Many have marvelled at the success stories of self-made billionaires like Bill Gates and Mark Zuckerberg. Warren Buffett, the third-richest man in the world, has fed that fascination by offering decades of aspirational financial advice to an appreciative global audience. Now there’s Jeff Bezos, iconic founder of Amazon and the wealthiest of them all in 2019, breaking records as the first person to amass a fortune over $100 billion.
The wildly ambitious Bezos has transformed an initially niche service into a global superpower of eCommerce while successfully taking on additional roles such as media mogul and architect of future space travel. It’s no surprise that a lot of people aspire to achieve some fraction of the success of a man whose CV could double as a character description for a Bond villain bent on world domination.
So, how did he do it? Let’s take a look at Jeff Bezos and his evolution from a precocious child to the richest person in the world.
Early Role Models
Bezos was, by all accounts, an ambitious and inventive child. He famously took his own crib apart with a screwdriver when he wanted his own bed. He also engineered an alarm to keep his younger siblings out of his room. Luckily, he had three strong role models that gave him an excellent foundation for later success.
Jeff’s parents, Jackie and adoptive father Mike, were extremely supportive of young Jeff’s scientific and experimental pursuits, but without spoiling him. Jackie wasn’t afraid to tell him when desired gadgets were too expensive for the family budget, encouraging him to create alternatives on his own. Mike’s story, as a Cuban immigrant who arrived alone in America as a Spanish-speaking teenager and became an engineer for Exxon, doubtless inspired the future Amazon CEO with his fortitude and pursuit of the American dream.
Bezos also spent summers doing manual labour at his grandfather’s farm in Texas. Jackie’s father had enjoyed an impressive career in space technology, missile defence systems and atomic energy, and helped further encourage his grandson’s interest in scientific invention.
Bezos was high school valedictorian before enrolling at Princeton. There he showed the first signs of how he tempers his aspirations with extreme pragmatism. Early on, he relinquished his dream of being a theoretical physicist. ‘I looked around the room,’ Bezos explains in a 1999 interview with Wired, ‘and it was clear to me that there were three people in the class who were much, much better at it than I was.’
Bezos graduated in 1986 with a degree in computer science and electrical engineering instead. After a few years at tech start-ups, he took on a VP role at D.E. Shaw, a hedge fund where he avidly pursued automated and internet opportunities in the financial realm. It’s also where he met his future wife MacKenzie and began to formulate his plans for Amazon.
1994: The First Leap
While the timeline of Amazon’s inception makes it seem like the initial idea and the company happened almost simultaneously, Bezos clearly had learned a lot in three years at D. E. Shaw. What motivated him the most was the incredible potential he saw in the exponential growth of the internet, and he left Shaw in 1994 to pursue his eCommerce ambitions.
‘I told my wife MacKenzie that I wanted to quit my job and go do this crazy thing that probably wouldn’t work since most start-ups don’t,’ Bezos said in a 2010 address at Princeton. Once again, Bezos combined risk with practicality. He chose books as his business because his research had revealed that two of the country’s largest distributors, Ingram and Baker & Taylor, already had exhaustive electronic lists of their inventory.
Another of Bezos’s ongoing strategies for success is surrounding himself with intelligent, multiskilled people. His now-former wife, also a Princeton grad, expert researcher and future author, assisted Bezos with the start-up of Amazon, taking an active role as accountant in the early years.
Bezos also recruited programmers Shel Kaphan and Paul Davis to get his project off the ground. Both had had experience with failed tech companies and start-ups, so had valuable business insight to offer alongside their computer skills.
The Birth of Amazon
Bezos financed his new business with an impressive million dollars from angel investors, including family, Princeton and Wall Street friends, and a huge chunk of capital from his parents’ life savings. According to Investopedia, one of those initial investments of $50,000 in Amazon would in 2019 be worth around $6 billion.
No one could have imagined then that the launch of a book-selling business from a garage in a rented suburban Seattle home could be so successful. Amazon.com opened its virtual doors in July 1995 and in just one month, they were making sales to people in all 50 states and 45 different countries. By September, there was $20,000 a week in sales.
The story of Amazon reveals Bezos as the epitome of the perfect entrepreneur. He did his research, but he made his move into eCommerce as quickly as possible. Second-guessing his ideas would have caused him to miss that perfect opportunity to capitalise on a brand-new market.
Building the Amazon Brand
One of the main goals of every successful entrepreneur is to value your customers. No one believes this more than Bezos, who created Amazon with the specific intention of developing a community of customers who would contribute their ideas and honest reviews, network, and drive the market. In 1998, he polled those customers on the next step for Amazon. Their responses inspired him to pursue offering every possible product that consumers need.
Bezos didn’t worry about the daunting task of becoming a global superstore. ‘I am never disappointed when we’re not good at something,’ he explained in a 2016 interview with Charlie Rose, ‘because I think, “well, think how good it’s going to work when we are good at it”.’
Amazon’s Infinite Innovations: Shipping, Viewing, Reading
By 2001, Amazon was making annual sales of $17 billion. Many would consider this a successful business and look for ways to simply maintain the status quo. For Bezos, his stunning list of achievements in business was still not enough.
The CEO of Amazon is known for his stringent hiring policies and his aim to continually hire the most innovative, capable employees. That dynamic environment produced four powerful initiatives in the middle of the decade. This included Amazon Prime for shipping, Amazon Unbox for video downloads, and AWS for cloud computing. Bezos also dove into the e-reader market in 2007 with the Amazon Kindle. Within three years, sales of Kindle books had outpaced those of hardcover books.
Conquering the World of Streaming
Bezos and his rise to power haven’t been just about innovation. The ability to repeatedly adapt those innovations to suit the changing market is another important component of success.
Amazon Unbox became Amazon Instant Video, and then just Amazon Video. As internet connections improved, the focus shifted from downloads to streaming, and the variety of programming continued to expand. In 2010, Amazon created their own studio, intent on offering original TV shows and movies by writers and filmmakers that had been overlooked by Hollywood.
In 2012, Amazon combined two of its services, offering its Prime customers access to a large selection of their Amazon Video catalogue in addition to the shipping perks. Though it took a while for people to catch on, within 6 years there were 100 million Prime members, bingeing on free TV while still contributing heavily to Amazon’s ever-ballooning sales figures.
Failure Is an Option
Bezos’s most notable disaster was the poorly reviewed Amazon Fire phone, released in 2014 and shelved the following year. ‘You’ve gotta accept that your business is going to be in many ways an experiment, and it might fail,’ Bezos told the audience at Amazon’s 2019 re:MARS conference in Las Vegas. ‘That’s OK. That’s what risk is.’
Other ambitious gambits, like Amazon delivery via drone, hasn’t quite gelled (or gotten full FAA approval) as quickly as Bezos has promised. The lesson from the world’s highest-paid CEO, however, is to just keep moving forward. There are always so many experiments going on at once, that even a multimillion-dollar gaffe like the Fire phone didn’t slow Amazon down.
Case in point: that same year the Fire launched, Amazon introduced its virtual assistant AI, Alexa. Five years later, they reported they had sold 100 million Alexa devices, and there are now more than 150 products that come with Alexa built-in.
Bezos and the Big Picture
Bezos summed up the success story of Amazon in an interview for his biography, penned by Brad Stone. ‘We are genuinely customer-centric, we are genuinely long-term oriented, and we genuinely like to invent. Most companies are not those things.’ In a world where CEOs abandon companies that aren’t immediately profitable, Bezos has out-earned them all by wanting to build something that lasts.
How he feels about being the richest person in the world is another important aspect of the Amazon CEO’s life story. In the 1999 Bezos feature in Wired, his high school girlfriend Ursula Werner – herself a Rhodes Scholar – recalled that ‘it wasn’t about money itself. It was about what he was going to do with the money, about changing the future.’
Twenty years later, Bezos is indeed investing that money in the future. The most ambitious project is Blue Origin, an organisation whose mission statement is ‘building a road to space so our children can build the future’. As far-fetched as a billionaire’s personal mission to seek out new frontiers off Earth may sound, in 2019 NASA teamed up with Blue Origin.
Drawing Inspiration from Jeff Bezos
Whether you want to be the richest person in the world or just start an online store that you hope will be profitable, we’ve seen there are many lessons to learn from Bezos. One of the most important is finding that balance between passion and pragmatism. To make those sacrifices to practicality easier, remember that Bezos only temporarily set aside his dreams of space exploration. The more sensible path then earned him the money to pursue whatever he wanted.
In 1994, Jeff Bezos quit a lucrative job to pursue a brand-new idea of selling books online. He says now that he’s happy, he took the ‘less safe’ path. His choice of words is important for anyone aspiring to be the next Bezos. As we’ve seen here, that leap of faith was just one tiny part of all the smart decisions he made to reach that pinnacle of success.
Have you been inspired by Bezos to start your own business? What do you think is the most important lesson from his success story? Join the discussion and let us know in the comments below!