Big Things Starts Small

Jeffrey Preston Bezos is an American Internet Entrepreneur, Media Proprietor, and Investor. He is the founder and CEO of multi-national technology company Amazon. According to the Forbes wealth index, Jeff Bezos is the first centi-billionaire and he has been the world’s richest person since 2017 and was named the “richest man in modern history” after his net worth increased to $150 billion in July 2018.

According to Forbes, Bezos is the first person in history to have a net worth exceeding $200 billion. Jeff Bezos is one of my favorite people worldwide for his relentlessness, curiosity, initiative, and sense of adventure. Jeff has a continuous improvement orientation and often finishes his letter to shareholders with “It is always Day One.”

Bezos came across the statistic that the web had been growing by more than 2,300 percent each year. He decided that he wanted to get aboard that rocket, and he came up with the idea of opening a retail store online, sort of a Sears catalogue for the digital age.

In his recently released book, Invent and Wander: The Collected Writings of Jeff Bezos, Jeff shares in his own words, the core principles and philosophy that have guided him in creating, building, and leading Amazon and Blue Origin.

Amazon, the world’s largest online retailer, has changed how we shop and what we expect of shipping and deliveries. More than half of US households are members of Amazon Prime, and Amazon delivered ten billion packages in 2018, which is two billion more than the number of people on this planet. Amazon Web Services (AWS) provides cloud computing services and applications that enable start-ups and established companies to easily create new products and services, just as the iPhone App Store opened whole new pathways for business. Amazon’s Echo has created a new market for smart home speakers, and Amazon Studios is making hit TV shows and movies.

Amazon is also poised to disrupt the health and pharmacy industries. At first, its purchase of the Whole Foods Market chain was confounding until it became apparent that the move could be a brilliant way to tie together the strands of a new Bezos business model, which involves retailing, online ordering, and superfast delivery, combined with physical outposts. Bezos is also building a private space company with the long-term goal of moving heavy industry to space, and he has become the owner of the Washington Post.

Walter Isaacson on Jeff Bezos

Walter Isaacson, Author and Biographer of Leonardo da Vinci, Benjamin Franklin, Ada Lovelace, Steve Jobs, and Albert Einstein. He was former editor of Time, a weekly news magazine.

“Jeff Bezos has never outgrown his wonder years. He retains an insatiable, childlike, and joyful curiosity about almost everything. His interest in narrative and storytelling not only comes from Amazon’s roots in the bookselling business; it is also a personal passion.”

“As a kid, Bezos read dozens of science fiction novels each summer at a local library, and he now hosts an annual retreat for writers and moviemakers. Likewise, although his interest in robotics and artificial intelligence was sparked because of Amazon, these fields have grown to become intellectual passions, and he now hosts another gathering each year that brings together experts interested in machine learning, automation, robotics, and space. He collects historical artifacts from great moments in science, exploration, and discovery. And he connects this love of the humanities and his passion for technology to his instinct for business.”

Growing Up

Grand Father

“When Jeff Bezos was a young kid—big-eared, with a booming laugh and insatiable curiosity—he spent his summers on the sprawling South Texas ranch of his maternal grandfather, Lawrence Gise, an upright but loving naval commander who had helped develop the hydrogen bomb as an assistant director of the Atomic Energy Commission.

There Jeff learned self-reliance. When a bulldozer broke, he and his grandfather built a crane to lift out the gears and fix them. Together they castrated the cattle, built windmills, laid pipe, and had long conversations about the frontiers of science, technology, and space travel. “He did all his own veterinary work,” Bezos recalls. “He would make his own needles to suture up the cattle with. He would take a piece of wire, use a blowtorch to heat it up, pound it flat, sharpen it, drill a hole through it—make a needle. Some of the cattle even survived.”

In his “We Are What We Choose” 2010 Princeton University Commencement Speech, Jeff shares an encounter with his grandparents, the need to be kind, and the power of choice:

Voracious Reader

Jeff was a voracious reader with an adventurous mind. His grandfather would take him to the library, which had a huge collection of science fiction books. Over the summers Jeff worked his way through the shelves, reading hundreds of them. Isaac Asimov and Robert Heinlein became his favorites, and later in life he would not only quote them but also occasionally invoke their rules, lessons, and lingo.

YOU GET DIFFERENT gifts in life, and one of my great gifts is my mom and dad.

Mother

His self-reliance and adventurous spirit were also instilled by Jeff’s mother, Jackie, who was just as tenacious and sharp as her father and son. She became pregnant with Jeff when she was only seventeen. “She was a high school student,” Jeff explains. “You’re probably thinking, ‘Wow in 1964 in Albuquerque, it was probably really cool to be a pregnant girl.’ No, it wasn’t. It took a lot of grit. And a lot of help from her parents. The high school actually even tried to kick her out of school. I guess they thought pregnancy might be contagious. And my grandfather being a cool and wise guy negotiated a deal with the principal that allowed her to stay and finish high school.” What was the main lesson Jeff learned from her? “You grow up with a mother like that and you have unbelievable grit,” he says.”

“His mother encouraged his love of electronics and mechanics by shuttling him to and from RadioShack and letting him turn the family garage into a science project lab. She even indulged his penchant for creating ingenious booby traps to frighten his younger brother and sister. “I was constantly booby-trapping the house with various kinds of alarms and some of them were not just audible sounds, but actually like physical booby traps,” he says. “My mom is a saint because she would drive me to RadioShack multiple times a day.

Father

Jeff’s biological father ran a bicycle store and performed in a circus unicycle troupe. He and Jackie were married only briefly. When Jeff was four, his mother remarried. Her second husband was a better match, a person who also taught Jeff the value of grit and determination: Miguel Bezos, known as Mike. He, too, was self-reliant and adventurous.

He had come to the United States at age sixteen as a refugee from Fidel Castro’s Cuba, traveling on his own and wearing a jacket his mother had sewed for him out of household rags. After he married Jackie, he adopted her lively son, who took his last name and forever after considered him his real father.

Valedictorian

  • By the time he was in high school, his family had moved to Miami. Bezos was a straight-A student, somewhat nerdy, and still completely obsessed with space exploration. He was chosen as the valedictorian of his class, and his speech was about space: how to colonize planets, build space hotels, and save our fragile planet by finding other places to do manufacturing. “Space, the final frontier, meet me there!” he concluded.”

Princeton

  • He went to Princeton with the goal of studying physics. It sounded like a smart plan until he smashed into a course on quantum mechanics. One day he and his roommate were trying to solve a particularly difficult partial differential equation, and they went to the room of another person in the class for help.
  • He stared at it for a moment, then gave them the answer. Bezos was amazed that the student had done the calculation—which took three pages of detailed algebra to explain—in his head. “That was the very moment when I realized I was never going to be a great theoretical physicist,” Bezos says. “I saw the writing on the wall, and I changed my major very quickly to electrical engineering and computer science.” It was a difficult realization. His heart had been set on becoming a physicist, but finally, he had confronted his own limits.”

Single-Mindedness

“At his Montessori preschool, Bezos was already fanatically focused. “The teacher complained to my mother that I was too task-focused and that she couldn’t get me to switch tasks, so she would have to just pick up my chair and move me,” he recalls. “And by the way, if you ask the people who work with me, that’s still probably true today.”

Childhood Heros: Thomas Edison and Walt Disney

“His childhood business heroes were Thomas Edison and Walt Disney. “I’ve always been interested in inventors and invention,” he says. Even though Edison was the more prolific inventor, Bezos came to admire Disney more because of the audacity of his vision. “It seemed to me that he had this incredible capability to create a vision that he could get a large number of people to share,” he says. “Things that Disney invented, like Disneyland, the theme parks, they were such big visions that no single individual could ever pull them off, unlike a lot of the things that Edison worked on. Walt Disney really was able to get a big team of people working in a concerted direction.”

Wall Street

After graduation Bezos went to New York to apply his computer skills to the financial industry. He ended up at a hedge fund run by David E. Shaw, which used computer algorithms to discover pricing disparities in the financial markets. Bezos took to the work with a disciplined zeal. Foreshadowing the workplace fanaticism he would later try to instill at Amazon, he kept a sleeping bag in his office in case he wanted to sleep there after a late night of work.

While working at the hedge fund in 1994,

Bezos came across the statistic that the web had been growing by more than 2,300 percent each year. He decided that he wanted to get aboard that rocket, and he came up with the idea of opening a retail store online, sort of a Sears catalogue for the digital age.

Realizing that it was prudent to start with one product, he chose books—partly because he liked them and also because they were not perishable, were a commodity, and could be bought from two big wholesale distributors. And there were more than three million titles in print—for more than a brick-and-mortar store could possibly keep on display.

The Ride

  • He and MacKenzie flew to Texas, where they borrowed a Chevrolet from Jeff’s father and began a drive that would become legendary in entrepreneurial origin tales. As MacKenzie drove, Jeff typed up a business plan and spreadsheets filled with revenue predictions.
  • You know the business plan won’t survive its first encounters with reality,” he says. “But the discipline of writing the plan forces you to think through some of the issues and to get sort of mentally comfortable in the space. Then you start to understand, if you push on this knob, this will move over here and so on. So, that’s the first step.

Regret Minimization Framework

When he told David Shaw that he wanted to leave the hedge fund to pursue this idea, Shaw took him on a two-hour walk through Central Park. “You know what, Jeff, this is a really good idea. I think you’re onto a good idea here but this would be a better idea for somebody who didn’t already have a good job.” He convinced Bezos to think about it for a couple of days before making a decision. Bezos then consulted his wife, MacKenzie, whom he had met at the hedge fund and married the year before. “You know you can count me in 100 percent, whatever you want to do,” she said.”

To make the decision, Bezos used a mental exercise that would become a famous part of his risk-calculation process. He called it a “regret minimization framework.” He would imagine what he would feel when he turned eighty and thought back to the decision. “I want to have minimized the number of regrets I have,” he explains. “I knew that when I was eighty, I was not going to regret having tried this. I was not going to regret trying to participate in this thing called the internet that I thought was going to be a really big deal. I knew that if I failed, I wouldn’t regret that, but I knew the one thing I might regret is not ever having tried. I knew that that would haunt me every day.

Initial Investment – Parent

  • When he called his father to tell him what he was doing, Mike Bezos asked, “What’s the Internet?” Or at least that’s Jeff’s romantic narrative. Mike Bezos in fact had been a user of the early online dial-up services and had a pretty good idea of what online retailing could be. Even though he and Jackie thought it was rash to leave a high-paying financial industry job for such a lark, they took much of their life savings—$100,000 at first, then more—and agreed to invest. “The initial start-up capital came primarily from my parents, and they invested a large fraction of their life savings in what became Amazon.com,” Bezos says. “That was a very bold and trusting thing for them to do.
  • Mike Bezos admitted that he never understood either the concept or the business plan. “He was making a bet on his son, as was my mother,” Jeff says. “I told them that I thought there was a 70 percent chance that they would lose their whole investment.… I thought I was giving myself triple the normal odds, because really, if you look at the odds of a start-up company succeeding at all, it’s only about 10 percent. Here I was, giving myself a 30 percent chance.” As his mother, Jackie, later said,

“We didn’t invest in Amazon, we invested in Jeff.” They eventually put in more money, ended up owning 6 percent of the company, and used their wealth to become very active and creative philanthropists focused on providing early-childhood learning opportunities for all children.”

Early Beginning

  • Jeff and MacKenzie initially set up the company in the two-bedroom home they rented near Seattle. “They converted the garage into a work space and brought in three Sun workstations,” Josh Quittner later wrote in Time. “Extension cords snaked from every available outlet in the house to the garage, and a black hole gaped through the ceiling—this was where a potbellied stove had been ripped out to make more room. To save money, Bezos went to Home Depot and bought three wooden doors.
  • Using angle brackets and 2-by-4s, he hammered together three desks, at a cost of $60 each.

Amazon.com

  • Amazon.com went live on July 16, 1995. Bezos and his small team rigged up a bell to chime whenever they got a sale, but it very quickly needed to be disabled, as rushes of orders came in. In the first month, with no real marketing or publicity plan other than asking friends to spread the word, Amazon scored sales in all fifty states nd in forty-five countries.
  • “Within the first few days, I knew this was going to be huge,” Bezos told Time. “It was obvious that we were onto something much bigger than we ever dared to hope.”

Long Term Game

  • Bezos succeeded by keeping his eye on the long game, foregoing profits for growth, and being relentless and sometimes ruthless with competitors and even his own colleagues. At one point during the dot.com meltdown, he and a few other internet entrepreneurs were on an NBC Nightly News special with Tom Brokaw.
  • “Mr. Bezos, can you even spell ‘profit’?” Brokaw asked, highlighting the fact that Amazon was hemorrhaging money as it grew. “Sure,” Bezos replied, “P-R-O-P-H-E-T.” And by 2019 Amazon stock would be at $2,000 a share, and the company would have $233 billion in revenues and 647,000 employees worldwide.

Space Travel – Blue Origin

The earth is finite, and if the world economy and population is to keep expanding, space is the only way to go.

  • Outside Amazon, Bezos’s greatest enthusiasm, one nurtured since childhood, is space travel. In 2000 he set up a company, very secretively, near Seattle called Blue Origin, naming it after the pale blue planet where humans originated. He called upon one of his favorite science fiction writers, Neal Stephenson, to be an advisor. They kicked around wildly novel ideas, such as using a bullwhip-like device to propel objects into space.
  • Eventually, Bezos focused on reusable rockets. “How is the situation in the year 2000 different from 1960?” he asked. “The engines can be somewhat better, but they’re still chemical rocket engines. What’s different is computer sensors, cameras, software. Being able to land vertically is the kind of problem that can be addressed by those technologies that existed in 2000 that didn’t exist in 1960.
  • This is the most important work I’m doing, and I have great conviction about that,” he says. Earth is finite, and energy usage has grown so much that it will soon, he thinks, strain the resources of our small planet. That will leave us with a choice: accept static growth for humanity or explore and expand to places beyond Earth.
  • “I want my grandchildren’s grandchildren to be using way more energy per capita than I am,” he says. “And I would like to see us not have a population cap. I wish there were a trillion humans in the solar system; then there would be a thousand Einsteins and a thousand Mozarts.” But within a century, he fears, the Earth will not be able to sustain this growth of population and energy use. “So, what will that lead to? It will lead to stasis. I don’t even think stasis is compatible with liberty.” That prompted him to believe we should now begin thinking about new frontiers. “We can fix that problem,” he says, by lowering the cost of access to space and using in-space resources.”

All the Best in your quest to get better. Don’t Settle: Live with Passion.

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