This startup story features Jeffrey P. Bezos, the innovative founder of Amazon. The company, which now generates over $61 Billion in Revenue and holds the title as the world’s largest online retailer, was started out of Bezos’s garage at 30 years old.
- Industry: Online Retailing
- Annual Revenue: $61.09 Billion
- # of Employees: 97,000
- Famous For: Being the world’s largest online retailer
How Amazon Got Started
The year was 94′ and Bezos was working diligently on Wall Street. At 30 years old, he began to see the internet revolution take place, and made the decision to quit his job and start an internet company.
“The wake up call was finding this startling statistic that web usage in the spring of 1994 was growing at 2,300 percent a year. You know, things just don’t grow that fast. It’s highly unusual, and that started me about thinking, “What kind of business plan might make sense in the context of that growth?”
After making a list of the ‘top 20’ products that he could potentially sell on the internet, he decided on books because of their low cost and universal demand. It turns out, it was just the beginning…..
The Founder’s Start
As a child, he spent summers at his grandfather’s ranch in southern Texas, “laying pipe, vaccinating cattle and fixing windmills”. The 18-year-old Bezos “said he wanted to build space hotels, amusement parks and colonies for 2 million or 3 million people who would be in orbit. ‘The whole idea is to preserve the earth’ he told the newspaper …. The goal was to be able to evacuate humans. The planet would become a park”.
The initial startup capital came from his parent’s personal savings.
From an interview with Jeff Bezos, for the Academy of Achievement:
“The first initial start-up capital for Amazon.com came primarily from my parents, and 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.”
Follow on Funding
Amazon raised a series A of $8M from Kleiner Perkins Caufield & Byers in 1995. In 1997, Amazon went public to raise additional capital. By 1999, the value of the Kleiner Perkins Caufield & Byers investment in Amazon created returns of over 55,000%.
Years to profitability
Within two months, Amazon’s sales were up to $20,000/week. However, the company has continued to plow their revenue back into growth. The chart below depicts Amazon’s continued focus on long-term growth, with profit remaining near $0 or below, and revenue rising.
Important Amazon Milestones:
1994: Jeff Bezos quits his job and launches Amazon out of his garage.
Within 30 Days, it is doing $20,000 per week in sales.
1995: Bezos raises an $8 Million round of funding from Kleiner Perkins.
1997: Amazon goes public at $18 per share.
1999: Bezos is named Time Magazine’s “Person of the Year” for popularizing online shopping.
2009: Bezos acquires Tony Tsieh’s Zappos through a stock swap.
2013: Bezos acquires the Washington Post.
Companies Amazon Has Acquired:
Amazon has made over 44 notable company acquisitions over the years. It’s first Acquisition was in 1998.
- 1998: PlanetAll, Junglee, Bookpages.co.uk (later became Amazon UK).
- 1999: Internet Movie Database (IMDb), Alexa, Accept.com, and Exchange.com
- 2003: CDNow (Defunct)
- 2004: Joyo.com, an e-commerce site in China.
- 2005: BookSurge, Mobipocket.com, and CreateSpace.com.
- 2006: Shopbop, a women’s luxury retailer.
- 2007: DPReview.com and Brilliance Audio.
- 2008: Audible.com, Fabric.com, Box Office Mojo, AbeBooks, Shelfari, and Reflexive Entertainment.
- 2009: Zappos, Lexcycle, SnapTell, Stanza (Kindle Rival).
- 2010: Touchco., Woot, Quidsi, BuyVIP, and Amie Street.
- 2010: Toby Press
- 2011: LoveFilm, The Book Depository, Pushbutton, and Yap
- 2012: Kiva Systems, Teachstreet, and Evi
- 2013: IVONA Software, GoodReads, and Liquavista
Jeff Bezos Startup Advice
“We are stubborn on vision. We are flexible on details…. We don’t give up on things easily. Our third-party seller business is an example of that. It took us three tries to get the third-party seller business to work. We didn’t give up.”
“If you’re not stubborn, you’ll give up on experiments too soon. And if you’re not flexible, you’ll pound your head against the wall and you won’t see a different solution to a problem you’re trying to solve.”