Sunday, January 28, 2018

The Everything Store: Jeff Bezos and the Age of Amazon

Every company claims it is customer centric, but have you ever seen a CEO keep an empty chair at management meetings to represent the customer?

Welcome to Amazon, and the cult of Jeff Bezos. 

“The Everything Store: Jeff Bezos and the Age of Amazon” by Brad Stone is an extremely well researched, almost biographical account of, and its founder Jeff Bezos. Aided by dozens of interviews (including some with Bezos himself) with former and current employees, suppliers, competitors, friends and relatives, family members, teachers and almost anyone who came in contact with him, the author has built an in-depth profile of Amazon and its legendary founder Jeff Bezos. The author traces the journey of Amazon right from the birth of the idea in the mid-1990s and takes the reader, often in excruciating detail till where it stood when the book was published in 2013.

The origin
It was 1994 and those were early days of the Internet. But Bezos was quick to see its potential. The idea of Amazon was simple – an internet company that served as an intermediary between customers and manufacturers, and sold every type of product all over the world. Throwing away his lucrative Wall Street job, Bezos swooped down on the opportunity and set up Starting out first with selling books, Amazon soon spread itself to other categories. And the rest – as they say – is history.

The book gives a deep insight into Amazon and its founder Jeff Bezos

Bezos is Amazon. Amazon is Bezos.
Bezos’ overwhelming personality is stamped all over Amazon. The story develops as a compendium of countless narratives from people who had close encounters with Bezos and brings out vividly his extraordinary personality and management style. Exceptional intelligence, competitive spirit, a volcanic temper, ruthless combative approach, an almost limitless capacity to put in hard effort and an outlandish ambition (Bezos is also “working to lower the cost of space flight to build a future where we humans can explore the solar system firsthand and in person”, by the way) - this is what defines Bezos. The book portrays him as an extremely difficult micromanager to work for, setting very high standards that others struggle to meet. Bezos’ personality style has ensured a ‘confrontationist’ culture at Amazon. Bezos abhors social cohesion – the natural impulse to seek consensus.  Yet, the author says, former Amazon employees often consider their days at Amazon the most productive time of their career. “Colleagues were smart, work culture was challenging and there were constant opportunities for learning” says one of them.

Customer First
How did Amazon manage to grow at such a breakneck speed? How did Amazon succeed where others didn’t? Bezos realized that e-Commerce had the potential to understand its customers in a way brick & mortar merchants can never do. “We are genuinely customer centric, genuinely long term oriented and genuinely like to invent”, Bezos is quoted in the book as saying, building Amazon on the edifice of a few clearly defined and religiously followed founding principles – customer obsession, frugality, bias for action, ownership, a high bar for talent and innovation. Among this, extreme customer centricity comes out repeatedly as the single most defining character that distinguishes Amazon from others.  “There are two kinds of retailers – those who work to figure out how to charge more, and those who try to figure out how to charge less. We are in the second category. Period.”

Tech, not Retail
Bezos visualizes Amazon as a technology company, not a retailer. A key element of Amazon’s success has been Bezos’ constant focus on innovation. Negative reviews, referral fees, platform services, the Amazon Marketplace – Amazon claims many a firsts to its credit, though it was not the only or even the first online bookstore to start operations. Complex algorithms studying customer behavior, calculating cheapest & fastest shipping routes, crawling the web to keep a tab on competitor prices – all have played a crucial role in Amazon’s success. Yet, Bezos struggled to present Amazon as a technology company pioneering e-Commerce until much later when businesses like the Cloud and Kindle came along. With Cloud, Bezos dreamt of ‘a student in a dorm room having at his disposal the same infrastructure as the largest companies in the world’. And true to it, it facilitated the creation of thousands of internet startups, pulling out the tech sector from a post depression in the early 2000s.

A must read
As I write this review in early 2018, Jeff Bezos has already surpassed the likes of Bill Gates and Warren Buffet to become the richest man in the world. And while the others may well be past their prime, the Amazon story has only just begun.

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