WHERE do you start with Jeff Bezos? American founder of Amazon, a
button-bright bald geek, with a Gatling gun laugh and easy sense of humour,
he is virtually the last of the 1990s tech pioneers still at the helm of his
ship and probably the funniest billionaire you could ever hang out with.
“Hey, how you doing?” he says, swinging through the door at Amazon’s UK
headquarters in Slough. Short and lithe, he is in jeans, blazer and scruffy
suede shoes, and already grinning, as if in anticipation of a laugh.
The last time we met, over lunch five years ago, I watched him chase a walnut
round his plate with a fork while explaining that success is about being
stubborn and meticulous.
For the next course, he carefully lemon-juiced both sides of his grilled fish.
But mostly he cracked jokes and laughed.
Bezos, 43, is a charmer with a resilient streak much deeper than most would
imagine, son of a teen mum with a dad he barely knew – he took his
stepfather’s name.
Now, he is one of the most successful businessmen on the planet, with an
estimated personal wealth of $9 billion (£4.3 billion) – so wealthy that he
is pouring money into his own space project, one of a number racing to take
tourists further than they have ever been before. Maybe he wants to go to
the moon. But first, let’s talk about Amazon.
Bezos is over here to publicise the preChristmas launch of Amazon Prime, part
of his business’s expansion as it aims to provide all you could want from
internet shopping. For £49-a-year membership, you get free next-day delivery
on any item you buy on Amazon – however big, however many.
It’s already a success in America and Japan, according to Bezos, and now he is
rolling it out in Britain. He ticks off the plus points: “Unlimited one-day
shipping, no order threshold – all you can eat. In America it’s two days
guaranteed delivery, costs $79. Here, the service level is higher.”
The move is typical Bezos, expensive for Amazon – imagine how canny consumers
can cover that £49 by regular big orders – but with long-term benefits as it
encourages “cross-shopping” through the site. In Britain Amazon has 20
different “stores” (categories of goods), in America many more, including
digital downloads. Those Amazon buyers who just stick to books, DVDs or
electronics, will be tempted to look further.
“Yeah, they start experimenting,” beams Bezos, excited at the very thought. In
America he is already shipping groceries – nonperishable dried goods – but
eventually, he says, Amazon should sell everything.
Taking on the supermarkets? Why not, he grins, there is room for everyone. As
more people log on to broadband, internet shopping is really taking off.
Only cheap and bulky goods won’t make commercial sense. “We don’t sell
brooms but have a booming business in vacuum cleaners.”
Christmas is also boom-time for Amazon – over a third of sales – hence the
verve. Because right now, after years of being told that Amazon would crash
and burn, Bezos is in a good place. He has healthy figures to brandish and a
tightening grip on the world’s shoppers. Amazon’s net sales leapt to $10.7
billion last year, up 26%. This year the growth rate is faster, and profits
are up.
But there have been bad times, first when analysts predicted Amazon was toast
in 2000, then when investors grumbled, wanting more focus, less costs and
any kind of profit for their years of investment. They were uneasy at the
amount of money Bezos kept pumping into innovation, and how fast the
competition could squeeze Amazon out, as lowest-price searches became
ever-easier.
Since then, Bezos has hired big-company executives and concentrated on the
numbers. Better figures have sent Amazon shares soaring, doubling in value
from last year, and topping $100 last month. But don’t expect him to admit
he was wrong. He doesn’t do anything just for investors, he says. He always
puts customers first.
Like his idea of letting other companies sell secondhand goods next to new
ones on Amazon. Even his own staff thought he was mad, cannibalising his
firm’s sales. But it brings more customers through the site, and Amazon
makes money from commission on every sale. He is Mr Long Term, building
customer trust and Amazon’s ease of use, and investors just have to lump it.
“We are working on the cost structure, and every year it’s better,” he says,
“but we are crystal clear about who we are and how we operate. People can
opt in if they like our approach. If not, well, they have lots of other
options.”
Then he adds: “We are very comfortable being misunderstood. That’s a core
competence – hahaha.” At times, that infectious laugh is almost like a
nervous tic.
But he is a hard man to dislike, alert as a lemur, eyes always on the lookout
for the next joke, but deadly serious about his business and very
media-savvy. A one-time banker and computer studies boffin, Bezos is
surprisingly comfortable in the spotlight. Little wonder that in America he
is dubbed “Oprah’s favourite billionaire”.
You can see, too, why some on Wall Street found Bezos’s confidence hard to
take when results were not sparkling. He still gets flak for the new areas
Amazon is pushing into – more recently, business-to-business services
offering web know-how and capacity to other firms.
“Look, every time we do something new we get criticised,” he shrugs. “It’s
fine. The corollorary is you rarely get criticised for acts of omission, yet
the biggest mistakes companies make are what they should have done and
failed to do.”
As for web services and storage, “it’s all part of the infrastructure we
needed to support our own webskill application,” he says. “So long as we are
building it for ourselves, why not externalise it? And it’s a significant
business opportunity for us.”
How significant? “We don’t disclose revenue.” Why not? Momentarily he is
stumped. “Turn the question round. Why should we? The people who would
benefit most are our competitors.”
But it’s not a consumer business? He makes a face that hardens, and just for a
second that stubbornness is there. Those who have worked with Bezos say he
has a side that the media rarely sees.
“The thing that doesn’t come off in public is that Jeff’s very hard-core,” one
colleague told an American magazine recently. “There are fun moments in the
four-hour meetings, but they aren’t fun meetings. If someone comes in
without the numbers, it can get ugly pretty quickly.”
Bezos ascribes some of his drive to his upbringing. He was born in New Mexico
and was four when his mother remarried, with a Cuban-born engineer, and his
father dropped out of his life.
He has never contacted him since. He says he has no idea if his dad is dead or
alive – odd, for a man whose curiosity is such a wellspring. “You’re right,
in other ways I am very curious, but I don’t want to know.”
The biggest influence on his life was his mum’s father, a ranch owner and
former regional director of the US Atomic Energy Commission. He taught Bezos
confidence and self-reliance. “He was always completely unfazed by doing
anything, rebuilding a bulldozer, whatever. It’s a state of mind.”
Bezos took that into business, working in computer science on Wall Street.
When he saw internet penetration growing, he sniffed opportunity. “Growing
2,300% a year – I’d never heard of anything growing like that, and I started
thinking of a business plan that would make sense.”
By 1994, he had set up Amazon in Seattle, plumping for books “because you
could build a complete selection bigger than the physical stores”. He is
rigorously analytical like that.
And now, as if expanding Amazon isn’t enough, he is already looking for other
challenges. He is pumping money into a new company, Blue Origin, that will
take passengers into outer space. Why?
“I am just very interested in it. You don’t choose your passions, they choose
you, and I have been passionate about space since I was a five-year-old,
when Neil Armstrong walked on the moon.”
The company – whose motto gradatim ferociter translates as “step
by step, courageously” – is building “a vertical take-off and
landing suborbital vehicle” that will take passengers into space to
experience weightlessness. Flights may begin in 2010.
And then? Bezos is cagey about future plans, other than affirming that he has
a “brilliant team of engineers” and that it’s very different work to what is
done at Amazon. No kidding. Some suggest he is fascinated by the possibility
of pushing life beyond Earth.
How much money has he spent? “We don’t say.” Then he laughs, “Hey, you didn’t
expect to catch me with that one. I’m not that jet-lagged, hahaha.”
Rivals estimate Blue Origin has gobbled up at least $500m so far. And it may
not all be about boyhood dreams. Getting satellites into space, and using
satellites for a variety of purposes, is increasingly vital for business.
Bezos may be in there early.
Anyway, our time is up; he has a mass gathering of British staff to address.
Will he go on heading Amazon for another decade? Characteristically he gives
me the long answer. Here’s the edited version: “Look, I am a change junkie
and I love the rate of change in this business. We have a great team and we
all want to be doing pioneering work. We like exploring dark alleys. And
just occasionally we go down one of these alleys and it broadens into a wide
vista and we find something really exciting. Now, that makes it all
worthwhile.”
I’ll take it he means “yes”. He grins and nods his bald head enthusiastically.
And with another laugh, he’s gone.
JEFF BEZOS’S WORKING DAY
THE Amazon founder wakes at home on Seattle’s Lake Washington – just along
from Bill Gates – after 7am. “I am a religious exerciser,” says Jeff Bezos.
“I walk on a treadmill at a steep incline so I can read the papers.”
Before 9am he is driving the 20 minutes to Amazon’s converted hospital base on
a hill overlooking the city. “Then I move around a lot. I don’t like staying
in my office. Mostly I go to meetings.”
He has 12 senior executives reporting directly to him, the S team, which meets
once a week for four hours. He works until 7pm, and then returns to his
family.
VITAL STATISTICS
Born:January 12, 1964
Marital status:married, with three sons and one daughter
School:Miami Palmetto
University:Princeton
First job:ranch hand, working for his grandfather
Salary package:$88,000 plus more than $1m in bonuses
Homes:Seattle, Los Angeles
Car:gold Toyota minivan
Favourite book:The Remains of The Day, by Kazuo Ishiguro
Favourite music:Feist
Favourite film:Dr Strangelove
Favourite gadget:Toy Stirling engine powered by espresso maker
Last holiday:Aspen
DOWNTIME
JEFF BEZOS relaxes by going to the cinema, or out to dinner with his wife. “I
also read a lot. I’ve got lots of books but they are not organised to the
degree that I have a library. I’m not a collector. I don’t have that gene.”
He also takes three days off every quarter to retreat by himself to a hotel
and just think. “I read a bunch of stuff, surf the internet, camp out.
Sometimes people recognise me at breakfast and say hi.”
Most of his money is spent on his Blue Origin space project. When his children
are older – he has four kids under eight – he wants to take longer, more
exotic holidays.
