticing that the cup of coffee had been sitting for a whole week and had solidified into a paste.

Early Amazon web pages

The rapidly developing business has quickly tightened Amazon's capital chain. Originally, the financing raised by family and friends quickly burned out, and Bezos predicted that the company would lose $300000 in 1995. So Bezos searched everywhere for investors to raise funds.

Bezos boasted to every investor that by 2000, the company's sales were expected to reach $74 million to $114 million. But most people refused him. After several twists and turns, Bezos only raised $1 million.

In May 1997, Amazon went public less than three years after its establishment; This year, Amazon's performance increased by 838% to $150 million, surpassing its previously predicted 2000 target three years in advance. And this $1 million is approximately $50000 invested by 20 investors each, with a shareholding ratio rounded to 1%. Now, the value of each investment is approximately $16.71 billion, with a return rate of approximately 334200 times, as investors hold all the shares and have never been diluted by subsequent investors.

Bezos has always had a dream, hoping that the Amazon website would be an 'Everything Store'Store), allowing customers to be able to buy anything they want. Of course, this is actually impossible to achieve, but Bezos has always implemented this approach in its business philosophy. The smiling face on the Amazon logo, with an arrow pointing from A to Z, originally meant to encompass all books sorted alphabetically from A to Z.

3. A detestable 'mercenary'

Since its establishment, Amazon has been losing money for most of its years. Around 2001, when the Internet foam burst, Amazon's stock price experienced a long period of low. At its worst, it directly fell by more than 90%, from $107.13 on December 10, 1999 to $5.96 on September 28, 2001.

Market opinion, Wall Street, and many executives within Amazon are not optimistic about Amazon's development prospects. The company suffered severe losses, internal management was chaotic, stock prices did not improve, investors were nervous, and many people predicted that Amazon would collapse soon.

Only Bezos has boundless confidence in the company's future. At that time, he heard the word "flywheel effect" from James C. Collins, a famous management scholar, and immediately hired Collins as a management consultant to attend the company's management meetings and board of directors at Amazon to brainwash employees.

The flywheel effect roughly refers to using low prices to attract customers. More customers mean higher sales, and higher sales also attract small and medium-sized businesses to open stores on Amazon. Amazon's infrastructure expenditure costs are more shared and efficient, and higher efficiency and lower costs can further reduce prices.

But this customer-centric strategy is built on the pain of employees, partners, and competitors.

Amazon employees work more than 60 hours a week (equivalent to 6 days a week and 10 hours a day), which is the minimum requirement. When busy, not only do they have to allocate all their time, but they also need to seek help from family and friends to complete their work performance. A large number of workers, receiving extremely low wages and enduring extremely harsh working conditions. For a long time, Bezos was willing to let the hospital ambulance wait at the warehouse entrance to pick up patients, rather than installing air conditioning for them.

In March 2021, Amazon's Italian employees went on strike

For executives, what is even more unbearable is Bezos' bad temper. Every time an executive reports to him, it's like a mouse meeting a cat. Almost no executive's job can satisfy him, so every time he reports, the executive always gets a cold and sarcastic meal. In severe cases, Bezos or even the entire person will lose control, with bulging veins, congested eyes, and shouting at subordinates.

As a result of the above, Bezos was rated as the world's worst boss by the International Trade Union Confederation in 2014.

Amazon's business first uses internet traffic to attract merchants to supply or open stores on Amazon. When Amazon's traffic accounts for a significant proportion of merchants' revenue, Amazon will force merchants to continuously sell and then sell, until all profits are squeezed out.

When merchants cannot tolerate Amazon's harsh conditions and want to renegotiate, Amazon's team will stop cooperating with merchants without saying a word, causing a sharp decline in merchant business revenue.

When facing competitors, Bezos adopts a ruthless policy of "destroying you, what's the matter with you". He will use various commercial means to stifle the development space of his competitors, causing them to go bankrupt or be acquired by himself. During the acquisition process, we will try to lower the price as much as possible. If the other party does not agree, Bezos will do everything in his power to keep the other party's company until he dies.

The federal government of the United States is not going to pull a single hair from Amazon. Amazon is going to do everything possible to evade taxes. According to CNBC, in 2018, Amazon had a profit of $11 billion, but paid zero federal taxes and received $129 million in federal tax refunds.

In this way, Amazon is doing everything possible to please customers, squeezing employees and suppliers, ruthlessly cracking down on competitors, and avoiding tax responsibilities to the government as much as possible, rapidly developing.

Bezos' Three Great Moves

1. EBook Kindle

Influenced by Apple's iPod, Bezos also wants to develop a similar hardware, but not to install songs, but to install e-books. In 2004, Bezos entrusted the former head of the book business, Kessel, with the task of developing an e-book reader.

Due to lack of experience in hardware development, e-books have been delayed for over three years before being officially launched. The Kindle became very popular as soon as it was launched, and the first 25000 devices were sold out in just a few hours. Afterwards, despite Amazon's urgent production, it never caught up with the level of market demand.

It can be said that since the introduction of the Kindle, the way humans read has fundamentally changed from the past - although the Kindle is not the world's first e-book reader, it has made this reading method popular. For a long time, the Kindle has almost become synonymous with e-books.

Although the Kindle accounts for a small proportion of revenue, it has played a huge role in enhancing Amazon's reputation and brand image. It has also taken Amazon a step closer to the essence of a technology company.

2. AWS Cloud Business

In 2002, Bezos instructed his team to develop an APIs (Application Program Interface) system to facilitate third-party access to Amazon's website, as well as to use Amazon's "one click order", payment system, and shopping cart features.

The team quickly developed this feature and invited developers to join the Amazon platform. They gave this service a name called "Amazon Web Services", which means Amazon WebServices, abbreviated as AWS. The emergence of AWS has driven the commercialization of cloud computing.

Bezos defined cloud computing as infrastructure such as water and electricity from the beginning, so the fees are very low and highly popular among users. Since the emergence of AWS, the way internet entrepreneurship has completely changed, and the founding team no longer needs to spend valuable investment on purchasing servers, databases, etc. Instagram, Pinterest, Netflix, and even NASA and CIA all place data on AWS.

Bezos' vision was so far ahead that for a long period of time from 2002 to 2010, AWS had almost no competitors, equivalent to being the only one swimming in the boundless blue sea. It defines the standards and models of this industry, leading a new era.

In 2020, AWS had a revenue of $45.4 billion, accounting for the world's largest share of cloud services, followed by Microsoft, Google, Alibaba, and Tencent, none of which combined.

Amazon, which owns AWS, has since shaken off the brand of a retail company and truly become one of the top technology companies.

3. Blue Origin

In Bezos' heart, he never forgot his childhood space dream. His friend even said that he made so much money for the purpose of exploring space.

So, in early 2000, he secretly registered a company in Kent, Washington State; He did not use Amazon personnel, but instead recruited a group of employees specifically engaged in aerospace research; I also bought a large area of land near his grandfather's farm where he stayed when he was a child, as a base for rocket research and launch.

This company is known as "Blue Origin", which is second only to SpaceX.

Sign of Blue Origin

The main task of the company is to develop reusable spacecraft to make space travel cheaper and more reliable. At present, the main product that the company has produced is the "New Shepherd" rocket, and the main product under research is the "New Glen" rocket.

Perhaps for his reverence for his dreams, Bezos has always kept it a secret, and from an outside perspective, the company has been quiet.

It was not until the first successful launch in 2015 that Blue Origin became known to the public. The company's slogan is: "GradatimFerociter ", according to Bezos himself, these two Latin letters mean" Step by Step, Ferociously.

Every year, he invests $1 billion in his space exploration company Blue Origin, which became one of the first commercial companies to launch reusable rockets in 2016.

On July 18, 2018, Blue Origin sent the new Shepherd spacecraft to high altitude to test its safety system.On July 20, 2021, Bezos, his brother Mark, aviation pioneer Wally Fink and Dutch student Oliver Damen boarded the New Shepherd, completing the first successful manned flight of Blue Origin, reaching an altitude of more than 62 miles before landing safely.

Save up your inventory and pay for your dreams

Since the fourth quarter of 2009, Amazon's stock price has been continuously rising. In 2009, it exceeded $100, in 2011 it exceeded $200, in 2013 it exceeded $360, and in 2015 it exceeded $600... So far, Amazon's stock price has stood at a high of over $3000.

With the soaring stock price of Amazon, Bezos' personal wealth has also skyrocketed. In 2017, his wealth exceeded $100 billion for the first time, surpassing Bill Gates and becoming the first person in modern history to have a wealth exceeding $100 billion. In 2020, he became the first person to have a wealth of over 200 billion US dollars.

Besos even has a website called BezosExpeditions.comOur website provides him with over 30 major investment projects and charitable causes. The title of 'Expeditionary Soldier' is appropriate, as Bezos' investments are not only concentrated in one or two industries or even market sectors; On the contrary, they represent distant explorations into many different business areas and ideas, including cloud computing, robotics, biotechnology, and even homemade glass.

On February 2, 2021, Bezos announced that he would resign as CEO in the third quarter of this year and only serve as the executive chairman of the company's board of directors. His personal focus will shift to Day1 Fund, Bezos Earth Fund, Blue Origin, Washington Post, and other favorite things.

Born in Bezos in 1964, he is only 58 years old. His true dream journey has just begun.