- Jeff Bezos had a clear vision for Amazon.com from the start.
- He saw the innovative potential of the online marketplace.
- Bezos explains why books, in particular, make for a perfect item to sell on the internet.
A number of the billionaires of today made their money by having foresight while the web was still in its infancy. None were more successful that Jeff Bezos, the founder of Amazon.com and now the richest man in the world (at least until his divorce goes through).
In a 1997 interview, the year when he first became a million by raising $54 million from Amazon’s IPO, Bezos relates the story of how he came up with the idea for the online juggernaut. He was in New York City in 1994, working for a qualitative hedge fund, when he came across the “startling” statistic that “web usage was growing at 2,300 percent a year”. This inspired him to look for a business plan that would “make sense in the context of that growth.”
After making a list of 20 different products to sell online, he picked books as the best one to orient the business around. Why books? Because unlike other products, there are “more items in the book category than any other category by far.”
“Attention is the scare commodity of the late 20th century,” says Bezos.
He compared books to music, the number two best item for the web. Bezos pointed out that at any given time there are 200,000 CDs “active” worldwide (let’s not forget this is 1997). But at that same time, there are 3 million books “active in the book space” in different languages, with more than 1.5 million in English alone. Seems like a no brainer.
The genius of recognizing the unique potential of an online bookstore that Bezos says “couldn’t exist any other way” was complimented by Jeff’s vision in how to actually make such a store work. His company only kept an inventory of a couple of bestselling thousand books while having access to 400,000 others from an electronic network of wholesale distributors. These “almost in time” titles would be available within a day. Amazon also made a deal with another 20,000 publishers to have access to another 1.1 million titles, which would take a couple of weeks to get. They also thought of how to connect to a million out-of-print titles by connecting with appropriate dealers.
The Amazon founder also explained how his company would continue to capture people’s attention amid the glut of information. His secret – doing something “new and innovative,” creating an online business the likes of which did not exist, that “actually has real value for the customer”. Doing that creates marketing opportunities from newspapers and generates “huge” positive word of mouth that helps grow the business. In the first year, all growth for Amazon was fueled by word of mouth and media exposure – not ads. In fact, as far as ads, he expressed a preference for online ads versus traditional paper ones since the digital ones are much easier to track and quantify. He called it a marketing “Nirvana.”
“What’s really incredible about this is that this is day one. This is the very beginning. This is the Kitty Hawk stag e of electronic commerce,” said Bezos.
In the end of the interview, Bezos also made a prediction for a millennium from now, saying that we’re going to find out that “people will look back and say the late 20th century was a great time to be alive on this planet.”
Check out the full interview here:
Jeff Bezos 1997 Interview
This is an interview with Jeff Bezos – the founder of Amazon in 1997. It is very clear that Jeff is already on the right track in 1997 (three years after the…
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Source: “Amazon Products” – Google News