Monday, March 31, 2008

Let's Take A Look At Jeff Bezos

With all the flap about Amazon's latest announcement, I thought it might be instructive to take a closer look at the company. We're going to start today by talking about the man at the helm of the Internet giant: Jeffrey Preston Bezos. Then tomorrow we'll talk about and all its little tributaries.

Bezos was born on January 12, 1964 in Albuquerque, New Mexico to Jacklyn Gise Jorgensen, a teenage bank teller. Jeff says he's had no contact with his biological father since he was a year old. Two other men dominated his childhood: his maternal grandfather, Lawrence Preston Gise, and his stepfather, Miguel Bezos.

Jeff's grandfather was an engineer and the regional manager for the Atomic Energy Commission in Albuquerque. "Pops" Gize retired at an early age to his Lazy G Ranch in Texas. Jeff spent a lot of time with his grandfather on the 25,000-acre ranch, learning to fix equipment, dig ditches and brand cattle.

When Jeff was four, his mother remarried. Her new husband was a Cuban immigrant named Miguel Bezos who adopted Jeff. Miguel, who prefers the name "Mike," came to the U.S. alone at seventeen, learned English, and earned both a high school diploma and a college degree before becoming a petroleum engineer at Exxon. He modeled the work ethic that Jeff still demonstrates today. Jackie and Mike had two more children together: Christina and Mark.

Jeff's mother Jackie says Jeff showed evidence of both a mechanical aptitude and a strong will at a very young age. When he was three, he demanded a bed instead of a crib. When Jackie refused, she found the toddler in his room, clutching a screwdriver and trying to dismantle the despised crib.

The family moved from Texas to Florida where Jeff graduated from Miami's Palmetto High School in 1982 as the valedictorian of the 680-student class. He went on to Princeton intending to study physics, but later switched to computer science and electrical engineering.

Jeff graduated summa cum laude from Princeton in 1986 with a membership in Phi Beta Kappa. This is a serious Type A personality.

Jeff did three stints with Wall Street firms after graduation. The first was with a high tech start-up called Fitel that was trying to develop a network for international trade. After two years with Fitel, he joined Bankers Trust in 1990 where he was in charge of developing their computer system. Two years later, he joined D.E. Shaw & Company, a hedge fund that relied heavily on computer technology. He stay at Shaw for four years, meeting his future wife, MacKenzie, a researcher and another Princeton alum there. They married in 1993 when he was 29. They now have four children.

According to his bio on the Academy of Achievement (AoA) website, "In 1994 . . . [while doing research] Jeffrey Bezos observed that Internet usage was increasing by 2300 percent a year. He saw an opportunity for a new sphere of commerce, and immediately began considering the possibilities."

Jeff researched the commodities most likely to be sold successfully on the Internet and zeroed in on books. "He flew to Los Angeles the very next day to attend the American Booksellers' Convention and learn everything he could about the book business." (AoA)

When Jeff approached Shaw about the possibility of investing in an Internet start-up, his employers declined the opportunity. Jeff resigned, and he and MacKenzie set off for Texas where he convinced his family to loan him $300,000. Mike and Jackie Bezos trusted him enough that they gave him the bulk of their retirement savings despite the fact that Jeff told them there was only a 30% chance his new venture would succeed.

When I think of taking my parents' life savings, my skin chills. It tells me a lot about Jeff's determination and self-confidence. Of course, his gamble paid off. Jeff still owns almost 24% of the company and has a net worth in excess of $6 billion. did a profile on Bezos in 2004. I found this quote interesting:

What really distinguishes Bezos is his harrowing leaps of faith. His best decisions can't be backed up by studies or spreadsheets. He makes nervy gambles on ideas that are just too big and too audacious and too long-term to try out reliably in small-scale tests before charging in.

He has introduced innovations that have measurably hurt Amazon's sales and profits, at least in the short run, but he's always driven by the belief that what's good for the customer will ultimately turn out to be in the company's enlightened self-interest.

Bezos sees himself as a "change junkie," and the culture he has created is adept at coming up with innovations, but he's also surprisingly blatant and unabashed about copying ideas from competitors. And while Amazon has benefited from Bezos's forceful convictions, he's remarkably good at listening to outside critics and following their advice when they convince him that he's wrong.

We'll pick up tomorrow with

But, before I go, I want to draw your atttention to a post I did about ten months ago on May 20 here. In talking about the future of publishing, I said:

The large houses face competition on two fronts: from the Internet giants and from the e-publishing industry.When I say Internet giants, I'm talking about Google,, Yahoo, eBay and Microsoft. Of the five, I suspect the biggest direct competition will come from either Google or My money is on Amazon. The biggest dark horse IMHO is eBay.

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