Bezos Interview: why Amazon started with books

[fjtorres]

...and other anecdotes...

http://www.businessinsider.com/jeff-...on-post-2018-4

Döpfner: Did she, being an author, suggest that you focus on the book business at the beginning?

Bezos: No, I picked books. It is true that she's a big reader and I'm a big reader. But that's not why I picked books. I picked books because there were more items in the book category than in any other category. And so you could build universal selection. There were 3 million in 1994 when I was pulling this idea together — 3 million different books active in print at any given time. The largest physical bookstores only had about 150,000 different titles. And so I could see how you could make a bookstore online with universal selection. Every book ever printed, even the out-of-print ones was the original vision for the company. So that's why books.

He waxes philosophical a couple of times:

I think the great thing about humans in general is we're always improving things. And so if entrepreneurs and inventors follow their curiosity and they follow their passions, and they figure something out and they figure out how to make it. And they're never satisfied. You need to harness that. In my view, you need to harness that energy primarily on your customers instead of on your competitors. I sometimes see companies - even young, small startup companies or entrepreneurs who arrived — is that they start to pay more attention to their competition than they do to their customers. And I think that in big mature industries, that can or might be a winning approach that some cases they kind of close follow. They let other people be the pioneers and, you know, go down the blind alleys. There are many things that a new, inventive company tries that won't work. And those mistakes and errors and failures do cost real money.

And so maybe in a mature industry where growth rates are slow and change is very slow, but, as you see in the world more and more, there aren't that many mature industries. Change is happening everywhere. You know, we see it in the automobile industry with self-driving cars, but you can go right down the line of every industry and see it.

Döpfner: But Amazon had serious crises. You went almost bankrupt. What went wrong?

Bezos: We had so many; there have been so many. I haven't had any existential crises — knock on wood — I don't want to jinx anything. But we've had a lot of dramatic events. I remember, early on, we only had 125 employees, when Barnes & Noble, the big United States bookseller, opened their online website to compete against us, barnesandnoble.com. We'd had about a two-year window. We opened in 1995; they opened in 1997. And at that time all of the headlines — and the funniest were about how we were about to be destroyed by this much larger company. We had 125 employees and $60 million a year in annual sales — $60 million with an "M." And Barnes & Noble at that time had 30,000 employees and about $3 billion in sales. So they were giant; we were tiny. And we had limited resources, and the headlines were very negative about Amazon. The one that was most memorable was just "Amazon. toast." [Laughs]

And so I called an all-hands meeting, which was not hard to do with just 125 people. We got in a room, and because it was so scary for all of us, this idea that now we finally had a big competitor. That literally everybody's parents were calling and saying, "Are you OK?" It's usually the moms calling and asking their children are you going to be OK? So, and I said, "Look, you know, it's OK to be afraid, but don't be afraid of our competitors, because they're never going to send us any money. Be afraid of our customers. And if we just stay focused on them, instead of obsessing over this big competitor that we just got, we'll be fine." And I really do believe that. I think that if you stay focused and the more drama there is and everything else, no matter what the drama is. Whatever the actionable distraction is, your response to it should be to double down on the customer. Satisfy them. And not just satisfy them — delight them.

And this:

Döpfner: Last week we had Bill Gates for dinner here and he said in a self-ironic manner that he has a ridiculous amount of money and it is so hard to find appropriate ways to spend that money reasonably and to do good with the money. So what does money mean for you, being the first person in history who has a net worth of a three-digit amount of billions.

Bezos: The only way that I can see to deploy this much financial resource is by converting my Amazon winnings into space travel. That is basically it. Blue Origin is expensive enough to be able to use that fortune. I am liquidating about $1 billion a year of Amazon stock to fund Blue Origin. And I plan to continue to do that for a long time. Because you're right, you're not going to spend it on a second dinner out. That's not what we are talking about. I am very lucky that I feel like I have a mission-driven purpose with Blue Origin that is, I think, incredibly important for civilization long term. And I am going to use my financial lottery winnings from Amazon to fund that.

And this:

So, in a natural state, where we're animals, we're only using 100 watts. In our actual developed-world state, we're using 11,000 watts. And it's growing. For a century or more, it's been compounding at a few percent a year, our energy usage as a civilization.

Now if you take baseline energy usage globally across the whole world and compound it at just a few percent a year for just a few hundred years, you have to cover the entire surface of the Earth in solar cells. That's the real energy crisis. And it's happening soon. And by soon, I mean within just a few 100 years. We don't actually have that much time. So what can you do? Well, you can have a life of stasis, where you cap how much energy we get to use. You have to work only on efficiency. By the way, we've always been working on energy efficiency, and still we grow our energy usage. It's not like we have been squandering energy. We have been getting better at using it with every passing decade. So, stasis would be very bad, I think.

Now take the scenario, where you move out into the solar system. The solar system can easily support a trillion humans. And if we had a trillion humans, we would have a thousand Einsteins and a thousand Mozarts and unlimited, for all practical purposes, resources and solar power unlimited for all practical purposes. That's the world that I want my great-grandchildren's great-grandchildren to live in.

He's a space cadet!

Lots of other stuff.

Highly recommended.

Video and transcript.

[GlenBarrington]

I know this was designed to make him look good, but I found Bezos quite likable in this article. I didn't expect that, as I am somewhat cynical when it comes to people.

[pwalker8]

Originally Posted by GlenBarrington

I know this was designed to make him look good, but I found Bezos quite likable in this article. I didn't expect that, as I am somewhat cynical when it comes to people.

I can't read the article because it doesn't like ad blockers and I'm not about to shutdown my ad blocker.

Puff pieces about big name CEO's is a staple of these type of magazines. I've read such pieces about Steve Jobs and Bill Gates as well. Neither were exactly well known as people you particularly wanted to work for.

[fjtorres]

Originally Posted by GlenBarrington

I know this was designed to make him look good, but I found Bezos quite likable in this article. I didn't expect that, as I am somewhat cynical when it comes to people.

His wife likes him.

To be big time successful in business you need to be able to switch from your normal private persona to a ruthless executive persona. Big business isn't a place for touchie-feelie nice guys.

The trick is knowing when to switch hats.
Of course, some guys never switch or don't have a nice guy side.

Most executive interviews are promotional efforts to highlight a specific product or initiative. This one is more about countering bad press than salesmanship. That's why there was all the talk about critics with agendas.

But buried in between the "selling Mr Bezos" are a few reminders of the true history of Amazon. Like the fact that the company was built off one insight: Ingram had a catalog of every book in print, over 3 million titles, yet no physical store could stock even ten percent. More, Ingram could deliver those books within a day or two yet no bookstore offered better than multi-week waits on "special orders". Presumably because they would rather move their in-store inventory than act as a mail-order front.

Anybody could do what he did, if only they thought of it.
In fact, Amazon wasn't the only one who did it.
Buy.com and B&N did it, too, to name just two.

Amazon just did it better.

Note that in the anecdote about packing tables, Bezos points out that most of his earliest employees were techie coders. That might have a bit to do with their quick and fast success. To sell online you need the best website you can possibly build, yet none of their competitors have done that, much less build one better than Amazon.

(Mostly irrelevant anecdote: yesterday I went to WalMart.com looking for a specific model of a product. The search engine coughed up three links as in stock. All three led to the exact same third party vendor and the same SKU. Click on one. Listed as in stock. Put it in cart. Go to cart to see what the tax and shipping charge is. I'm logged in to my account. Still need to enter the zip code. And: Oh, sorry. It's not really in stock. No idea when it will be. Ten minutes wasted. I've bought stuff from them but it is always a last resort and it is always a pain.)

It's not as if Amazon is even close to perfect. Anybody here can easily name three ways they could improve book discovery and sales using techniques music and video distributors use. But nobody else uses them either.

Big business is a tough activity to succeed in, but a lot of these big business successes are simply gifted with singularly inept competitors. They're the one-eyed in the land of the blind.

[pwalker8]

Originally Posted by fjtorres

His wife likes him.

To be big time successful in business you need to be able to switch from your normal private persona to a ruthless executive persona. Big business isn't a place for touchie-feelie nice guys.

The trick is knowing when to switch hats.
Of course, some guys never switch or don't have a nice guy side.

Most executive interviews are promotional efforts to highlight a specific product or initiative. This one is more about countering bad press than salesmanship. That's why there was all the talk about critics with agendas.

But buried in between the "selling Mr Bezos" are a few reminders of the true history of Amazon. Like the fact that the company was built off one insight: Ingram had a catalog of every book in print, over 3 million titles, yet no physical store could stock even ten percent. More, Ingram could deliver those books within a day or two yet no bookstore offered better than multi-week waits on "special orders". Presumably because they would rather move their in-store inventory than act as a mail-order front.

Anybody could do what he did, if only they thought of it.
In fact, Amazon wasn't the only one who did it.
Buy.com and B&N did it, too, to name just two.

Amazon just did it better.

Note that in the anecdote about packing tables, Bezos points out that most of his earliest employees were techie coders. That might have a bit to do with their quick and fast success. To sell online you need the best website you can possibly build, yet none of their competitors have done that, much less build one better than Amazon.

(Mostly irrelevant anecdote: yesterday I went to WalMart.com looking for a specific model of a product. The search engine coughed up three links as in stock. All three led to the exact same third party vendor and the same SKU. Click on one. Listed as in stock. Put it in cart. Go to cart to see what the tax and shipping charge is. I'm logged in to my account. Still need to enter the zip code. And: Oh, sorry. It's not really in stock. No idea when it will be. Ten minutes wasted. I've bought stuff from them but it is always a last resort and it is always a pain.)

It's not as if Amazon is even close to perfect. Anybody here can easily name three ways they could improve book discovery and sales using techniques music and video distributors use. But nobody else uses them either.

Big business is a tough activity to succeed in, but a lot of these big business successes are simply gifted with singularly inept competitors. They're the one-eyed in the land of the blind.

I agree with much of these. Amazon is a bit like Democracy, i.e. it's the worst, except for all the others.

While I wouldn't particular want to work for him, I give him a lot of credit for having a vision and holding the course of building up the company rather than worry about stock prices and bottom lines.

I would be a lot happier on the ebook front if Amazon had at least one robust competitor who forced Amazon to continue to innovate and improves with regards to ebooks. That lack of competition is why we haven't seen meaningful improvement over the last decade, but that's hardly Amazon's fault.

[John K]

Originally Posted by pwalker8

I can't read the article because it doesn't like ad blockers and I'm not about to shutdown my ad blocker.

My ad blocker lets me read but the video is blocked. I think I found it on You Tube.

[Mivo]

I think the great thing about humans in general is we're always improving things.

Usually with zero thought for the damage we do in the process.

[fjtorres]

Originally Posted by Mivo

Usually with zero thought for the damage we do in the process.

Life is change.
Without change, societies stagnate and die.
Resist change and you're helping kill your society. Contribute to it and help steer it, instead of whining, and everybody prospers. Bezos himself said it clearly; "Complaining is not a strategy." Neither is nostalgia. The future comes to everybody, ready or not.

Ebooks and publishing are a perfect example of this.
Those publisher, authors, and readers embracing ebooks and self-publishing are benefitting from this era of change; those resisting are getting hammered and, yes, "damaged".

You either surf the seas of change or drown.

Ever hear of FUTURE SHOCK, by Alvin Toffler?

Old, old book.
As relevant now as in the sixties.

[Mivo]

Originally Posted by fjtorres

Ebooks and publishing are a perfect example of this. Those authors and readers embracing ebooks and self-publishing are benefitting, those resisting are getting hammered and, yes, "damaged".

Frankly, most self-published books I bought and read were garbage. I love the idea of self-publishing (the freedom, the independence), but it's similar to loving the idea of the microwave, yet being repulsed by the type of food that is usually prepared in it.

The impact of a skilled editor is tremendous, as is the pre-filtering of junk (that which most publishers reject). Yes, there are some noteworthy self-published writers, and there is no hard rule that says self-published books cannot be properly edited, but these are, in my experience, rare exceptions. It's much like print journalism and blogging. Everyone is a journalist now, just like everyone can be a "published" author.

I have neither the time nor the energy or desire to sift through piles of self-published e-books, so my solution is to avoid anything that doesn't come from an established publishing house. Ten years ago, I had a completely different view on this. My appreciation for the concept hasn't diminished, but I'm thoroughly disenchanted by the results.

I disagree that you have to go with the flow or otherwise you're the "problem". Or rather, I don't care if that is the case. I'm not an Amazon customer, which I suppose means I limit my choice (it's largely theoretical, there is no shortage of books, both paper and e-book, that I can get from other places, far more than I can read in a lifetime) and results in slightly higher expenses because not every seller can or wants to price-dump). I still buy books from the few independent bookstores that are left, and yes, that also means I sometimes have to wait 2-3 weeks for the import of a book while Amazon's German warehouse has 20 copies sitting around that I could get the next day. Am I making a difference? I doubt it, but it's all I can do.

To me, a monopoly, quasi or actual, is never beneficial for society. Resisting it and instead supporting local economies or competing businesses does not "kill society". It, quite likely, is the only thing one can do to actually protect diversity and choice. (I realize that on the surface this seems to clash with my take on self-publishing, though again, I don't disagree with the concept.)

I don't subscribe to the belief that everything new is automatically better or superior. It's often more convenient and efficient, and quite possibly more rewarding in the short term. But in the long run? I only need to look at society and the environment to know that many of our improvements have done immense societal and environmental damage.

[GlenBarrington]

Originally Posted by Mivo

Frankly, most self-published books I bought and read were garbage.

That's too bad, I've read some great self published stuff. Don't get me wrong, I've read some terrible junk too. That's part of the fun in looking for new writers. On the whole, I've read mostly good stuff, I think. Not enough bad stuff to make me give up looking, I guess.

[DNSB]

Originally Posted by GlenBarrington

That's too bad, I've read some great self published stuff. Don't get me wrong, I've read some terrible junk too. That's part of the fun in looking for new writers. On the whole, I've read mostly good stuff, I think. Not enough bad stuff to make me give up looking, I guess.

The problem for me is that I really don't want to read through the slush pile looking for the few good books buried in it. With current state of self-publishing, even looking for books with good reviews does little to help. One horrid example of this is one site which had 6 5-star reviews of Wen Spencer's Harbinger which hasn't been released other than the snippet at the end of her Elfhome story collection. Hopefully, her home is far enough away from Kilauea not be be endangered or the release will be even more delayed... "A volcano ate my manuscript!"

[pwalker8]

Originally Posted by DNSB

The problem for me is that I really don't want to read through the slush pile looking for the few good books buried in it. With current state of self-publishing, even looking for books with good reviews does little to help. One horrid example of this is one site which had 6 5-star reviews of Wen Spencer's Harbinger which hasn't been released other than the snippet at the end of her Elfhome story collection. Hopefully, her home is far enough away from Kilauea not be be endangered or the release will be even more delayed... "A volcano ate my manuscript!"

This is, of course, the great dividing line. Those who enjoy finding the few good books are unable to understand those of us who don't want to dig through the slush piles just to find them. Those of us who use the publishing houses as a filter don't understand why someone would want to page through all that junk just to find a few good books.

For the most part, I agree with the earlier poster from Germany who to paraphrase said that he liked the concept of self publishing, but doesn't like the current implementation. I also strongly agree that Amazon needs competition.

Fanboy types who give their favorite authors a 5 star rating for books they have never read distort the rating system. The iron law of bureaucracy applies in areas other than bureaucracies, meaning that it's probably inevitable that people who want to support their favorite authors with such reviews will crowd out people who give an honest review of a specific work.

[DiapDealer]

90% of everything published has always been garbage, so readers have always had to deal with a "slush pile" of sorts. And when it comes to the "basic competence guarantee" that everyone likes to trot out when extolling the benefits of sticking to only traditionally published books/authors ... say it with me ... "no one has ever taken comfort in the fact that a book they purchased and didn't like was at least competently written." That dog won't hunt. "It was dry, boring, overly-long and utterly without inspiration. But gosh-darn it if most of the words weren't spelled correctly! I give it 3 out of 5 stars for sheer competence"--said no one ever.

Besides, navigating the self-published "slush pile" is no different than navigating the enormous pile of traditionally published books (of which there's only a tiny fraction you're truly going to enjoy): people talk about the good ones.

I don't read that many self-published books, myself. But I read a few here and there. I'm utterly open to liking them. I can't remember the last one I read that I'd call dreck. I can certainly remember the last traditionally-published book I bought and read on a whim and thought was garbage, though. *shrug*

[fjtorres]

When Sturgeon correctly said: "...90% of everything is crap." he was talking tradpub.
Nothing has changed since.

Gatekeepers are no guarantee of quality, just that somebody thought they could make money shoveling it out.

[fjtorres]

Originally Posted by DiapDealer

I don't read that many self-published books, myself. But I read a few here and there. I'm utterly open to liking them. I can't remember the last one I read that I'd call dreck. I can certainly remember the last traditionally-published book I bought and read on a whim and thought was garbage, though. *shrug*

These days you're actually more likely to find good editing in a book by an established Indie than in a book by an established BPH tradpub author. Indies care about their brand more than tradpub does about their authors's brands.