The Everything Store, Jeff Bezos and the Age of Amazon, by Brad Stone tells the story of how Amazon became what it is today. The book mainly focuses on the growth of the company and the culture of the company.
Bezos first came up with the idea of ‘the everything store’ while working at D. E. Shaw. When he looked further into the idea of ‘the everything store’ he decided to leave D. E. Shaw and turn this idea into a reality. At first there were only two people working on what would become Amazon.com in what they referred to as the ‘pre-startup phase’, Jeff Bezos and Shel Kaplan.
Bezos decided they had to start with selling one singular category and grow from there. He decided on books since “they were pure commodities; a copy of a book in one store was identical to the same book carried in another, so buyers always knew what they were getting” (25). Once the company started to grow, it expanded to selling DVDs, music and toys. However toys brought up a issue for Amazon since they had no way of predicting the amount they would sell, the first few years they ended the holiday season with millions of excess inventory. It was not until Bezos was able to partner up with Toys R us that this problem was solved. This partnership entailed combing Toys R us’ talents in choosing the right toys and right amount for each season with Amazon’s expertise of running online retail business. (it is important to note this partnership is no longer in place). Amazon continued to grow and quickly expanded into selling more categories of goods.
But Bezos did not want Amazon to be seen as a retailer, he wanted it to be a technology company. This sparked the invention of Amazon Web Services, which allows other websites and developers to store computer files on Amazon’s computers (220). Amazon once again proved itself to be a technology company with one of their biggest developments, the Kindle. Inspired by the way Apple was able to use iTunes to capture the majority of music sales, Bezos wanted to use the Kindle to do the same with books. Amazon then began diving into the other categories like clothing, shoes and more, while simultaneously improving their past accomplishments.
Of course, Amazon had its struggles; harsh critics, poorly managed distribution centers, disagreements with publishing agencies over the pricing of e-books, and much more, but inevitably all the issues were manageable. Jeff Bezos always kept calm when there was an issue, an important characteristic that allowed for these issues to be resolved. A senior vice president at Amazon was quoted “I have never seen anyone so calm in the eye of a storm” (102).
While this book mainly focused on the ways in which Amazon grew to be ‘the everything store’ over time. It also mentions the culture of the company and how employees felt about working for Amazon. First, Bezos’ lack of loyalty to his employees was surprising, this specifically showed towards Amazons beginning. Shel Kaplan, who some people consider a co-founder of Amazon, was the first person to work on Bezos’ idea with him, way back when they started the company in a garage. However when the company grew Bezos made it clear to Kaplan that “Amazon had only one true parent”(64) when Jeff, despite telling Kaplan the job was his until he no longer wanted it, essentially forced him to retire from the company. Second, Stone mentions how Bezos was fixated on employing only the brightest minds. While interviewing employees he would ask them impossible questions such as “how many fax machines are there in the US?”, not expecting an answer, but so he could see how they approach the question and attempt an answer (44). He expected all new employees to “directly improve the outcome of the company”(168). Third, It is also stated that Bezos is known to be “prone to melodramatic temper tantrums” that are triggered by “a colleague failing to meet Bezos’ exacting standards” (176), which made for an unpleasant environment. Bezos also expected his employees to prioritize their work at Amazon over other things, and “didn’t believe in work-life balance” (89). Creating a rather intense work environment for all employees.
Diving Deeper: Prioritizing the customer
One of Amazon’s tactics with led to such rapid growth, is prioritizing the customer experience. Jeff Bezos always prioritized the experience Amazon gave the customer, even if it meant losing money or sales in the short term, because he knew in the long term, if customers were happy with Amazon they would be loyal and eventually lead Amazon to become ‘the everything store’ that he originally dreamed about. Bezos, in the early stages of Amazon, was so focused on growth and customer experience, he let the profitability take a back seat. He eventually agreed to focus more on profits when calculations showed continuing at the previous rate would not turn a profit for decades (91). This mentality that profitability was not Bezos’ main priority is a common theme in Amazon’s history. On numerous occasions Bezos advocated to price products in a way that ensured each sale would cause a loss. Bezos always focused on the customer, not the profit. When Amazon began selling toys, Bezos demanded the company purchase $120 million dollars worth of toys because he wanted to ensure that “kids and parents would never be disappointed when they searched for an item on Amazon” and he stated he would “drive [the leftover inventory] to the landfill [himself]” (86). Bezos also made sure Amazon matched the low prices of competitors, this caused issues with suppliers who felt their products were being underpriced, some even took their products off Amazon, but Bezos stayed loyal to pricing all items at the lowest price (305). When introducing the idea for Amazon Prime and Amazon Web services Bezos pushed for discount rates for a better customer experience, even though this meant losing money. Again with the introduction of the first kindle, Bezos priced all e-books at $9.99, when meant Amazon would lose money on each sale (251). Bezos always thought about the long term of the company, he knew building his brand through ensuring customers had a pleasant experience would create a loyal customer audience who returned and eventually depended on Amazon.
Overall The Everything Store, Jeff Bezos and the Age of Amazon was an incredible book. Brad Stone describes in great detail how Jeff Bezos was able to grow Amazon into the company that it is today. I would definitely recommend it to anyone interested in technology startups. Stone also goes into great detail about Jeff Bezos’ early life, before Amazon, and discusses many of the high profile employees at Amazon, and their specific role in the development of the company.