Almost as many people tried to attend a corporate press conference in Seattle on Wednesday last week as there were soccer fans crammed into Sao Paulo’s Arena Corinthians stadium to watch England lose to Uruguay the next day; 60,038 people, showing no little dedication, applied to watch Amazon boss Jeff Bezos reveal the company’s new smartphone.
“I would love nothing more than to go to this unveiling,” said middle-aged Jason in a video application that won him a ticket. “To be able to go this event and be able to experience it first hand and see what Jeff has to unleash to the world would be absolutely fantastic. Please consider me.”
Jeffrey Preston Bezos likes to think most of his 244 million customers love him and his company, despite accusations that it is destroying independent bookshops, publishers, music labels and high streets across the world by selling goods so cheaply and allegedly ill-treating its staff in the process. There is also the question of whether Amazon is paying its fair share of taxes.
In Britain last year, the company paid ￡4.2 million (US$7.1 million) in tax despite selling goods worth ￡4.3 billion.
Although it has expanded from zero customers to almost a quarter of a billion in two decades, today is still “day one,” according to Bezos, who wrote his business plan on a road trip from New York to Seattle 21 years ago.
In his annual letter to shareholders, Bezos attaches a copy of the three-page mailshot he first sent them after the company’s stock market flotation in May 1997.
“Amazon.com passed many milestones in 1997,” the leaflet begins. “But this is Day 1 for the Internet.”
Although the company is valued at US$147 billion — almost four times the value of supermarket Tesco — Bezos repeats his “Day 1” mantra in almost every interview and circular to shareholders.
He owns a fifth of the shares, giving him an estimated fortune of more than ￡14 billion and putting him among the top 20 richest people in the world.
In a recent shareholder letter, he said the Day 1 “alarm clock hasn’t even gone off yet” and that the world is “still asleep” to what the rest of Day 1 will bring.
This Day 1 obsession extends to the company’s Seattle headquarters near Pike Place market (the birthplace of the city’s other corporate giant, Starbucks).
The two main buildings — staffed by “Amazonians” or “missionaries” — are called “Day 1 South” and, across Terry Avenue, “Day 1 North.”
Amazon’s “campus” boasts a canteen called “the garage,” a reference to the birthplace of the company, the garage of Bezos’ rented Seattle home.
Garages are a big thing on the West Coast technology scene, with Google, Apple and IBM also starting life in them.
Another building is named “Rufus,” after the first dog that hung out in the office.
Bezos is a dog lover and was joined on that 1993 road trip from New York, where he worked for hedge fund DE Shaw, to the west coast by MacKenzie, his wife of 21 years, and their dog, Kamala (named after an obscure Star Trek character, about which he is also obsessed).
There are no big Amazon logos on campus, but a plaque near the door on Day 1 North quotes Bezos: “There’s so much stuff that has yet to be invented. There’s so much new that’s going to happen. People don’t have any idea yet how impactful the Internet is going to be and that this is still Day 1 in such a big way.”
If Bezos, who has bought the Washington Post, invested in plans to take tourists into space and is spending ￡24 million building a clock in Texas’ Sierra Diablo mountains that is designed to run for 10,000 years, has any ideas about what the future might bring, he is not going to tell you.
He consistently refuses to be drawn on any plans, which has irritated Amazon’s customers as well as Wall Street investors.
The consensus about the Fire Phone launch was that it was the latest salvo in the great three-way tech battle between Amazon, Apple and Google. They want each other’s business and are, as wired.com suggested, “all turning into each other.”
Days before the press conference, each of the 300 guests — analysts, journalists, investors and Amazon’s most diehard of customers — was given a present: Bezos’ favorite book, Mr Pine’s Purple House.
Bezos, who was born in Albuquerque to Jacklyn, a teenage mother who split up with Bezos’ father before his second birthday, asked her to read the book to him hundreds of times during his childhood. She was in the audience on Wednesday last week.
The hero of the story “wants to do things a little bit differently” and paints his house purple while all his neighbors fastidiously keep theirs white, Bezos said.
“We at Amazon like to do things a little bit differently too,” he said.
The business and technology world agrees.
He was named “the ultimate disrupter” by Forbes magazine, stating: “He has upended the book industry and displaced electronics merchants ... Amazon is pushing into everything from couture retailing and feature film production to iPad-worthy tablet manufacturing. He’s willing to take risks and lose money, yet investors have embraced him.”
For Bezos, the number one focus is customers, not sales or profits, and he encourages the public to e-mail him — firstname.lastname@example.org.
He reads the e-mails and forwards them to the relevant executive with one addition — a question mark.
The manager is expected to solve the problem within hours and prepare an explanation for Bezos.
At one of the company’s biannual meetings at Seattle’s 17,000-seat KeyArena, an employee asked: “Why are entire teams required to drop everything on a dime to respond to a question mark escalation?”
It was explained to him in no uncertain terms that if one customer had gone to the trouble of seeking out Bezos’ e-mail address it was likely that the same problem was annoying hundreds, if not thousands, of other people.
“Every anecdote from a customer matters,” he was told. “We treat them as precious sources of information.”
Bezos, who has drawn international condemnation for the lengths Amazon goes to avoid paying taxes in the UK, the US and elsewhere, says the most important thing Amazon has done is to “earn trust with customers.”
His approach, he says is: “Step 1: Do hard things well. Step 2: Repeat.”
Of rival executives, he says: “When they’re in the shower in the morning, they’re thinking about how they’re going to get ahead of one of their top competitors. Here in the shower, we’re thinking about how we are going to invent something on behalf of a customer.”
The latest invention is the Amazon Fire, a phone with four cameras to show images in “dynamic perspective” — technology that will render maps and photographs with a 3D perspective.
Bezos described the phone, which will cost from ￡117 on a two-year contract with AT&T in the US, as “a better phone for our most engaged customers.”
His main motivation is not to make money selling phones, but to encourage customers to buy even more stuff — from books and DVDs, to diapers and pet food — from Amazon.
Specifically, he wants them to sign up and buy from Amazon Prime, a special service that offers free speedy delivery, ebooks and access to an online library of films and TV shows for ￡79 a year.
Analysts at UBS reckon Amazon will lose ￡176 million on smartphones this year and up to ￡330 million next year. To make up for this, each phone owner would have to spend ￡207 more on Amazon products than the average customer.
This might well happen because the phone is primarily designed as a shopping device.
It has a button called Firefly, which allows users to take a photograph of an object and immediately see its listing on Amazon. The software, which is linked to the user’s Amazon account and credit card, can also recognize music — much like Shazam — and direct you to buy the album or concert tickets on Amazon.
Bezos, who is normally seen in jeans and a formal blazer, spent as much of the 90-minute presentation speaking about the success of Amazon Prime as he did on the new phone.
The numbers explain why. The average Prime member spends ￡719 a year on Amazon, ￡411 more than a regular user. Prime members’ purchases and membership fees make up more than a third of Amazon’s US profits. And membership is projected to rise 150 percent, to 25 million, by 2017.
Former Prime head Robbie Schwietzer said: “Once you become a Prime member, your human nature takes over ... Not only do you buy more, but you buy in a broader set of categories.”
When Bezos wanted to show the conference audience how much customers loved Prime, he turned to Twitter, flashing up a tweet from @dolix519 that read: “I’m in a monogamous relationship with amazonprime.” The audience erupted with laughter and applause.
Others might view the Amazon advance with more caution.
The Bezos files
Born: Jeffrey Preston Jorgensen, Jan. 12, 1964, in Albuquerque, New Mexico, to Jacklyn Gise and Ted Jorgensen. They separated after a year and Bezos was brought up by Jacklyn and Miguel Bezos, who had adopted him after marrying his mother. Graduated from Princeton in 1986. Married, four children.
Best of times: In 1994, aged 30, he left his job at a New York hedge fund and moved to Seattle to found Amazon. In 1999, he was named Time magazine’s person of the year. Last year, he was named one of the wealthiest people in the world, with an estimated net fortune of ￡14 billion (US$8.25 billion).
Worst of times: He was named the world’s worst boss last month by the International Trade Union Confederation.
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“Life’s too short to hang out with people who aren’t resourceful.”
What others say: “The fast-moving Internet economy has a jungle of competitors... and here’s the king.”
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