On July 4 weekend, Jeff and MacKenzie flew out to Fort Worth,
Texas, bid goodbye to his family and headed for Seattle--a city
near one of the two big book wholesalers and chockfull of the
kinds of Net-savvy people he'd need to hire. MacKenzie drove a
1988 Chevy Blazer that Mike Bezos donated, while Jeff tapped out
a business plan on a laptop. On that road trip West, somewhere
near the Grand Canyon, Bezos called a lawyer who specialized in
start-ups. What do you plan to call your company, the lawyer
asked. Bezos liked the sound of Abracadabra, but the word was a
little long. "So I said, 'Cadabra,'" he recalls. "Cadaver?"
repeated the lawyer. A few weeks later, Bezos changed the name to
Amazon Inc., after the seemingly endless South American river.
The most important person Bezos hired was probably the first:
Shel Kaphan, a brilliant programmer in Santa Clara, Calif., and
veteran of a dozen start-ups, many of them, in fact, failures.
Bezos persuaded him, over the course of a few months, to join his
company in Seattle.
His "company" was headquartered in a modest two-bedroom home that
Jeff and MacKenzie rented in Bellevue, a Seattle suburb. They
converted the garage into a work space and brought in three Sun
workstations. Extension cords snaked from every available outlet
in the house to the garage, and a black hole gaped through the
ceiling--this was where a potbellied stove had been ripped out to
make more room. To save money, Bezos went to Home Depot and
bought three wooden doors. Using angle brackets and 2-by-4s, he
hammered together three desks, at a cost of $60 each. (That
frugality continues at Amazon to this day; every employee sits
behind a door desk.) MacKenzie agreed to work with the crew a few
days a week, helping out with accounting and interviewing--the
latter chore often conducted, cheekily, in a nearby Barnes &
By June 1995 a rudimentary website had been created on a hidden
site (www.amazon.com:99, now defunct), and 300 friends and family
members were sworn to secrecy and invited to crash-test it. "The
first time I saw the site, I said to myself, 'Wow, this is it,'"
recalls Shaw. It was simple, functional and wonderful. Kaphan's
code was incredibly elegant and streamlined, allowing pages to be
delivered without delay.
On July 16, 1995, Amazon.com opened its site to the world. Bezos
simply told all 300 beta testers to spread the word. During the
first 30 days, without any press, Amazon sold books in all 50
states and 45 other countries. "Within the first few days, I knew
this was going to be huge," says Bezos. "It was obvious that we
were onto something much bigger than we ever dared to hope."
The company grew and grew and grew. It grew so fast that it
surprised him how little he knew. "No plan survives its first
encounter with reality," he says. One night, while Bezos was on
his knees complaining about how sore he was from packing, he said
to a co-worker, "You know what we need? Kneepads!" The employee
looked at him like he was an idiot. "What we need," the co-worker
said evenly, "is packing tables."
In May 1996, Amazon landed on the front page of the Wall Street
Journal. The story did two things: it introduced Amazon to a
whole new stream of customers, and it caught the attention of
rivals like Barnes & Noble and Borders Group, which hadn't yet
moved online. Barnesandnoble.com would appear a year later--just
before Amazon's initial public offering, which went off at a
modest $18 a share. Never mind that the celebrated
venture-capital firm Kleiner Perkins Caufield & Byers was its
biggest institutional investor before the ipo. Wall Streeters
were afraid of the threat posed by the giant Barnes & Noble,
whose national network of bookstores looked unbeatable, prompting
George Colony, president of Forrester Research, a prominent
technology-analysis firm, to pronounce the company
"Amazon.toast." Other naysayers referred to it as
"Amazon.org"--".org" being a domain name reserved for nonprofit
companies. But Barnesandnoble.com did nothing to stall Amazon's
The stock began to move too, propelling Bezos' personal wealth
into the tens of millions, then into the hundreds of millions.
And then, when analyst Henry Blodget, now with Merrill Lynch,
said he believed Amazon was a $400-a-share company, Bezos became
another Rockefeller. As of last week, his shares were worth $10.5
Ah, but money... Who cares about that? Bezos has cashed in less
than $25 million worth of his stock, but that's enough to live
well on, come what may. He and his wife live in a sprawling,
single-story modern home in the suburbs north of Seattle.
Bezos is beyond talking about his wealth or whether Amazon will
be successful. Instead, he talks about a "nirvana" state of
consumer service, in which you'll come to Amazon, and the one
thing you've been looking for all your life will be featured on
the page that day. You may not even know you've been looking for
the thing or that it even exists, but since the site is so
familiar with your consumption habits, it knows.
If the world goes his way, Bezos could become even richer than
his neighbor Bill Gates. Then what? "At some point," he says,
giving MacKenzie a hug as the two of them stand around in the
kitchen, "we want to figure out how to do philanthropic work
that's highly leveraged. It's very easy to give away money
ineffectively. But doing it well requires at least as much
attention and energy as building a successful company."
He says the trick to solving some of the world's problems is to
think, Amazon-like, in the long term. "Say you want to solve
world hunger. If you think in terms of a five-year time frame,
you get really depressed; it's an intractable problem. But if you
say, well, let's see how we could solve this in 100 years--it's a
problem because you'll be dead by then, but the solution becomes
"Anyway," he adds quickly, self-deprecatingly, in probably the
same way he told people his start-up had only a 30% chance of
success, "it'll be a long time before we build a lasting
company." And then he laughs and laughs and laughs.
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