A New Beginning
First of all, we'd like to officially welcome all readers to Built That! This site is meant to serve as both a resource and entertainment for all things business and entrepreneurship. Ideally, this will be a welcoming community that fosters growth and is inclusive for all, from the novice accountant to the seasoned wall street vet. We hope to bring you thorough and detailed articles, interviews, and stories in the future. Our hope is to primarily focus on the stories of startups, but topics may certainly range in size and scope. And in a way, this article is the start of Built That's own story. But for now, let's take a look at a company we are all familiar with...
The seed of an idea; A jungle of growth
Jeff Bezos was not always a household name. In 1986 he graduated from Princeton with a BS in electrical engineering and computer science. He ultimately found a job on Wall Street where he worked from '86 to '94. The early '90's as we now all know, was the beginning of the 'dot com era'. There was no place where this was more obvious than Wall Street. Bezos likely could have made a fortune buying and selling internet stocks throughout the decade but he chose to take a leap of faith and create his own success story.
Bezos realized the internet would be wildly influential and fundamentally change how people buy products. He created a list of 20 products that would work well to sell over the internet and decided upon books due to their low cost and universal demand. Like just about all startups the company needed initial funding. And again, like most startups this money came from people he knew quite well, namely, his parents. Bezos is quoted as saying;
"...they invested a large fraction of their life savings in what became Amazon(.com). And you know, that was a very bold and trusting thing for them to do because they didn’t know. My dad’s first question was, “What’s the Internet?” Okay. So he wasn’t making a bet on this company or this concept. He was making a bet on his son, as was my mother. So, I told them that I thought there was a 70 percent chance that they would lose their whole investment, which was a few hundred thousand dollars, and they did it anyway.”
To walk away from Wall Street and put that much money on the line is an unbelievable amount of risk, especially with a very uncertain reward. Luckily for Bezos the Internet Era had yet to reach it's fever pitch so Amazon later successfully raised venture capital and went public in 1999, only 5 years after its founding.
After successfully navigating and surviving the Dot com crash, Amazon bet more heavily on the internet by expanding its business with Amazon Web Services (AWS) in 2002. As the number of internet users continued to grow and online shopping became increasingly popular and convenient, Amazon grew significantly in size and stature. A number of high profile acquisitions, including Zappos in 2009, established the e-commerce giant as a force to be reckoned with.
Not only could the company scale tremendously well, but their focus on user experience and customer satisfaction (re: Zappos acquisition) was second to none. This alone would have cemented the company in Silicon Valley folklore but their ability to beat others to trends and keep the company from stagnating proved wildly valuable as well.
Amazon has been quite busy with its acquisitions over the years making major purchases as recently as 2017, with Whole Foods. At a time when the phrase 'retail apocalypse' first appeared in the media and brick and mortar was all but doomed, they seemed to betting on the opposite. Their uncanny ability to innovate while focusing heavily on logistics and efficiency has made one of their largest acquisitions so far, a success.
Amazon's own success has in turn made Bezos the wealthiest individual in the world with a net worth around $160 Billion as of May 2019. There has also been no mention up to this point of Blue Origin, an aerospace company Bezos founded in the early 2000's while running Amazon, or The Washington Post which he acquired in 2013 for $250 Million in cash. Today at 55 years old, Bezos and Amazon have already become a success story for the ages. The quintessential American dream. It will certainly be interesting to see what the next 25 years of Amazon's history will bring.
Ultimately everything must start from a single point. Whether you just have an idea, or you fall backwards into a business, nobody starts off with a $1 Billion valuation or $1 Trillion in market cap.
Starting with the realization that the internet would prove to be a massive disruption to how we shop, Bezos began by selling books online. His office was not much, and his technology was minimal, but he got started and mapped out his strategy.
Amazon simultaneously exists today as one of the world's most feared and respected companies. Any industry they enter sends shock waves to competitors. They often disrupt and innovate solutions that are orders of magnitude better than the second place company.
They do this by always putting their users first, and thinking of creative solutions to hard problems. How do we offer extremely fast shipping but maintain our profits? Offer amazon prime memberships at an appropriate price. This also creates loyalty to the company when they deliver on their promise and instills a habit in the consumer.
The cue; a person needs something fast and at a good price. The routine; they search amazon instantly and find what they need in seconds or minutes. The reward; Quality products show up on time - often only taking a day or two to arrive anywhere in the US.
Taking advantage of trends early has been another hallmark of their success. For example:
1) Selling online
2) Allowing third parties to use their platform
3) Extremely fast (and often free) shipping
4) Moving into cloud/web services before the market was obvious
5) Transforming brick & mortar stores/warehouses to emphasize efficiency (think their distribution centers and Whole Foods)
The list could go on...
The key is not to look at a company like Amazon and be afraid or overwhelmed but rather to look at a company like Amazon and think that this all started with one man on a mission. The next Amazon is out there, waiting to be built.
For a little more inspiration check out Jeff Bezos describing Amazon, long before becoming the world's wealthiest individual.
What impresses you the most about Amazon?