Founders
Episode 179 #179 Jeff Bezos
Founders

Episode 179: #179 Jeff Bezos

Founders

Episode 179

#179 Jeff Bezos

David Senra is the host of Founders, where he studies history's greatest entrepreneurs. This is what he learned from reading The Everything Store: Jeff Bezos and the Age of Amazon by Brad Stone.

What I learned from The Everything Store: Jeff Bezos and the Age of Amazon by Brad Stone.

This is part one of a three part series on Jeff Bezos. The next two books are Working Backwards: Insights, Stories, and Secrets from Inside Amazon and Amazon Unbound: Jeff Bezos and the Invention of a Global Empire.

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[0:54] It may very well be that the absolute intensity of drive and focus is essential and incompatible with all of the nice management thought about consensus and gentle demeanor.

[2:07] Jeff’s clarity, intensity of focus, and ability to prioritize is unusual.

[4:05] As I read the Steve Jobs biography I even had an insight and question about myself, that maybe I haven’t begun to really find my own limits.

[10:49] You have to be able to think what you're doing for yourself. 

[11:42] There is probably no limit to what he can do. 

[12:34] People forget that most people believed Amazon was doomed because it would not scale at a cost structure that would work. It kept piling up losses. It lost hundreds of millions of dollars. But Jeff was very smart. He’s a classic technical founder of a business, who understands every detail and cares about it more than anyone.

[13:45] Bezos has proved quite indifferent to the opinions of others

[13:58] Bezos is extremely difficult to work for. 

[15:58] Amazon's internal customs are deeply idiosyncratic. 

[16:15] He is highly circumspect about deviating from well established, very abstract talking points. 

[18:08] The financial community knew very little about D. E. Shaw, and its polymath founder wanted to keep it that way. 

[20:15] Jeff was not concerned about what other people were thinking. 

[20:26] Bezos had closely studied several wealthy  businessmen

[21:13] Bezos was disciplined and precise. 

[22:14] Bezos seemed to love the idea of the nonstop workday. 

[22:23] The rest of Wall Street saw D. E. Shaw as a highly secretive hedged fund. David Shaw didn't view the company as a hedge fund but as a versatile technology laboratory who could apply computer science to different problems. 

[25:51] Web activity had grown that year by 230,000%. Things just don't grow that fast Bezos said. It's highly unusual and that started me thinking what kind of business might make sense in the context of that growth? 

[31:59] He swept me off my feet. He was so convinced that what he was doing was basically the work of God and that somehow the money would materialize. The real wild card was, could he really run a business? That wasn’t a gimme. Of course, about two years later I was going, Holy shit, did we back the right horse!

[34:05] Bezos plowed through them at a rapid clip, looking for someone with the same low regard for the usual way of doing things that Bezos himself had.

[34:46] Bezos looked right at Schultz and told him We are going to take this thing to the moon!

[35:16] Jeff was always a big believer that disruptive small companies could triumph. 

[35:55] I think you are underestimating the degree to which established companies will find it hard to be nimble or to focus attention on a new channel. 

[36:45] I brought him very bad news about our business and he got excited. 

[37:28] I think our company is undervalued. The world just doesn't understand what Amazon is going to be

[39:30] Bezos had imbibed Walton's book thoroughly and wove Walmart's founder's credo about frugality and a bias for action into the cultural fabric of Amazon. 

[44:54] We were all running around the halls with our hair on fire thinking What are we going to do? But not Jeff. I have never seen anyone so calm in the eye of a storm. Ice water runs through his veins. 

[53:20] Bezos met Jim Sinegal, the founder of Costco. Sinegal explained the Costco model to Bezos. It was all about customer loyalty. I think Jeff looked at it and thought that was something that would apply to his business as well. Sinegal doesn’t regret educating an entrepreneur who would evolve into a ferocious competitor. I’ve always had the opinion that we have shamelessly stolen any good ideas

[57:45] Perhaps Amazon’s founder realized he owed Sinegal a debt of gratitude, because he took the lessons he learned during that coffee in 2001 and applied them with a vengeance.

[59:37] He just never stopped believing. He never blinked once

[1:00:09] Slow steady progress can erode any challenge over time.

[1:01:40] Communication is a sign of dysfunction. It means people aren’t working together in a close, organic way. We should be trying to figure out a way for teams to communicate less with each other, not more.

[1:04:43] Like a warlord leaving the decapitated heads of his enemies on stakes outside his village walls, he was using the mounts as a symbol, and as an admonition to employees about how not to behave.

[1:06:29] I want you to understand that from this day forward, you are not bound by the old rules.

[1:12:46] I think the thing that blindsided Jeff and helped with the Kindle was the iPod, which overturned the music business faster than he thought.

[1:14:27] Bezos is not tethered by conventional thinking. What is amazing to me is that he is bound only by the laws of physics. He can’t change those. Everything else he views as open to discussion.

[1:15:01] Bezos learned that Zappos was advertising on the bottoms of the plastic bins at airport-security checkpoints. They are outthinking us! he snapped at a meeting.

[1:16:15] Companies that make things and companies that sell them have waged versions of this battle for centuries.

[1:19:04] Every anecdote from a customer matters. We research each of them because they tell us something about our metrics and processes. It’s an audit that is done for us by our customers. We treat them as precious sources of information.

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#179 Jeff Bezos

Introduction

In January 2013, eight months before her death, I received a lengthy e-mail from Joy Covey. She had been generous with her memories and insights as I crafted the first two chapters of this book and was wondering how my writing was progressing. She was reading the Steve Jobs biography by Walter Isaacson and was thinking about how Bezos' leadership style compared to the late Apple cofounder's famously direct demeanor.

When I rediscovered Covey's e-mail after her death, I was struck by its thoughtfulness and eloquence. Here, it is, lightly edited for clarity. Hello, Brad. I've been wondering how your writing is coming along. Also, I thought of your project and Jeff while beginning the Jobs biography recently. I found myself thinking about what it takes to accomplish things as big as they both did when a lot of what you're doing is unconventional.

It may very well be that the absolute intensity of drive and focus is essential and incompatible with all the nice management thought about consensus and gentle demeanor. I think about how effective and quick Jeff was and how important it was that he didn't slow down too much or modify his ideas to make others feel comfortable.

I think about the early days and the level of clarity, vision, potential, and values that Jeff brought. And then I look at Amazon today and reflect on some of those conversations I had with him in the intervening years. It's easy to draw a straight line from the vision he had back then to the Amazon of today. I don't know any other company that has created such a juggernaut that is so consistent with the original ideas of the founder. It's almost like he fired an arrow and then followed that arc.

Can we really think of any other company approaching Amazon's size or age that continues to move forward with the boldness, risk-taking, innovation, and the long-term perspective that Amazon shows? Just clarity, intensity of focus, and ability to prioritize is unusual and behind his ability to keep leaping forward versus protecting existing ground. Seeing the future, he put in place the critical DNA that would help the whole company embody his vision. His focus was on very bright, high-growth potential and fluid-minded people with the right values as builders. He looked for people that absolutely prioritized customer trust and delight who at all times were long-term focused and driven to be bold and innovative.

All of this was lived and modeled every day by Jeff and the senior team. Personal wealth was never discussed or really thought about. I see companies these days where thoughts of exits are foremost in the minds of top management and Board. And it is so clear that this value will infect the decision-making down to the smallest choice by the most junior employee. Do we create something that is good or just something that seems good and might get us acquired or funded?

At Amazon, it was always abundantly clear what the goals and values were. And as I reflect on discussions and decisions throughout my time there, it's easy to imagine how different so many small choices might have been otherwise. We talked a lot about whether Jeff was difficult to work with, yet Jeff attracted people like me who really needed to work on things they can internalize and adopt as a mission, who had to leave the path they thought they were on and who poured their hearts and souls and best efforts into building Amazon. We believed in what we were building and felt that our very best was needed to have the hope of accomplishing the enormous potential ahead of us.

Jeff's style always read as completely pure, all focused on the best outcomes for Amazon and our customers. As I read the Jobs book, I really had to wonder if that intensity isn't an essential element when so much of what you want to do requires boldness, immediacy, ruthless prioritization, and risk. It seems counterintuitive to everyone who has pursued traditional corporate goals in the past.

I even had an insight and question about myself that maybe I haven't begun to really find my own limits since I have not, aside from those times of highest stakes and intensity at Amazon, really run free following my own insights and directions without being too accommodating of others. I think Jeff is one of the most capable and effective founders ever. And I think the Amazon juggernaut is still in its early stages. Cheers, Joy.

That is an excerpt from the book that I just reread, which is The Everything Store: Jeff Bezos and the Age of Amazon and is written by Brad Stone. So I read this book about two and a half years ago. Originally, it's Founders #17. And the reason I'm rereading it, there's two reasons. One, great books should be reread because the book stays the same, but you change. And I've read, what, 160-something biographies since -- of entrepreneurs since then. And two, because Brad Stone, the author, is writing a sequel. He's releasing a sequel to this book. It's called Amazon Unbound. It is going to be released next week, I think.

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