Jeff Bezos has created one of the most valuable firms, which impacted commerce, technology, clouds, media and many others. However, before, Amazon turned into the internet goliath that generates over $386 billion in annual sales it started from scratch led by Jeff Bezos’ passion, vision and appetite for risks.
Entrepreneurship was in Bezos from childhood, he had developed various business ideas that he implemented as a teenager. He came from Princeton University with a degree in computer science and electrical engineering and battled to build a career on Wall Street. But in 1994 at the age of 30 he decided to take the risky move by leaving his well paid job and get into building an Internet business.
The Origins of Amazon
After extensive analysis to identify a business that would help the company enter the niche of the slowly emerging internet Business, Jeff Bezos stumbled upon an idea of an online Bookstore. At the time, books was a $25 billion per year market in the U.S, but insufficiently present online. Thus in his garage in Bellevue Washington with only his computer and sheer determination Bezos began constructing Amazon.com, which he called the earth’s largest river as the scale of what he wanted to achieve.
When Amazon.com went live in July 1995, it was a simple dot.com bookseller using Linux servers and catering titles well over a million – figures no brick and mortar store could offer. From flexibility opens for business within 30 days, utilizing the opportunities of the world wide web, Amazon began to deliver books all over America. Jeff Bezos in particular was involved in the functioning of the business at a very micro level right from software coding to customer support, the man often put in more than 12 hours in a day all from the comfort of his home office.
The 1st Big Success – Amazon IPO
Despite the critics who doubted the future of internet commerce, Jeff Bezos’ single-minded determination to create value to match internet innovation and be a winner on the customer satisfaction stakes worked a treat. Again unlike other companies like Wal-Mart which often issue press releases and spend vast amount of money on their marketing, Amazon expanded incredibly as more and more customers recommended it to their friends and family. In the end, it took only 15 months to get to the $20 million worth of sales only by reinvesting the earned revenues to increase the company’s activity.
This rapid growth shortly draw attention of investors and Company went public to expand its capital base. In fact, Amazon has gone public and achieved a very successful IPO launch on NASDAQ on the 15th of May in 1997 under the security code of AMZN per share at $18. Stocks went up by 23% on the opening day itself and yet Amazon had no profits then – but Jeff Bezos knew that profits were closer than most people reckoned. Availability of cash from the IPO was instrumental in offering amazon a wider technological lead over the industry this way new product categories were launched, hence, leading to higher growth and revenues.
The Dotcom Crash – Testing Time
The growth plot did not stop in the year under review and the company extended its sphere of influence into new domains such as music, consumer electronics, toys and games in the following years. By the end of 1999 it had expanded operation not only nationally but Internationally with launching of new retail points primarily in UK and Germany. However, a series of problems arose beginning with the year 2000 which almost made this company – which is still operating in the red – collapsed.
The events of dotcom era of 2000-2002 saw the NASDAQ composite index drop to almost 80% in two years . Later those high-growth Internet companies such as, amazon, felt the heat of investors whose focus shifted from growth to profitability thus taking a huge blow and saw the price drop from $100 to $5 per share.
However, Jeff Bezos did not waver from his long-term strategy and at his famous “You Can Either Act, or Don’t” 2001 memo to employees exhort them to keep focused. And Gonzales was right that customer over everything as the one enduring principle means not cutting expenses that impact the customers.
The History of Change – Prime, AWS, and Kindle
The first signs of the technology segment stabilization could be observed by the beginning of 2003 to let Amazon return to its growth track. It had increased choice offering and effectively handling the business during the downturn; it is prepared for the subsequent retail growth after the quarter. It was also the year through which it started new revolutionary strategies such as Amazon Prime and AWS or Amazon Web Services that would turn into one of its main support structures.
Amazon Prime started in 2005 providing 2-day free shipping to consumers for $79 and revolutionizing consumer delivery experience almost instantly. Another innovation was AWS launched in 2006 for offering cloud computing in a broad range to the business – now the largest in its field worth over $300 billion; In 2007; the first of the Kindle electronic readers were launched to ride the growing wave of eBooks.
All three of these ventures – Prime, AWS and Kindle – squarely addressed the consumer need for convenience and have helped drive fantastic increases in company revenues since. Now, by remaining loyal to his customer-oriented vision, Jeff Bezos was able to make turbulent times turn into even better for Amazon.
Organizational Culture Of Innovation Involving Jeff Bezos
Still the second largest employer in the United States, Amazon has maintained the spirit of the start-up future that Jeff Bezos shaped during the company’s early days in the garage. He wanted the company to “wander”, which implies the exploration of new ideas outside of the core business but these led to fundamental offshoot businesses. Jeff Bezos also encourages experimentation across all levels of the company saying –“If you increase the number of times you try things by 2 then they amount of invention you do also go up by 2.”
Amazon was seeing items that were truly aligned with Jeff Bezos’ leadership vision of expanding Amazon into offering everything from original video content for Prime Video to state of the art artificial intelligence in Alexa. It used technology innovation not to market products but transform sectors compatible with his vision of the world made by knowledge.
Since its creation, it has become a $1.7 trillion company, still present in Jeff Bezos’ strategic orientation built from day 0, long-term considering, inventiveness still regarding the customer’s perspective.
Points to ponder when following the Bezos’ journey
Some key lessons from Jeff Bezos’ incredible entrepreneurial journey that drove Amazon’s stratospheric rise:
He is advocating for entrepreneurs to remain focused on the long-term vision distinct from allowing short-term challenges dictate the process.
Published study findings: Care more about customers than competitors
Permission to try out new ideas on a small scale and permission to try out new ideas on a grand scale
Take risks by peering, into the future, and making forecasts about the possible actions of others
– Remobilise resources particularly focusing on people and customers instead of profit.
Bezos once exhorted that his role for each year is to make, “three big bets” on emerging opportunities with passion and risk taking propensity. The story of Amazon is the story of a man with a vision who never blinks, never looks at short term and who built organizations that have changed the world.
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