Today, Jeff Bezos is a household name in North America, but Amazon is a household name in the world. Amazon will turn 25 on July 5, 2019. But as the stories of all big companies go, Amazon did not do great in the beginning. In fact, it never saw any major profits for a very long time.
Despite all this, what really made Amazon the Behemoth it is today? For starters, here is a spoiler: “It was mostly a one-man show”.
The Beginning of Amazon
Amazon started its journey in a garage, like most other great tech-firms did. Yes, that is no big surprise to us. Most people also know that Amazon was initially created for just retailing books online. But Jeff knew from the beginning that Amazon had to be an “everything” store. Interesting, isn’t it?
Initially, Bezos financed Amazon with 10,000 dollars from his own pocket. These days, you could enter a “Cash Money” kiosk and walk out with this amount as a payday loan, but it was quite an amount in 1994. He also personally went to post offices to deliver books to people who placed the orders.
After 3 years, Amazon made no major profits, but still went public. Market analysts and experts shunned this move and believed that Amazon would never make it big. They thought that it was no match for book retailers like Barnes and Nobles and that Amazon would fail and shut down its operations someday in the near future.
The Road Not Taken
Bezos did not believe in what everyone told him about Amazon. He knew what it was and he visioned it as something else. Amazon launched its music sales in June 1998. The rest was history. Later on, it opened its third-party marketplace and finally became an ‘everything’ retailer.
However, ‘retail’ was a word that was a turn-off for many investors and shareholders. Bezos had a new vision for Amazon now and he wanted it to be a tech company. That led to the launch of Amazon Web Services in 2003.
The Acquisition Spree
After that, Bezos went on an acquisition spree. If there were competitors to his business, he just bought them. Today, many people would say that they do not like Amazon’s behaviour in this regard, but for Bezos, that is nothing new. The tech giant’s first acquisition was Bookpages in 1998.
If you can’t beat them, buy them.
This is one of the most common principles that businessmen of large firms or umbrella companies followed in the 20th century. Needless to say, this practice has moved well into the 21st century. Some market analysts argue that this acquisition spree could result in a monopoly, especially in the e-commerce market. Statistically, Amazon is already there, though there are a few more firms trying to compete with it.
Over the years, Amazon has acquired almost 100 smaller firms, but the best valued acquisitions are Whole Foods, Zappos, Ring, Twitch Interactive and Kiva Systems. Till date, these were the best firms that were Amazon’d.
The Amazon Culture
Some of my friends and acquaintances who worked for Amazon could never stop blurting about how amazing it is to work there. But this was not how it was when Jeff Bezos single-handedly ran Amazon by himself. Initially, he wanted employees to work 60 hours a week, so much that one of his early employees forgot about his car that was parked near an apartment because he biked to work early morning and returned home late night. A few months later, he opened his mail box to find some parking tickets, notice that his car was towed, and a couple of notices from the towing company, before being notified that his car was sold at an auction.
Bezos was also known to be ‘blunt’ to his employees and snubbed them off when he didn’t like something they did or had conflicting opinions.
Later on, he hired human resource personnel and leadership experts to shape him into a better leader. Today, Amazon has one of the largest workforces in the world and pays a minimum wage of $15 per hour in the USA. That’s not great, but still better than what most other corporate firms pay in the USA.
I have seen job posting where Amazon hires Human Resource personnel under the job title ‘HR Partner’. This implies how much it values its employees now. Amazon has opted the transformational leadership strategy in the past decade and it looks like it is working well.
How Did Amazon Survive?
Initially, Amazon was regarded as one of those ‘dot com fever’ startups that would never make it big. In fact, Amazon was there when the dot com crash happened, forcing many internet businesses to go out of business permanently. Amazon had to do some downsizing, but it survived.
The idea of developing Amazon into a tech firm attracted more investors and changed the perspective entirely. Now, Amazon does not fight to survive anymore; it thrives on its success. However, it has given the other e-commerce firms a run for their money because most of its profits are still being generated by e-commerce.
If you are reading this and either have an Amazon Prime subscription, an Echo device, a Fire device or even bought something for less than 10 dollars on Amazon.com, chances are that Amazon has already got to you.
Learning from the above, it is not difficult to comprehend that Amazon was nothing other than an average, garage startup that began with a passion. But despite all this, there was just one thing that kept it going — and that was perseverance.