How did Amazon become the booming online business it is today? What innovations set Amazon apart from the rest?<\/p>\n\n\n\n
In Invent and Wander<\/em>, Jeff Bezos chronicles Amazon’s meteoric rise from a niche online retailer to the ubiquitous digital superstore of the 21st century. Bezos’s writings and speeches also illustrate his values and insights into innovation and business success.<\/p>\n\n\n\n Read below for an overview of Invent and Wander<\/em> by Jeff Bezos.<\/p>\n\n\n\n\n\n\n\n In 1994, a young programmer named Jeff Bezos took a chance on himself, quit his steady job, and founded the first online bookstore. Three decades later, his business\u2014Amazon\u2014is one of the giants of the internet, valued at over $1 trillion, and has utterly revolutionized the retail marketplace while pioneering the field of online computing. Always looking toward the future<\/a>, Bezos leveraged his Amazon fortune to found Blue Origin, a business through which he\u2019s pushing the frontier of commercial space exploration. <\/p>\n\n\n\n In Invent and Wander<\/em><\/a>, Jeff Bezos publishes a compilation of his letters to Amazon shareholders, combined with excerpts from interviews and speeches Bezos has given. It features an introduction by Walter Isaacson fleshing out details on Bezos himself.<\/p>\n\n\n\n Bezos has been ranked as one of the most effective CEOs in the world. From his humble beginnings as a software developer, he caught the internet wave of the \u201990s, survived the dot-com crash<\/a> of 2000, and grew his net worth to over $200 billion by 2020. His coauthor, Isaacson, is a popular biographer known for his books on Leonardo da Vinci<\/a>, Apple cofounder Steve Jobs<\/a>, and Bezos\u2019s rival in the space race<\/a>, Elon Musk<\/a>.<\/p>\n\n\n\n Bezos\u2019s story is the story of Amazon, the business he founded in 1994. Though Bezos doesn\u2019t take all of the credit for the company\u2019s success, it was he who shouldered the risk of creating an online retail store in a decade that provided a wealth of opportunities that many of Bezos\u2019s contemporaries squandered. Pulling from Amazon\u2019s shareholder statements and Isaacson\u2019s biographical sketch of its founder, we\u2019ll trace the company\u2019s history from Bezos\u2019s childhood to Amazon\u2019s modest early days in Seattle. These reports chart Amazon\u2019s survival through the internet bubble<\/a> and the Great Recession, as well as the company\u2019s rapid expansion as it added an increasing number of services, both for its customers and its business partners.<\/p>\n\n\n\n The future multibillionaire Amazon founder was born on January 12, 1964, while his 17-year-old mother was still attending high school. Bezos\u2019s path to wealth and recognition <\/strong>was fraught with financial risk<\/strong>,<\/strong> and quantifiable success would be a long time coming. Bezos and Isaacson trace Bezos\u2019s early family influences, his childhood interest in science and computers, and his fateful decisions during college and after that altered the path of his future.<\/p>\n\n\n\n Bezos\u2019s mother, Jacklyn Gise, became pregnant with him while still in high school. She was only allowed to graduate because Bezos\u2019s grandfather fought for her right to attend, but her success was due to her resilience, which Isaacson says she passed on to her child. At college, Jacklyn met and later married a Cuban immigrant named Miguel Bezos, who adopted Jeff as his son. By the age of 10, Jeff Bezos was already tinkering with computers and the rudimentary internet of the 1970s, an interest that his mother encouraged. During summers at his grandparents\u2019 ranch, Bezos learned values of perseverance and resourcefulness<\/strong>\u2014as when his grandfather went out of his way to fix things on his own rather than paying someone else.<\/p>\n\n\n\n Bezos praises American culture for encouraging and supporting entrepreneurs like himself, but that didn\u2019t make starting his business any less of a risk. For most of the first decade of its existence, Amazon stood on shaky financial ground, and it survived by putting its focus on the customer experience and experimenting with new services and products. In Bezos\u2019s annual shareholder letters, he covers Amazon\u2019s genesis, how it expanded its business model and user base, as well as how it weathered the dot-com crash at the turn of the century.<\/p>\n\n\n\n Bezos developed Amazon\u2019s original business plan not to be a rigid blueprint but to let himself think through his company\u2019s potential problems. Bezos says he selected books as the first product to sell because an online bookstore could offer a wider selection than any physical retailer.<\/strong> With an initial investment from his parents\u2019 life savings, Bezos moved to Seattle\u2014not only because it was a computing industry hotbed, but for its proximity to the country\u2019s biggest book wholesaler. <\/p>\n\n\n\n Like so many other new technology entrepreneurs in the \u201980s and \u201990s, Bezos started his business from his garage. Amazon\u2019s website went online on July 16, 1995, offering access to nearly every book in print. Even without advertisement, orders started pouring in from all over the world. <\/p>\n\n\n\n But all was not well in the online business world. During the downturn that was to come, Amazon survived because of its mission to constantly build on its relationship with customers.<\/strong> While acknowledging that the internet bubble was hard on Amazon\u2019s investors in the short term, Bezos explains the positive signs in Amazon\u2019s actual financial numbers, how the company\u2019s business model was better poised for success than those of other online stores, and how pioneering in whole new markets opened up Amazon for even greater successes.<\/p>\n\n\n\n Isaacson recounts that 1999 marked the beginning of what would be known as the \u201cdot-com crash,\u201d when most of the internet startups of the \u201990s proved to be unprofitable and went out of business. <\/p>\n\n\n\n Amazon shares dropped from $106 in 1999 to $6 in 2001, and though industry experts predicted Amazon\u2019s collapse, Bezos kept his eyes on its actual value,<\/strong> measured by customers, sales, and cash flow. He reassured investors that Amazon was sound by showing that financially it was performing better than ever. Although Amazon consistently lost money during the years it spent ramping up, it ended 2000 with $1 billion in cash and a record-high score on the American Customer Satisfaction Index.<\/p>\n\n\n\n The next economic hurdle Amazon faced was the Great Recession of 2008. During this downturn and the decade after, Amazon held its course and continued to grow. Bezos highlights three of Amazon\u2019s business innovations that blossomed into permanent, successful programs that have shaped Amazon\u2019s character in the 21st century\u2014Marketplace, Prime, and Amazon Web Services\u2014while explaining how Amazon faced the Covid crisis and continues to flourish in the shifting online economy<\/a>.<\/p>\n\n\n\n Launched in 2000, Amazon Marketplace grew out of attempts to host third-party vendors on Amazon\u2019s platform. In its early years, Amazon partnered with other sellers so customers could access goods that Amazon itself didn\u2019t keep in stock. After trying business models that separated outside vendors\u2019 products from Amazon\u2019s offerings, Amazon Marketplace placed third-party merchandise side-by-side with Amazon\u2019s products.<\/strong> Rather than diminishing Amazon\u2019s profits, Bezos argues that Marketplace is a win for all participants. It encourages healthy competition that results in better deals for customers while allowing Amazon\u2019s partners access to a global distribution network that they never could have built themselves.<\/p>\n\n\n\n Another risky venture was Amazon Prime, a customer loyalty program that coupled discounts with free shipping on most items.<\/strong> From its conception in 2005, the initial financial projections for Prime suggested it might be a financial boondoggle, and Bezos admits that Prime was risky because, if it failed, it would be hard to roll back without incurring customer resentment. Instead, Prime was a smashing success. It turned out that customers were eager to pay an annual premium for the convenience it offered, as well as its added perks such as rapid delivery and streaming video. For many users, Prime made ordering online preferable to shopping in stores.<\/p>\n\n\n\n Amazon\u2019s third major innovation is completely separate from its retail identity. Initiated in 2006, Amazon Web Services (AWS) provides on-demand cloud computing tools<\/strong> that businesses can access on a pay-per-use basis. Bezos explains that AWS grew out of Amazon\u2019s attempts to solve its own computing problems. Once the company\u2019s software team designed the digital tools they needed, they realized that other companies would need them as well. The first AWS customers were small business start-ups that couldn\u2019t afford their own IT departments, but soon, even large corporations turned to AWS to save costs. Though AWS started as a sort of side hustle<\/a>, it now represents a significant pillar of Amazon\u2019s standing as an economic giant.<\/p>\n\n\n\n In 2020, the Covid pandemic drove home how important Amazon is to its customers. <\/strong>Online retail let people order basic necessities without risking exposure from in-person shopping<\/a>. However, Bezos says that unlike the normal increase in business that comes with holiday shopping, the surge of online ordering during the Covid lockdown caught Amazon off guard. The company hired almost 200,000 new workers prioritizing delivery of essential goods. Amazon\u2019s Marketplace worked to clamp down on third-party vendors engaged in price gouging, while AWS provided cloud computing to government agencies, medical researchers, and emergency call centers, as well as schools and businesses that had to rapidly switch to online work.<\/p>\n\n\n\n While Amazon took the lead in online retail, its success didn\u2019t crush its competition\u2014instead, Amazon changed the nature of retail and created new markets for other businesses to pursue.<\/strong> Major competitors like Walmart have now moved into online retail while offering services that Amazon can\u2019t, such as curbside order pickup. By normalizing at-home delivery, Amazon created an avenue for companies such as Instacart that let grocery stores become online vendors. Bezos insists that he isn\u2019t dismayed by the increasingly crowded online marketplace because he doesn\u2019t believe that the competition detracts from Amazon\u2019s value. Rather, the online retail market is still growing, as is Amazon\u2019s overall share. <\/p>\n\n\n\n When Amazon made over $100 billion in sales in a single year for the first time, Bezos reported that they\u2019d achieved that volume faster than any other business. Instead of taking credit for that himself, Bezos attributes Amazon\u2019s success to its workers and to the company\u2019s culture, which he says was created by Amazon employees through their collaboration with each other, rather than being set from on high. In his writings and interviews, Bezos extols the values of that culture, which include intense customer focus, long-term planning, and a willingness to take risks and innovate.<\/p>\n\n\n\n From the start, Bezos declared his intention that Amazon should be the most customer-friendly business in the world. In practice, that means putting customers first is the guideline for every business decision.<\/strong> Bezos describes his deep respect for Amazon\u2019s customers, how their needs drive the business to constantly improve, and how customer focus dictates Amazon\u2019s expansion into new territories and markets.<\/p>\n\n\n\n Bezos starts from the assumption that customers are intelligent\u2014they know the difference between good and bad service, and they can see through any flimsy marketing campaign<\/a> that might try to brush away a company\u2019s faults. Therefore, the only way to build a good brand is to always give customers a positive experience.<\/strong> No matter the customer, there are always certain constants\u2014people like having a variety of options, paying less for them, and receiving what they order quickly. These constants demand that Amazon\u2019s team meet high expectations in everything they do and teach those expectations to every new employee.<\/p>\n\n\n\n To maintain Amazon\u2019s market leadership, Bezos and the rest of his leadership team focus on the company\u2019s success in the future, not on its current quarterly statements. Bezos explains his insistence on making decisions that pay out in the long run, how this reflects an \u201cownership\u201d mindset, and why many of his long-term decisions are, by necessity, judgment calls.<\/p>\n\n\n\n As early as Bezos\u2019s first letter to shareholders in 1997, he warned investors that Amazon would often engage in practices that incurred short-term losses.<\/strong> The point was to quickly take a lead in the market, which could only be done by building Amazon\u2019s brand, growing its number of repeat, loyal customers, and encouraging more and more sales through its site. He acknowledged that for purely technical reasons, online shopping in the \u201990s was still frustrating, so Amazon made up for that by reducing prices and increasing its selection. Nevertheless, the company had to be careful when cutting prices to minimize its losses as it grew.<\/p>\n\n\n\n Bezos says that Amazon executives spend more time setting customer service goals than they do poring over financial reports, because creating value for customers<\/a> results in greater business returns over the long haul. Short-term speculators don\u2019t appreciate this mindset, but Bezos believes that good investors think like owners<\/strong> and should therefore be on the same wavelength regarding Amazon\u2019s long-term ambitions.<\/p>\n\n\n\n The biggest gambles requiring the most judgment revolve around some form of innovation. Bezos places innovation at the core of Amazon\u2019s identity and culture. He explains innovation\u2019s crucial role in keeping Amazon fresh and energized, how innovation is driven by both customer needs and industrial trends, and why failure is an acceptable, necessary cost.<\/p>\n\n\n\n Bezos\u2019s central business philosophy is that no matter how established your company is, you should always act as if<\/a> it\u2019s a startup.<\/strong> The alternative is complacency and stagnation, whereas a startup mentality brings energy and a gung-ho attitude to stay ahead. This doesn\u2019t just apply to the boss, but to every employee, because the next innovative insight could come from anywhere in the organization. For example, Bezos writes that Amazon Prime, which paid for itself by the sheer volume of business it generated, was first suggested by a low-level programmer. For this reason, all employees must be empowered to think for themselves and come up with risky ideas. If not, they may quit and innovate for your competitors instead.<\/p>\n\n\n\n When innovating, Bezos says that it\u2019s important to keep ahead of sweeping industry trends<\/a>, such as the development of artificial intelligence, but it\u2019s equally important to be so aware of customers\u2019 needs that you can guess what they want before they know it.<\/strong> This involves a process that Bezos calls \u201cwandering\u201d\u2014inventing new products and services with only a vague notion of whether they\u2019ll be successful. This process of trial and error isn\u2019t as haphazard as it sounds, but it\u2019s driven by Amazon\u2019s employees\u2019 insights about how customers engage with the world and what potential innovations might create opportunities for Amazon and its users.<\/p>\n\n\n\n Amazon\u2019s success has made Bezos one of the richest people on the planet, but his ambitions don\u2019t end there. Bezos wants to use his wealth to be a positive force for change in the world. He discusses his thoughts about the social responsibilities of big business and how he\u2019s using Amazon and his aerospace company Blue Origin to improve climate conditions on Earth while laying the foundation for future space-based endeavors.<\/p>\n\n\n\n Industry giants like Amazon are often disparaged for their success, which Bezos argues isn\u2019t helpful or fair. Because of its scale, Amazon can have a positive impact on the world<\/strong> in ways that individuals and nonprofits simply can\u2019t. One way that Amazon has sought to fulfill its responsibilities to society is by raising its wages above the minimum required and challenging other businesses to follow suit. Beyond that, Amazon offers paid tuition for employees pursuing advanced education, while extending paid leave to employees\u2019 family members whose own jobs may not provide the same. In addition to setting an example for other companies, Bezos writes that such policies are good for the recruitment and retention of dedicated workers.<\/p>\n\n\n\n Amazon\u2019s industry leadership extends into environmental issues. Bezos prides himself that Amazon was the first business to sign the 2019 Climate Pledge,<\/strong> despite the fact that its reliance on packaging and shipping makes it a carbon-intensive industry. To meet its climate goals<\/a>, Amazon designed one of the world\u2019s most complex systems<\/a> to track and reduce its carbon emissions. In addition, Amazon\u2019s internal goal is to be carbon neutral by 2040, investing in renewable energy and a fleet of electric delivery vehicles. If it can achieve this, Amazon can pressure others to meet the same standards and even supply the technology to do so.<\/p>\n","protected":false},"excerpt":{"rendered":" How did Amazon become the booming online business it is today? What innovations set Amazon apart from the rest? In Invent and Wander, Jeff Bezos chronicles Amazon’s meteoric rise from a niche online retailer to the ubiquitous digital superstore of the 21st century. Bezos’s writings and speeches also illustrate his values and insights into innovation and business success. Read below for an overview of Invent and Wander by Jeff Bezos.<\/p>\n","protected":false},"author":14,"featured_media":70376,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[40,45,33],"tags":[1301],"class_list":["post-115882","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-books","category-business","category-people","tag-invent-and-wander","","tg-column-two"],"yoast_head":"\nInvent and Wander <\/em>by Jeff Bezos<\/strong><\/h2>\n\n\n\n
The Rise of Amazon<\/strong><\/h3>\n\n\n\n
Meet Jeff Bezos<\/strong><\/h4>\n\n\n\n
Amazon Is Born<\/strong><\/h4>\n\n\n\n
Bust and Boom<\/strong><\/h4>\n\n\n\n
Forging Ahead<\/strong><\/h4>\n\n\n\n
Business Innovations<\/h5>\n\n\n\n
Crisis and Competition<\/h5>\n\n\n\n
The Cornerstones of Amazon\u2019s Success<\/strong><\/h3>\n\n\n\n
It\u2019s All About the Customers<\/strong><\/h4>\n\n\n\n
Taking the Long View<\/strong><\/h4>\n\n\n\n
The Will to Innovate<\/strong><\/h4>\n\n\n\n
Looking to the Future<\/strong><\/h3>\n\n\n\n