Jeff Bezos and Amazon represent amazing stories of an individual and a company that have broken several boundaries across different sphere of lives. At KDP College, we beam our searchlight on this great entrepreneur and the amazing Amazon conglomerate.
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Family background of Jeff Bezos
Jeff Bezos was born born Jeffrey Preston Bezos on 12th January 1964 in Albuquerque, New Mexico, Jeff Bezos demonstrated the ingenuity and creativity that was to stand him in good stead in life from an early age.
He dismantled his cot into its components parts when barely a toddler using a screwdriver he ran across.
Jeff Bezos’s father
Jeffe Bezos’ father, Bezos Sr. was an engineer with Exxon. He had to move a lot so the family was never in the same place for long.
Jeff Bezos, on the other hand, was mesmerized by theme parks and was a regular visitor to the best of them all, Disney World. Unlike nearly everyone at his age, it was not the roll coaster rides that had captured his imagination but the sheer prospenity and breadth of vision and ambition of founder Walt Disney.
Formative Years of Jeff Bezos and Amazon
Jeff Bezos was a gifted and bright student got admitted to study Physics at Princenton. He had to switch to Electrical Engineering and Computer studies when he found it tough coping with the rigors of studying Physics. He graduated from Princenton summa cum laude in 1968.
Bezos at FITEL
In 1968, the same of his graduation from school, Bezos joined FITEL, a high-tech start-up company in New York where he built a computer network for financial trading. He soon earned a reputation as a reliable software man.
Jeff Bezos at Bankers Trust Company
In 1988, Jeff joined Bankers Trust Company, New York, leading the development of computer systems that helped manage over $250 billion in assets and becoming their youngest vice president in February, 1990.
Not on to stagnate in one place, Bezos took on the next challenge by switching jobs again, this time to D.E. Shaw & Co., New York. Here Bezos helped the Wall Street firm build one of the most technically sophisticated and successfully quantitative hedge funds on Wall Street. By 1992,
Bezos had ascended to become the youngest vice president in less than two years. He held this post for two years.
The big discovery
In 1995 while surfing the internet, Bezos came across an astounding fact. According to the existing statistics, the Internet was growing at a staggering rate of 2,300% a year.
This stirred the entrepreneurial side of him, and mixing his passion for computers and his insider knowledge of the financial world on Wall Street, Bezos sensed an opportunity.
Bezos, having learned the organized ways of bankers on the Street, took pen to paper and made a list of about 20 of the most promising goods for online commerce. It came down to a choice between books and music.
Finally, he made the decision to go into book selling for two convincing reasons. Even the banker the decision was based on numbers. With over 1.3 million books in print, against a paltry 300,000 in music titles for CD’s, the statistics were leaning in favour of the books.
The other reason was the competition. The six major distributions companies had a stranglehold on music distribution companies that would be hard to break whereas the largest book chain in the world,
Barnes & Noble, had only 12% of the book market under their control. Bezos reasoned that he would be better positioned to compete in the more open book market than in the closely knit music industry.
Amazon journey started in a garage
Quitting his job on Wall Street, Bezos took a few belongings in a Chevy Blazer and drove across the country looking for a suitable location with his wife Mackenzie doing the driving while Bezos worked the phone getting capital for his venture.
He eventually settled on Seattle, Washington. With a wealth of high-tech talent created by the presence of Microsoft Corp, a major book district ( Ingram) in nearby Oregon and with no state tax, it seemed the perfect location.
In the garage of his age rented home in Seattle, Bezos and his three employees set up base and started writing the software for his new business. Bezos had planned to name the company Cadabra, a reference to the age long magic incantation.
But close connotations to the word, Cadabra convinced him to change it to the name of the world’s longest river and Amazon.com was thus born in a garage in Seattle.
Amazon website was launched
The web site was launched in July 1995 to sell books through the Internet. These were the early days of the Internet and the web site was unattractive.
However, it worked quite well despite a lack of key information such as publication dates. And Tom Albert from the Martina Venture Group was impressed enough to invest $100,000 in Amazon in 1995.
Amazon community emerged
Amazon quickly became more than an online bookstore. It soon became a community in which customers could create book reviews online and research others before buying. It became not just a case of buying books but also sharing opinions.
Jeff Bezos and Amazon: Amazon. com
Amazon. com Inc, according to its corporate website, opened its virtual doors in July 1995 to use the internet to transform book buying into the fastest, easiest, most enjoyable shopping experience possible.
In 1996, its full financial year in business, Amazon. com generated $15.7 million in sales. In May 1997, Amazon. com raised £54 million in an initial public offering as it launched itself on the stock market.
The 1 millionth order
In October 1997, Jeff Bezos himself hand delivered Amazon’s 1- millionth order to a customer in Japan. By 1999, Amazon. com had a capitalization of more that $6 Billi, far in excess of its two closest rivals, Barned & Noble and Borders put together.
Amazon. com reached its target of $1 billion in sales by 2000, but investors were wary of the company never having reported a single cent in profits. Bezos was quick to point out to the naysayers that Amazon. com was still in the investment phase and needed more time before declaring profits.
After establishing a strategic alliance with Internet Service Provider AOL, Warren Jenson, Amazon. com’s chief financial officer WS predicting pro forma operating profitability towards the end of 2001 beginning of 2002.
Lessons and Conclusions
Amazon. com is in reality nothing more than a collection of hyper-poweful servers with a good interface. Bezos had succeeded in creating a virtual bookstore that has in its database, most information than any other bookstore or library in history.
This had taken a lot of dedication and the making of informed decisions. He proved to the business world that the internet was about more than just the dissemination and exchange of knowledge and information. It was also the arrival of a new era which would change the way business is conducted on a global scale.
Marketplace of the future
Bezos has proved that in addition to being a vast source of information, the internet is also the marketplace of the future. He has in essence built the largest e-commerce venture and also its the most successful.
By driving down costs marketing costs and overheads, Amazon. com has managed to stay at the top beating its lesser streamlined competitors through utilization of the power of the Internet.
Ironically Amazon. com’s the best performing division is the music division; selling the same CD’s that Bezos WS initially convinced would not amount to anything.
This shows the adaptive nature of the man at the helm at Amazon. com entrepreneur, Bezos occupies a unique position in the e- commerce world. He is the guy who showed the whole world that it is possible to be an entrepreneur on the internet armed with nothing than a good idea, brains and a dedicated working team and make billion in sales.
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