#jeff bezos

Jeff Bezos in his annual shareholder letter:

Failure comes part and parcel with invention. It’s not optional. We understand that and believe in failing early and iterating until we get it right. When this process works, it means our failures are relatively small in size (most experiments can start small), and when we hit on something that is really working for customers, we double-down on it with hopes to turn it into an even bigger success. However, it’s not always as clean as that. Inventing is messy, and over time, it’s certain that we’ll fail at some big bets too.

Always a good read.

J.J. McCorvey:

So is Amazon Freight Services Bezos’s next mission? When I ask, the laugh lines vanish from his face as if someone flipped a switch on his back. He contends that same-day delivery is too expensive outside of urban markets and that it only makes sense for Amazon to deliver its own products within the Fresh program. In China, he explains, Amazon does in fact deliver products via many couriers and bicycle messengers. “But in a country like the United States,” he says, “we have such a sophisticated last-mile delivery system that it makes more sense for Amazon to use that system to reach its customers in a rapid and accurate way.” When I ask whether he would consider, say, buying UPS, with its 90,000 trucks—or even more radically, purchasing the foundering USPS, with its 213,000 vehicles running daily through America’s cities and towns—Bezos scoffs. But he won’t precisely say no.

Look, you should wake up worried, terrified every morning. But don’t be worried about our competitors, because they’re never going to send us any money anyway. Let’s be worried about our customers and stay heads-down focused.
Jeff Bezos, just after the burst of the Internet bubble, to his then 150 employees facing increased competition from Barnes & Noble with its 30,000 employees.  

David Streitfeld and Christine Haughney on Jeff Bezos:

But then, few newsrooms have ever been confronted with a new owner whose zeal for disruption is matched by his obsession with tinkering until he gets it right. As Steve Yegge, a former employee, once put it, “He just makes ordinary control freaks look like stoned hippies.” A relevant fact: Mr. Bezos originally thought of naming Amazon “Relentless.”

Mr. Marcus, now the executive editor of Harper’s Magazine, said it all made sense, kind of: “Bezos is fascinated by broken business models. And whatever else you think of newspapers, the business model is broken.”

They did $16 million in sales and lost $5 million last year, so they’re more of a threat to their stockholders.

David Unowsky, owner of Hungry Mind Bookstore, who spoke to Jim Romenesko in 1997 for a profile on Amazon’s Jeff Bezos. 

Romensko dug up the entire article, entitled: THE HEIGHT OF ONLINE SUCCESS//TINY AMAZON.COM SQUARES OFF AGAINST INDUSTRY GIANT BARNES & NOBLE. (It wasn’t online, so Pioneer Press staffers had to pull it up from their own archives.)

It’s so full of win. Amazon had just gone public (in the thick of the dot-com bubble) and Barnes & Noble was just entering the web and everyone seemed sure they would crush Amazon. It’s something important for every entreprenuer to remember every time they hear “but what if XXXXX enters your business”?

Hungry Mind Bookstore, meanwhile, went out of business in 2004, as Romenesko notes. Yet the notion of Amazon as a “threat” to stockholders endures 16 years later. 

[via @carr2n]

I’m not comfortable discussing the contents of that meeting.

Russell Grandinetti, Amazon’s vice president for Kindle content, in federal court when asked about a meeting that took place at Jeff Bezos’ Seattle boathouse on Sunday Jan. 24, 2010. 

That was a few days before the initial iPad announcement — where, of course, iBooks was also unveiled, kicking off the eBooks situation for which Apple is now on trial.

One important thing noted by Philip Elmer-DeWitt:

Several readers have asked how a witness under oath could get away with not answering a direct question. You’d be amazed at how much evidence in this case has been redacted because it contained trade secrets, business data, privileged conversations with attorneys etc.. Apparently Apple’s lawyer had been told in advance that there were Amazon lawyers present at the meeting in the boathouse, and he backed off as soon as Grandinetti declined to discuss what was said there.

If Grandinetti won’t talk about it because lawyers were present in the boathouse, that’s just about the worst way possible to phrase that.

Mark Gimein for Bloomberg:

Comparing Bezos’s fortune to Amazon’s earnings highlights how deeply puzzling that increase has been. Since 2003, the first year in which Amazon earned a profit, through the end of 2011, Amazon has reported a total of $5 billion in earnings. Amazon has not yet reported results for this year; it lost money in the last quarter, but is expected to turn a profit for the year.

Think of it this way: if Bezos had started the company himself, still owned all of it, and had taken out every penny in profit, his bank balance would be less than one-quarter of what his shares are worth. Or think of it another way: Apple’s profit for the last quarter alone is well over twice Amazon’s profit over its entire entire existence.

It’s crazy, but Amazon appears to be “gaming” Wall Street by not being extremely profitable. There really is nowhere to go but up. The sky is still the limit. As opposed to Apple, which has earned more money in the past year than any company ever save one: Exxon. If the sky is the limit, they’re almost in outer space.

Adam Lashinsky for Fortune:

Then, around 2007, Amazon’s investments began to bear fruit, and investors were delighted. The stock is up 10-fold in the past six years. “We believe in the long term, but the long term also has to come,” says Bezos, explaining that periodically Amazon wants to “check in” with its ability to make money. Thus, in 2007, Amazon more than doubled its profit, to $476 million, on a 38% increase in sales to almost $15 billion.

This one paragraph is perhaps the best way to understand Amazon’s endgame. They’re laying the foundation to make money, but only do so right now to prove the model and then go right back to building.

But 2007 was five years ago. It’s a very different world and Amazon is attempting to play many different games. I think we’ll have to see if the profit switch will be as easy to flick sooner rather than later.