Jeff Bezos In 1999 On Amazon’s Plans Before The Dotcom Crash

Updated : Nov 10, 2019 in Articles

Jeff Bezos In 1999 On Amazon’s Plans Before The Dotcom Crash


It doesn’t matter to
me whether we’re a pure internet play. What
matters to me is do we provide
the best customer service. Internet Shminternet Given the decades of
wisdom that has built up in the business
world investors, it sounds like you’re saying
you’re making a big speculative bet, if
they’re investing in your company’s stock.
Well I think all Internet companies you
know the stocks are incredibly volatile… But even long term. Long term
I believe. That it’s very easy to
predict that there are going to be
lots of successful companies born of the Internet.
They’re going to have very large market caps
and so on. I also believe that today where
we sit it’s very hard to predict
who those companies are going to be. So you
know you can make bets on these things and
I think that Amazon.com if we don’t if
we’re not one of those important lasting companies
born of the Internet we will have
nobody to blame but ourselves and we
will be extremely disappointed in ourselves.
But there are no guarantees. It’s very
very hard to predict. If you go back
and look at the companies created by the P.C.
revolution in 1980 you wouldn’t have predicted
the five winners the five biggest winners.
There’ve been lots of winners actually. So this
space is a little different and brand name
may need may mean more and then
there’s some increasing returns kinds of things
maybe more. But I believe that if
you can focus obsessively enough on
customer experience, selection, ease of use, low
prices, more information to make purchase decisions
with. If you can give customers all
that plus great customer service and with our
toys and electronics we have a 30 day return
policy. If you can do all of that then I
think you have a good chance. And that’s what
we’re trying to do. You’re not really
a pure Internet company anymore either. I
mean you’ve got millions of square feet now
of real estate. You’ve got a growing huge
and growing inventory of items with you keep
in stock. You’ve got thousands and thousands
of employees now. We have over 3000
employees and over four million square feet
of distribution center space. And those are
things I’m very very proud of because
with that distribution center space and
half a dozen distribution centers around the country
it allows us to get product close to
customers so that we can ship it to
customers in a very timely way which improves
customer service levels. That’s what we’re
about. If there’s one thing Amazon.com is
about its obsessive attention to
the customer experience, End to
end. And that’s what those
distribution centers. But you’re not
a pure Internet play. It doesn’t. It doesn’t
matter to me whether we’re a pure Internet
play it matters to me is we provide
the best customer service. Internet Shminternet. It’s
that’s you know that doesn’t matter. Well but it does
matter to your investors to know whether they’re
investing in a company that is… No, they should be
investing in a company that obsesses over
customer experience in the long term.
There is never any misalignment between
customer interests and shareholder interests. Well that’s the
same argument that somebody at WalMart would
make as well. I don’t see why not.
I think they should make that argument. So
it’s a correct argument. OK. So you’ll open as
many square feet of space physical space as you
have to hire as many employees as
you have to… To service customers. Absolutely. And we’ll do
it as rapidly as we can. That’s a very
cost intense proposition. Not compared to
opening an equivalent network of retail stores. So if you open a
bunch of chain stores. Look when we open
a distribution center we’re opening places that may
have square where we may pay 30 cents a
square foot for for a lease instead of
paying seven dollars a square foot which you
might pay in a high traffic retail area.
So when you compare those things they’re not
the same. You can’t compare a big chain
of of of of retail stores to half
a dozen distribution centers. It’s just not you
know it’s bad math. Either way whichever side
of the argument you believe you’re making what
it seems to me. There’s only one side
which is obsess over customers. But it seems to me
that. Both with the speed of your growth in
terms of the number of stores online that
you’re opening the different businesses you’re
getting into the number of distribution
centers and you’re opening a new
employees you’re hiring That you are making
an intense gamble here which is twofold. One
that you can run this number of
businesses different businesses well. And two that
you can make money by selling vast volumes
of products and essentially razor
thin profit margins. I think that the
the first one in particular I agree with
wholeheartedly which is that where There there’s no
guarantee that Amazon.com can be a
successful company. What we’re trying to do
is very complicated. There’s huge execution risk
involved. We have a terribly complicated
business. We’re growing, you
know, historically very rapidly. We’re
opening new product categories we’re
expanding in new geographies. We have
whole new business models with things
like auctions. Now we think this is the
less risky of the two approaches because scale
is important in this business. And you
need scale also to offer the lowest
prices and the best customer service to
people. So scale is important to us and
we’re going to go after that kind of scale.
But it does mean that the executional challenges
are huge. And so you’ll find a bunch
of people back in Seattle and around
the world working very hard to make sure
we service customers at the level that they’re
used to. And then even improving that. Isn’t it to some
extent a certain amount of, with
all do respect, corporate arrogance to
assume that you can come into these businesses
which you have no experience in and
virtually overnight enter a huge variety
of different businesses and become the best in
those businesses and the market leader in
those businesses. There are other companies that
have been running these types of businesses for
decades if not more. I don’t think so. So
you know when we first started selling books four
years ago we were everybody said look
you’re just computer guys you don’t
know anything about selling books. And that was
true. But what we really cared about customers and
now we know a lot about books and
when we first started selling music people said
the same thing but we hired the right
people. So we don’t do this in a vacuum. We
go out and hire the best industry experts
in each of these categories. That’s the
same with toys electronics. So you know
we take this very seriously we take
the commitment to the customer very seriously
and we’re not about to release something
or announce something before it’s ready.

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