Last night, a couple of us at futurethink attended “A Chat with Jeff Bezos” at NYU’s Stern School of Business (my alma mater). The event was a Q&A discussion between Jeff (founder, President, and CEO of Amazon), and Kevin Maney (Contributing Editor at Condé Nast Portfolio Magazine).
It was pretty exciting to see the man who runs one of my all-time favorite companies up close. He spoke (somewhat) candidly about the history of Amazon – how the idea came to him and the changes he made in his life to make it happen. He was a little less forthcoming with some of the finer details of Amazon’s businesses, due to the upcoming release of Q12008 numbers. All in all, it was a great discussion. Here are some of my favorite tidbits:
- Amazon is named after the Amazon river, the largest river in the world. It was founded with the goal of being the largest retailer in the world. It’s original name, Cadabra, was trashed because it sounded too much like “Cadaver,” which isn’t so pleasant.
- Most everything Amazon does is with the customer in mind. Bezos has a firm belief that, in the long term, shareholder value and customer value are perfectly aligned. As such, he tries not to let short-term-focused Wall Streeters shape too much of what the company does and doesn’t do.
- “It’s not an experiment if you know it’s going to work.” This was one of my favorite quotes from his talk. Amazon has been lucky to have a lot of experiments work out in the end. Basically, each category of products it adds to its store is an experiment. Some have been more successful than others, but Bezos was sure to point out that many “breakthroughs” took years and years of slow growth and planning to successfully launch. He also mentioned the importance of balancing these riskier, breakthrough projects with smaller, incremental innovations that keep customers excited, loyal, and happy. One “failed” experiment – A9, an Amazon search engine. The company licensed Google’s search algorithm and worked hard to create a new user interface, thinking it would catch on. It didn’t. But that’s okay. Other experiments – Amazon Prime or the Kindle, for example, have done very well.
- Amazon Prime is a particularly interesting story. I was a member for about a year, then I gave it up. The service simply charges customers a flat fee of $79 per year in exchange for unlimited 2-day shipping. Bezos knew that those customers who already tended to pay extra for 2-day shipping would love it, but wasn’t sure if those who used Amazon’s free Super Saver Shipping (5-7 days) would pick up on it. Apparently they have, which I found somewhat surprising. I abandoned the service because I tend to get my Amazon orders in 2 or 3 days even with Super Saver Shipping. Apparently that’s somewhat unique to NYC.
- The Kindle is another great story. The device has sold far better than anyone expected, and has basically been out of stock since the day it launched late last year. It was three years in the making, and the goal was to really innovate the book, something that hasn’t really been reinvented in the 500 years since Gutenberg’s original printing press. Bezos was quick to admit that anything that’s resisted change and innovation for 500 years is probably pretty hard to change. So he sat down with his team and went over some of the essential characteristics of a book that people wouldn’t be able to live without. One of those characteristics was the fact that books “disappear.” Their form isn’t all that important – readers like to get lost in the words and enter the world that an author has created for them. The device, then, had to fall into the background. It couldn’t weigh a lot, and it shouldn’t be so overdesigned as to overpower the words on the “page.” The Kindle accomplishes this – it weighs less than a standard paperback, and isn’t really much to look at. There’s a lot more we could say about the Kindle, but I’ll leave that for another post.
- Bezos was then asked about risk, and how he manages to undertake so many experiments without getting hit too hard by Wall Street and his shareholders. His answer was a great one: “Companies are rarely criticized for the things they fail to try; but they’re often criticized for the things they try that fail.” A great quote, for sure, and surprisingly spoken in a very casual, unrehearsed talk.
So there we have it. Some sage advice from the likes of one of today’s most successful Internet entrepreneurs.
Update: Bloomberg News has additional coverage of the event here.