December 6, 2011
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"If they could see me now!" must be what Jeff Bezos thinks every time he reflects or reads all the naysaying Wall Street pundits who constantly criticized him for not turning a profit for years after the 1995 launch of Amazon.com.
Sixteen years later, Amazon is without a doubt a massive market maker and shaker, business model disrupter and relentless innovator. Nearly everyone uses the "1-Click" analogy at some point in their business life, to make a case for user interface simplicity and business innovation—not just because of the inherent simplicity, but because the 1-Click patent (hailed by one intellectual property law journal as "the most memorable example of an unoriginal software patent,") forbids any other online retailer from using a 1-click purchasing option without paying a royalty to Amazon.
If you're a voracious content consumer like I am of articles and blogs targeting the likes of Amazon, Google and Apple, you'd know that to this day Amazon has many critics, and that after you peel away all the rhetoric of the many digs, you see a snarky theme that goes something like this: "Bezos is just a big greedy bully, not an innovator."
Really? Due to the Amazon patent nicknamed "1-Nod," it may not be long before you can make purchases simply by nodding your head at whatever screen you have in front of you. And last December the Internet was all abuzz about the Amazon patent that lets you return a gift gotten through Amazon before it even arrives. The listed inventor? One Jeff Bezos. (When I attended the Stanford design school "crash course in design thinking," which I wrote about on OPEN here, our goal was to redesign the gift-giving experience. Not a single person thought of this idea.)
Author Richard Brandt chronicles the Jeff Bezos story and the rise of Amazon in his new book, aptly titled One Click. Brandt is an award-winning journalist who has been writing about Silicon Valley for more than two decades. He's well known in the technology community as a former correspondent for BusinessWeek, where he won a National Magazine Award. He is also the author of The Google Guys, about Google founders Page and Brin.
Now, One Click isn't the kind of deep and sweeping biography that Walter Isaacson wrote with Steve Jobs, but I believe that for entrepreneurs and small business owners, the story of Jeff Bezos may be a more useful and applicable one. It's at once a concise history, an honest profile of the man and his mission, and a decent blueprint for how to change the world.
My favorite parts of the book dealt with Bezos's passion for innovation, his relentless pursuit of "better," and his natural curiosity and learnership. "We know two percent today," he said in 1998. "I think Amazon.com may know as much as any other company about e-commerce, but I bet we know two percent of what we will know two years from know. This is the Kitty Hawk era of e-commerce, and most of the interesting stuff has not been invented yet."
Even during the dot com bust, Bezos was bent on pioneering. Others may have patted themselves on the back for simply surviving the storm, but Bezos decided in 2002 to a select group of engineers to work on a side business that we now know as cloud computing. Back then, no one else had even contemplated renting out time on the enormous Amazon computer system.
If you're in startup mode, be it a new business out of your garage or a new team in a larger company, you'll love "the early days." It's the classic, heroic, rags-to-riches story we all love: Bezos discovers the Internet, sees it and the explosive growth of the Web as the future of commerce, quits his New York City vice president job at financial-services firm D.E. Shaw in 1994, leaves town and moves to Seattle with his wife, MacKenzie, to start an online retail business, with the name Cadabra. The name was changed when Bezos heard someone call it "cadaver."
With "the self-confidence of Muhammad Ali, the enthusiasm of John Kennedy, and the brains of Thomas Edison," Bezos found a spot in an industrial region of Seattle with 1,100 square feet of office space, and 400 square feet of basement storage. Of course, the desks were made from unfinished doors, with sawed-off two-by-fours for legs. Three days after launch on July 16, 1995, Yahoo's Jerry Yang e-mailed Bezos asking him whether he'd like Yahoo to list Amazon on the "What's Cool" page. "We thought about it some, and we realized it might be like taking a sip from a fire hose, but we decided to go ahead and go for it," said Bezos. Orders soared, and within the week Amazon had over $12,000 in orders. "It was hard to keep up," writes Brandt. "That week, the company shipped just $846 worth of books. The following week brought in nearly $15,000 worth of orders, and the team was able to ship just over $7,000 worth of them."
The rest, as they say, is history. You'll enjoy the many Bezos quotes and anecdotes, along with Amazon employee opinions, that reveal the various quirks and idiosyncrasies of Jeff Bezos. Here are a few:
Bezos on profitability, circa 1997: "We are not profitable. We could be. It'd be the easiest thing in the world to be profitable. It would also be the dumbest. We are taking what might be profits and reinvesting them in the future of the business."
Amazon's mission: "To be Earth’s most customer-centric company where people can find and discover anything they want to buy online."
Bezos on innovative thinking: "Whenever we have a problem, we never accept either/or thinking. We try to figure out a solution that gets both things. You can invent your way out of any box if you believe you can. The thing about inventing is you have to be both stubborn and flexible, more or less simultaneously. Of course, the hard part is figuring out when to be which!"
Bezos on competition: "To be nine times bigger than your nearest competitor, you actually only have to be 10 percent better.”
Amazon programmer: "We used to joke that the ideal Amazon site would not show a search box, navigation links, or lists of things to buy. Instead it would just display a giant picture of one book, the next book you want to buy."
Bezos on strategy: "Our strategy is to become an electronic commerce destination. When somebody thinks about buying something online, even if it is something we do not carry, we want them to come to us. We would like to make it easier for people online to find and discover the things they might want to buy online, even if we are not the ones selling them.”
Bezos on markets: "We always said we would expand into areas where we could leverage the three things that businesses can often leverage: our brand name, our skill sets and our customer base."
Bezos on growth by acquisition: "The single most important criterion that we use to acquire a new company is this: Who are the people behind this venture, and what is the people bandwidth of the acquired company going to be? We are looking for business athletes indoctrinated in this space and companies that have a culture that is common with ours."
Amazon slogan: "Work hard, have fun, make history."
The emphasis of One Click is indeed the early days of startup, the trials and tribulations, hits and misses, of the entrepreneur Jeff Bezos. And it is for this reason I highly recommend One Click as a must-read for small business owners.
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