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🎁 The names Bezos, Jeff Bezos: Our deepest dive yet!
🎙️ One of the best pods in a while: Jason Fried on running great businesses.

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LEADER DEEP DIVE 🕵🏻

Jeff Bezos - Founder & ex-CEO at Amazon

Jeffrey Preston Bezos (/ˈbeɪzoʊs/ BAY-zohss) is an American entrepreneur, media proprietor and investor. He is the Founder, Executive Chairman, and former President and CEO of Amazon, the world's largest e-commerce and cloud computing company.

With a net worth of about US$170 billion as of December 2023, Bezos is the third-wealthiest person and now spends his time building rockets at Blue Origin, galavanting around on mega-yachts and eating human-growth hormone with his corn flakes.

If bicep circumference was all that mattered in life, this would be the ultimate zero to hero story. Luckily, his entrepreneurial exploits are nearly as impressive.

Before we begin, I’d like to address that there are already a lot of words written about Jeff, and rightly so. This is not going to be the most comprehensive, or likely the best account of his successes. But what I will try to achieve here is an interesting look at Jeff’s story. To me the story has a heavy slant towards two themes - customer obsession and using failure as a tool.

Early years

Bezos was born "Jeffrey Preston Jorgensen" on (my birthday) January 12, 1964, in Albuquerque, New Mexico, as the son of Jacklyn (née Gise) and Ted Jorgensen. His birth was to a 17-year old mother who was still in high school and a 19-year father who was struggling with drinking and managing his finances. The two separated less than 2-years into young Jeffrey’s life.

Jacklyn, Jeff’s mom, would go on to re-marry a few years later to a Cuban immigrant by the name of Miguel "Mike" Bezos. Jacklyn and Jeff would over time become estranged from his biological father Ted, ending with Jeff’s adoption by Mike. Enter Jeff Bezos, as we know him today.

Jeff would grow up spending summers on his grandparents’ South Texas ranch as a young boy. The experience would prove valuable in teaching him the value of ingenuity.

He would go on to talk about his learnings from his time with his pa’ as “Being resourceful. If there’s a problem, there’s a solution”. You can see these fingerprints all over his time at Amazon.

Bezos’ biographer, Brad Stone, would go on to track down Jeff’s father Ted in 2012 while doing research for his second book on Jeff & Amazon. Ted had never heard of Jeff Bezos and was shocked to see what his son had gone on to become.

He would not get his wish. Ted Jorgenson died in 2015, aged 70, without ever have reconnected with his son.

Company man: Wall Street & D. E. Shaw

Jeff finished school in 1986 and went on to take a few early roles in his career at Fitel and Bankers Trust before landing at D. E. Shaw & Co. where he would go on to become their fourth senior vice-president by age 30.

It was at D. E. Shaw that Jeff begun to scratch the itch to go and create something of his own. He was working at a hedge fund famous for creating deep mathematical models and hiring scientists and mathematicians. David Shaw, one of Jeff’s early mentors, would call his firm; “A versatile technology laboratory full of innovators and talented engineers who could apply computer science to a variety of different problems”.

Shaw originally wanted Jeff to spearhead internet projects out of the firm. The two would meet every week to discuss. First idea was, believe it or not, something they were calling ‘The Everything Store’.

Jeff, though, had stumbled upon what Shaan Puri would call a 1-chart business opportunity. He saw a report that showed the internet was growing at 2,300% a year and he knew he had to get in. With David Shaw’s reluctant blessing, Jeff left the firm to go out on his own.

That was the moment that Bezos and then-wife, MacKenzie Scott, would leave the comfy finance careers for their rented Washington garage to found the world’s largest online bookstore. And on July 5, 1994 the behemoth that would be knows as Amazon.com would be born.

Welcome to Amazon.com Books

Welcome to Amazon Books, the ‘world’s largest bookstore’. Or so the tagline of the five person team working out of a garage would have believe. “I thought maybe one day we would be able to afford a forklift”, Bezos would recall of the early days of Amazon.

But from these humble beginnings, Jeff and the team would start slowly winning internet real estate. Firstly, with the largest assortment of books on the internet. They were so successful at selling books on the internet, that on a few short years later (3), they were able to IPO on the Nasdaq Stock Exchange under the ticker; AMZN.

Jeff and the team were able to raise $54M in the offering at a price of $18 per share. If you are wondering what the opportunity was … if you invested $1,000 in Amazon in 1997 - it would be worth over $2M today.

It was with this freshly secured Nazdaq bag, that Amazon would begin to diversify it’s offering. First came music and DVDs (remember those) in 1998, followed shortly after by an expansion into electronics, toys, video games and more. “Our vision is to be the world's most consumer-centric company, where customers can come to find anything they want to buy online”.

Jeff had the foresight from the beginning to set his eyes on a much grander prize. And it was these baby steps from books to CDs to electronics that paved the way for the Amazon we know today. The Amazon where you can buy anything from a trusty banana slicer, to positive potatoes, to bacon strip bandages.

From A to Z … at The Everything Store

A quick note on the name of Amazon, and the tagline of ‘The Everything Store’. I have always marveled at the naming convention of Amazon. Why? Because not only is it named after the largest river in the world but also because of the ‘From A to Z’ tagline.

It’s just such incredible branding. I often wonder if the ‘From A to Z’ was with them from the first days or if that was something that some brilliant marketing intern stumbled upon later down the line. Either way, it works and I love it.

Fun fact, Amazon was originally called Cadabra. It was a short lived name as their lawyers thought it sounded too much like ‘cadaver’ - aka, a dead body.

By the year 2000, Amazon was running at it’s peak. It had dominated books, staked it’s claim to electronics and was conquering more SKU’s every month. Until it wasn’t. Like many other internet startups of the time, Amazon’s stock was decimated by the Dot.com crash in March of 2020. During this period, Amazon’s board began losing faith in Jeff’s ability to lead the company. So much so that they would bring in esteemed Silicon Valley executive, Bill Campbell to shadow Jeff as COO.

Google’s former CEO, Eric Schmidt, would go on to write the book Trillion Dollar Coach: The Leadership Playbook of Silicon Valley’s Bill Campbell years later. As soon as Bill joined Amazon though, he became a Bezos believer. He would reportedly go on to tell the board that they need to keep Jeff.

The faith held by Bill and the board at Amazon proved a masterstroke. Although Amazon had very lean years and 2002 saw layoffs and financial distress, by 2003 Amazon had rebounded, turning a profit of a over $400M dollars.

Customer obsession at scale

One of the reasons for Amazon’s success is Jeff’s relentless obsession in delighting customers. He has not drifted off course by 1% from his first media appearances in the late 90’s to today.

"We're not competitor obsessed, we're customer obsessed. We start with what the customer needs and we work backwards." In the world world of Amazon - the customer must always come first.

And it shows if you read Amazon’s annual shareholder letters. From the first letter in 1997, to Jeff’s final letter in 2022, the word customer is used 616 times. Compare that, to the word revenue, which is mentioned a paltry 32 times. Think about that … that’s nearly 20x more mentions of the word customers when speaking to investors. Investors that care about revenue and financial returns.

The customer obsession has lead to many product innovations over the year. Starting with one that is not so commonly thought about today - customer reviews.

It was this obsession over customers, this line in the sand, that Jeff drew from day 1 that set the focus for the company. “Focus on the things that make your beer taste better,” Bezos would famously say when pitching AWS in 2008. The beer tasting better, when applied to Amazon means; low prices, vast selection, and a trustworthy and responsive seller.

And it is this relentless pursuit of what’s best for the customer that keeps the customer coming back for more. Another decision that faced fierce opposition from the board was the idea to allow 3rd party sellers onto Amazon in the year 2000. One might assume that allowing others to come into your ecosystem and sell their products may cannibalise your own offerings. Not Jeff.

It was Jeff’s firm opinion that it would accelerate Amazon’s flywheel. More products, better for customers. More sellers, improved economics, better for customers. Enhancing programs for sellers, means more sellers, selling more product, which you guess it - is better for customers.

A small digression

On somewhat unrelated, but nonetheless interesting note, I read all of Amazons shareholders letters last year, and found incredible insights I could apply to my own company. Below is a snippet of Jeff talking about the 3rd party seller decision, redacted to change Amazon’s flywheel to my company Athyna.

Athyna places talent into remote roles with US companies, and the idea of a global jobs board had been at the back of my mind for a long time. When reading this passage I was blown away by how easily you could apply Jeff’s customer obsession to other businesses. The power of reading wins out again.

Amazon Web Services

There are a number of other successful products I could write at length about. Kindle, Prime, Audible (personal fave), Alexa. But none more so than AWS. Amazon Web Services was the spark that ignited the T-5000 version of Bezos. This turned him from the Lance Stephenson of business, to the LeBron James of technology. The Eric ‘The Eel’ of shopping, to the Michael Phelps of innovation.

Jeff Bezos of House Amazon, the First of His Name, King of the Internet and the First Cloud, Protector of the Customers, the Father of Prime, the Khal of the World Wide Web, the Unbundled, the Builder of Supply Chains.

But how and why does Amazon Web Services actually exist? How does online marketplace become the world premier cloud infrastructure? The OS of the internet. Simple, says Andy Jassy.

The idea of AWS came when parent company Amazon was continually looking for ways to enhance it’s internal infrastructure. It was an e-commerce company that couldn’t scale. They began building what would one day become AWS by untangling their internal mess and creating a suite of well-documented APIs.

Effectively, like a lot of great products that exist today, Amazon was scratching their own itch. But it wasn’t until an executive retreat at Jeff Bezos’ house in 2003 that AWS would be truly seeded. During the retreat, Jassy, Bezos and other key Amazon leaders were going through an exercise to identify Amazon’s core competencies.

E-commerce, tick. Logistics and fulfilment, tick. Something else, tick.

But there was something else that had become a core competency at Amazon - they had become highly skilled at running reliable, scalable, cost-effective data centres. In times past it would take three months just to build the database, compute or storage component for internal tooling. Not anymore.

It was then that the team at Amazon started to think maybe they could build ‘the operating system of the internet’.

So that’s what they did. AWS was first to market with a modern cloud infrastructure service when it launched Amazon Elastic Compute Cloud in August, 2006. The rest as they say, is history. Amazon Web Services did $88B in very sticky business in 2023.

When life gives you lemons

This is one of the great things about Amazon. Time after time, Amazon have taken something that is a drag on their business, a cost centre, and turn it into a revenue generating arm of the business. This is the definition of when 1 + 1 = 3.

AWS is one example. But Amazon did the same with logistics and warehousing. Once a cost centre, now known as Fulfillment By Amazon. Another cost was their marketplace and site. What is it now? A great big advertising canvas. Amazon Ads did $38B (yes with a B) in 2022 and $12B in the most up to date quarter (Q3, 2023) as of time of writing at $12B.

These are not merely turning cost centres into profit centres, this is taking cost centres and turning them into some of the biggest businesses in the world in their own right.

Another great examples of the same strategy at play is when Amazon turned Prime, a free delivery perk into a large subscription offering. Incredible.

Experimenting in failure

Failure, as defined in the dictionary, is the absence of success, nonsuccess or non-fulfilment. And that is how many view it today. Not Jeff Bezos. Failure is a tool. For if you are not failing, you are not trying hard enough.

In times past, inventors were celebrities. Not for some reason we call them entrepreneurs. But there is a big difference here. Most investors today are entrepreneurs but not all entrepreneurs are inventors. Bezos and space-gazing rival Elon Musk are two people that can hold their own with the likes of Thomas Edison, Marie Curie, Alexander Graham Bell.

But to invest is to fail. Over and over and over again. Let’s take a look at some of Amazon’s most glorious of failures.

• Amazon Destinations (2000): The online travel side of Amazon never gained traction against established players like Expedia. Killed after three years.

• Amazon Wine (2004): Yes, this did exist in 2004. Despite early popularity, they eventually scaled back and killed this service.

• FireOS (2007): This operating system for the Kindle had sucky apps and a bogus ecosystem. Eventually, switched to Android.

• LivingSocial (2012): Amazon acquired the daily deals website for $350M. Killed in 2018 due to losing subscriptions and competition from Groupon.

• Amazon Wallet (2014): This mobile wallet for storing gift and loyalty cards sucked and struggled to compete with Apple Pay and Google Wallet. Discontinued in less than a year.

And most famous of all, the 2004 Fire Phone. The Fire launched at a hefty price ($649), but flopped due to buggy software and lacklustre features. It cost Amazon an estimated $170 million write-down. You’d think these failures would hurt the leader of an organisation, again, not Jeff.

Bezos would say; “Failure and invention are inseparable twins. To invent you have to experiment, and if you know in advance that it's going to work, it's not an experiment”. This philosophy and experimentation is one of the reasons we have products like the Kindle, AWS and Prime today.

Amazon’s leadership principles

I know by this point of the piece you must be thinking; ‘Yes, well this is all great but how do I become a deca-billionaire and fly into outer space’. If that is in fact what you are thinking right now, then you need to study the 16 Amazon Leadership Principles.

I am not going into depth with the full list in this piece as I am writing another post; The Amazon's Leadership Principles Swipe File, for release in the next weeks (thanks Yaniv for the idea).

For reference, Amazon’s original leadership principles are as follow; customer obsession, ownership, invent and simplify, are right a lot, learn and be curious, hire and develop the best, insist on the highest standards, think big, bias for action, frugality, earn trust, dive deep, have backbone; disagree, and commit and deliver results.

Just before retiring from Amazon, Bezos added the final two; strive to be Earth’s best employer, and success and scale bring broad responsibility.

More Jeff-isms

Let’s take a look at some of the ways the mind of Jeff works and see if we can’t decode some of it. Here are some of my favourite Jeff-isms I’ve heard over time.

I love this. This is how you give people ownership, you move fast and remove cognitive load from yourself and others. You sweat the big stuff and you back each other in on the small stuff. Knowing that you can reverse if you need.

Love this also. Get really good at hiring so that you can surround yourself with A-players at all times. The easiest way to turn A-players into B-players is surround them with C-players.

During meetings at Amazon, leaders are presented with a well-written, fully formed memo on the topic at hand. No slideshows, no dot points, all narrative. It’s Bezos’ belief that this leads to much better decision making, as leaders get time to think through each argument, then debate. The research agrees. Humans are more creative when given the space to think by themselves.

I have heard Professor Scott Galloway say something similar in the past; he calls it - the deathbed test. When all is said and done, will I regret not making this decision.

Playbook

• Customer obsession. The playbook of Jeff Bezos could never start with anything other than obsessing over customers. It’s been the core of how they operate since the earliest days and continues to deliver value today.

• It’s always day one. In the very first shareholder letter in 1997, Jeff shared that it’s always day one at Amazon. Meaning you cannot rest on your laurels. You must move forward. You must innovate.

• Embrace failure. Failure is necessary to innovate. As we covered earlier, the leaders at Amazon know this. And Jeff lives by it.

• Operational excellence. With thin margins, efficiency, scalability, and continuous improvement are key. This includes everything from supply chain management to data analytics. Bezos excels here.

• Bias for Action: Bezos's leadership style is marked by swift decision-making and a bias for action. He believes in making high-quality, fast decisions and moving forward confidently.

Future

The future for Jeff has now somewhat come full circle. As a child he pined to explore space. So much so, that in his 1982 high school graduation speech, Bezos told the audience he dreamed of the day when mankind would colonise space.

Now as he approaches his 60th birthday, he gets to continue working towards that. Blue Origin is currently miles behind SpaceX in the race to capitalise space. But being second to SpaceX is no bad thing.

Jeff, his brother, and a number of other lucky spare-farers were able to joy ride their way to (sub) orbit in 2023. Who else can say that? It’s also worth noting, that thanks to Jeff, a human being can come home from their 9-5, open their laptop and book their next holiday … in space. We are living in the future. A future Jeff is creating.

Alongside space, inventing, Star Wars and dog-sledding, you can now add strength training to Jeff’s list of passions.

I don’t know about you but something about this mid-life crisis Jeff has gone through makes me smile on the inside. He seems to be passionately and uniquely himself right … and I for one am here for it.

Fun facts

• He was always lovin’ it. While Jeff was in high school, he worked at McDonald's as a short-order line cook during the breakfast shift.

• Bezos email address literally [email protected]. To this day, if you get a busted package, or your Saturday night Prime binge is buggy, you can email Jeff to let him know.

• Steve Carrell plays Jeff Bezos on Saturday Night Live. That’s right, the man that plays Michael Scott also plays our guy Jeffrey.

• Birthday in Space: While he hasn’t celebrated his birthday in space (yet), Bezos, born on January 12, shares a birthday with (me, and) HAL 9000, the AI from "2001: A Space Odyssey," according to the movie. Coincidence, we think not.

• Cameo in Star Trek: Bezos, a lifelong "Star Trek" fan, had a cameo in "Star Trek Beyond" as a Starfleet official. His extensive makeup for the role took hours to apply, and he only had a single line of dialogue.

• Relentless.com. Jeff believes so much in the idea of being relentless in business. Never stop pursuing what you want. Go ahead and type Relentless.com in your web browser … see where it takes you.

Extra reading

• The Everything Store - October 2013

• Working Backwards - February 2021

• Amazon Unbound - May 2021

• Amazon Shareholder Letters (and more)

And that’s it! You can also follow Jeff on Twitter (X) here along with Amazon and Blue Origin.

BRAIN FOOD 🧠 

I loved (!!) this conversation between Jason Fried and Lenny Rachitsky on Lenny’s Podcast. Jason is the Co-Founder and CEO of 37signals, the maker of Basecamp and HEY. They service >100k customers with <80 employees and generate 10’s of millions in profit every year.

Jason and his co-founder David Heinemeier Hansson have also authored the incredible books Remote, Getting Real, Rework and It Doesn’t Have To Be Crazy At Work. I have read all but Getting Real … incredible reads.

Why did I love this episode? Well, every time I listen to Jason or David speak (or read their writing) it totally reshapes, or reiterates how business should be done. This is a phenomenal conversation we can all learn a thing or two from.

Listen or watch it here on Apple, Spotify, and YouTube.

TOOLS WE USE 🛠️

Every week we highlight tools we actually use inside of our business and give them an honest review. Today we are highlighting Figma. I’m not a religious man, but Figma is doing the lords work. Amazing tool. Critical for our site and more so our product.

See the full set of tools we use inside of Athyna & Open Source CEO here.

HOW I CAN HELP 🥳

Here are the options I have for us to work together. If any of them are interesting to you - hit me up!

🌏 Hiring global talent: Check out my startup Athyna.
🧰 Want to outperform the competition: See our suite of tools & resources.
👀 Reach thousands of tech leaders: Advertise with us here.

And that’s it from me. See you next week. 🫡