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In 2021 Amazon had a net income of 33.36 billion dollars.
How did Amazon’s simple beginnings as an online bookstore become the company it is today?
That’s what Brad Stone sets out to explain in their book The Everything Store: Jeff Bezos and the Age of Amazon. This book details Jeff Bezos’s life and how his startup evolved into one of the world’s most valuable brands.
Brad Stone: The Man Behind the Book
Brad Stone is an American journalist and New York Times, bestselling author. He’s a senior executive editor of global technology at Bloomberg News. He oversees over 60 reporters and editors. They all cover young businesses, technology, and internet trends around the world.
During his time at Bloomsberg, he has authored over 24 cover stories on major tech companies. Some of these companies include Amazon, Apple, Google, and Facebook.
Brad Stone’s writing also covers the Chinese internet juggernauts Didi, Baidu, and Tencent.
He has also written several books. His most recent is Amazon Unbound: Jeff Bezos and the Invention of a Global Empire.
He hasn’t only written about tech giants. Stone covers the rise of start-ups and their effects on the world in The Upstarts: How Uber, Airbnb, and the Killer Companies of the New Silicon Valley are Changing the World.
He also discusses the history and rise of robotic sports in Gearheads: the Turbulent Rise of Robotic Sports.
Brad Stone has covered Silicon Valley for well over a decade. He continues to live in San Francisco with his family.
The Everything Store: A Summary
Brad Stone has covered Amazon and Jeff Bezos since the early days of the now formidable company. In The Everything Store, he draws upon his writing experiences. Along with interviews, and discussions with top Amazon executives.
The book details a comprehensive look into the growth of Amazon, from its creation in 1996 to 2013.
It begins with an introduction to Jeff Bezos’s early life. Covering his upbringing to describing his early showcasing of talents and idiosyncrasies. Stone goes on to detail his rise at D.E. Shaw and his leaving the company to follow his dreams about the internet boom.
The Everything Store goes on to describe the simple beginnings of Amazon, books. And, with Jeff Bezos at its head, it explains why and how Amazon became what it is.
StoryShot #1: The Beginning of an Empire
The main reoccurring idea of the internet boom in the 1990s was “get big fast.” It was no different with Jeff Bezos and Amazon.
The Regret Minimization Framework
At 29 years old, Jeff Bezos quit his lucrative job at D.E. Shaw & Co, a multinational investment management firm.
His next move? Joining the Internet boom, one way or another.
How did he do that? By starting an online bookstore?
Amazon, though, was never going to stay an online bookstore. As Bezos learned about the internet and its potential, the idea of an “everything store” came to mind.
After research and planning, Bezos decided that books were a perfect starting point. The initial dream or goal was to stock more books than any other publisher. Thus, Amazon was born, a start-up boasting its difference from other companies.
While Bezos was figuring out how to join the business world of the internet, he came up with the “regret minimization framework.” In the first chapter of the book, The House of Quants, Bezos describes what this means.
He states that at 80, he wouldn’t think about the nuances of walking away from his job at D.E Shaw & Co. But he knew he would regret not participating in the internet, a thing he knew would be a revolutionary event.
Thanks to this mindset, Bezos explains that his decision to join the world wide web was very easy to make.
Books Upon Books
Why did Bezos start with books, though? Well, he describes them as “pure commodities.” A book in one store was identical to a book in another, so the customer always knows what they are getting.
Books were an easy way to establish good customer satisfaction.
They were also a gateway to what Bezos always wanted Amazon to be, an everything store. Books could capture the essence of a massive product range while catering to niche markets.
Even better, there were only two book distributors at the time. This meant a new retailer wouldn’t need to approach the many book publishers.
On top of that, there were over three million books in print worldwide at the time. Far more than any other retailer, like Barnes and Noble, could stock.
While online bookstores weren’t a new concept, Bezos aimed at bettering what was already available.
Along with the main idea of “get big fast,” the idea of “do things better than anyone else” was there too. Bezos discovered that no other online bookstore shipped books safely.
With doing things better than others, comes usurping the existing competition. This was another goal of Jeff Bezos, and in turn, Amazon.
Once the bookstore aspect of Amazon became successful, Bezos set his sights on other products. All in the hopes of finally creating an everything store. He planned a growth structure that would lead him closer to his dream.
Following their growth period, Amazon introduced an onsite application called Similarities. This app created customer recommendations based on their buying habits. Similarities created happier customers and more revenue.
While not profitable at first, Amazon grew fast. The Amazon team recognized the potential of eBay, and while a deal didn’t work out, Bezos did get an idea. The “1-Click” process. This allows customers to buy products in one click. It made Amazon’s goals of customer satisfaction and quick sales easier to reach.
Amazon made its mark in 1999. Its customer base grew to 3 million, resulting in a massive 95% increase in sales.
StoryShot #2: Striving Through the Dot-Com Bust
While Amazon grew exponentially in the late 1990s, they weren’t safe from the dot-com bust. Thanks to Y2K concerns and the inconsistent stock market, many online companies crashed. The economy also began declining.
But, in the height of the recession and the dot-com bust, Amazon survived. They were able to sell several convertible bonds worth $672 million to investors. Bezos also restructured Amazon to follow the models of other successful companies. Walmart and Costco were his inspirations.
He collaborated with Toys “R” Us to increase its customer base, instead of annexing them. Further, Amazon’s new motto became frugality – with cutting all possible costs a top priority.
As a result, Amazon stopped all its marketing campaigns. They believed their products should speak for themselves. And one way Amazon did this was by slashing prices. Low prices became their new marketing strategy. It worked, resulting in an ever-growing customer base.
One product that particularly helped was the Harry Potter books. Bezos sold them at discounted rates, despite the company incurring losses.
The success of discounting prices became a long-standing growth strategy at Amazon.
Cutting costs and lowering prices weren’t the only things that kept Amazon afloat, though. Bezos’s work ethic and intolerance for incompetence are well known. So is his ruthless, relentless nature. It’s this nature that allows him to strive for success, no matter the cost, like Steve Jobs.
Thanks to this formidable need to succeed, Bezos managed to keep his company going. One of the ways he did this was through what he called, “chaos theory.”
StoryShot #3: The Chaos Theory
Once the dot-com bust passed, Amazon began to venture into new categories. But thanks to their “get big fast” ideal, Amazon struggled with collaboration issues. Many employees suggested more meetings were necessary to fix the issues at hand.
He believes that communication is a defect in companies. Leadership, according to Bezos, should be determining ways to communicate less, not more. This would result in employees organically understanding their requirements and roles.
As a result, Amazon relied on software to increase efficiency across the board, including in their warehouses. The idea wasn’t to quit distribution but re-invent it.
Amazon’s internal ethos mirrors Bezos’s. Many of his own values are instilled within the company. For example, he banned PowerPoint presentations. Instead, Bezos encourages people to write down and use narratives when giving presentations.
A core belief within Amazon is impeccable customer service. This was achieved, and as a result, Amazon was seen as a combination of Walmart and Nordstrom.
But customer satisfaction is never ending. Hence the quick introduction and development of “Prime.” If you don’t know what “Prime” is, it started as an expedited shipping option. This way customers could get their products quickly, albeit at a slightly higher price.
Bezos and Amazon didn’t only strive to make things easier for customers though. With the increased product range, came more merchants. So, Amazon introduced a service called “Fulfilment.” This allowed merchants to store their products in Amazon warehouses. “Fulfilment” – allowing Amazon to handle storage and shipping to customers.
StoryShot #4: Not a Retailer
Amazon has always fought to be a formidable force in the retail sector. But being a retailer has always been an afterthought to Bezos. But, despite its success as an internet phenomenon, it’s often considered just a retailer. It’s seen as second to technological giants like Google and eBay.
Bezos though always insisted that Amazon was an e-commerce company that paved the way for technological advancement.
Throughout its growth Amazon introduced various features and services that back this core belief. The service Mechanical Turk, which launched in 2005, is a prime example. It is a crowdsourcing website under Amazon. Mechanical Turk is for businesses wanting to hire remote workers to perform tasks computers can’t.
Additionally, Amazon’s Search Inside the Book feature was a game changer. This futuristic feature gave customers a short preview of the book on Amazon’s website, allowing them to flip through. Giving customers a “real-life experience.”
StoryShot #5: Always Overcoming Hurdles
Toys “R” Us was part of why Amazon succeeded through the dot-com bust in 2000. But would, unfortunately, become another hurdle for Amazon to overcome in later years.
Toys “R” Us took Amazon to Federal Court over exclusivity rights on the website. They wanted an exclusive section on Amazon, which also sold toys and products from other popular toy companies.
While Amazon refused, the company still had to fork out $51 million to settle the lawsuit.
To overcome hurdles and stay ahead, Bezos devoured several education books. Most focused on running businesses and being an entrepreneur.
He applied everything he learned to Amazon. Insisting it had lesser margins, and thereby continued to catch the attention of competitors.
StoryShot #6: Amazon is Still About Books
Despite moving away from selling books and achieving Bezos’s dream of having an everything store, Amazon continued to focus on books. Books were the reason for Amazon’s initial success, so it would be odd for them to be set by the wayside.
But Bezos recognized that there was a potential new market regarding books and reading. Being a ferocious reader himself, he recognized a new demand. eBooks.
He noted that the niche eBook market hadn’t been tapped yet. Bezos was also still in the fight to prove that Amazon was a tech company. So, he and his executives began working on the Fiona project – a project that would help customers read eBooks on the move.
During this time, Amazon was renegotiating deals with publishers for the betterment of both parties.
Queue the Kindle.
These negotiations allowed Amazon to introduce the Kindle – code named Fiona – to publishers. However, they weren’t impressed by it. The first impressions showed a lack of design and color, and it had a host of technical issues.
But Bezos pushed through. He recognized that eBooks were inherently a cannibalization of Amazon’s book business, but he knew that’s where the future was heading.
Despite the glitches, the Fiona project sped up. Especially after the introduction of iTunes and the Apple iPod. Bezos would rather cannibalize his own products than allow competitors like Apple and Google to do it for him.
The Kindle was much improved, with several changes and fixes, and was finally unveiled to the world. It cost $399 and is marketed as the perfect new tool for readers.
StoryShot #7: Cannibalizing the Competition
Despite its ongoing success, more hurdles were on the horizon for Amazon. In 2007 its stock market value increased by 240% but fell back down thanks to the global recession.
To combat this, Bezos maintained his approach of cannibalizing completion. He assembled a team that would constantly scan for competition. If this team found a company that sold products for less than Amazon, Bezos would find ways to one-up them.
How Amazon dealt with Zappos is a prime example. Zappos was a new company that made waves in the apparel and shoe categories. To contend with this up-and-coming competitor, Bezos launched a new website under Amazon’s banner – Endless.
Endless focused solely on clothes, shoes, and accessories. It was incredibly cheap and had free returns and overnight shipping. Zappos struggled to stay afloat. In 2009, Amazon bought them out for $900 million.
These tactics continued to work. Amazon went head-to-head a few years later with a company called Quidzi. Its products targeted mothers, and they offered free shipping.
Amazon responded by selling diapers that matched Quidzi’s rates. This resulted in major revenue fluctuations for the company. Amazon continued to undercut them by selling diapers even cheaper than Quidzi. It ultimately turned into a war of attrition.
Eventually, Quidzi could no longer sustain its business and was acquired by Amazon for $540 million.
StoryShot #8: The Kingdom of the Question Mark
By 2012, Amazon had begun looking very much like an everything store. It had an imprint in almost every retail category, including industrial supplies. Amazon had also expanded its range to include wine, art, and apparel.
As part of his research, Brad Stone tracked down Ted Jorgensen, Bezos’s biological father. Bezos was separated from his father when he was 3. Many attribute this trauma to Bezos’s general nature and constant need to succeed.
When Stone managed to track him down, Jorgensen was working in his own successful business, a bike store. Surprisingly, he had no idea that his son was so successful. He began attempting to contact Bezos after he found out.
Bezos maintained his silence after receiving several emails from Jorgensen. However, after some time, he sent a mail to Ted’s son to put his father’s mind at ease.
Despite these personal issues, Bezos and Amazon continued to thrive and succeed. He and his company are famous for their confrontational natures. This is all thanks to Bezos’s belief that the best ideas happen when they’re banged against each other, even when it’s violent.
Because of this nature, however, the work environment within Amazon is not for everyone. While some employees thrive in this high-pressure atmosphere, many don’t. Several employees have complained about the highly volatile atmosphere, but many others have praised it. Some even state they love the various opportunities to learn.
Unfortunately, unhappy employees also found it combative to leave the company. In its quest to trump competition, Amazon wasn’t above threatening legal action against employees who left to work for a competitor.
While the harsh environment resulted in an exodus of employees, it never seems to hurt Amazon. In 2012, their ranks reached a whopping 88,400 full-time and part-time employees.
StoryShot #9: It’s Harder to Be Kind Than Clever
While he is ruthless and relentless, Bezos is known to also have a compassionate side. From a young age, he understood the value of kindness. Especially after his grandfather stated that it was much harder to be clever than kind.
However, thanks to his need for success, Bezos has always looked toward the stars. Both metaphorically and physically.
As he grew older, Bezos became more and more interested in space exploration. As a result of this passion, he established another company, Blue Origin, which focuses on space research.
While Blue Origin was established during a time of financial struggles, Bezos didn’t put his passion to rest. He continued hiring new people because Amazon taught him that persistence and patience could change the game and lead to success.
The Key Takeaway of the Everything Store
Bezos’s goal of an everything store has, without a doubt, been achieved. Many considered Bezos a genius from a young age and recognized his ambitious outlook on life. His nature allowed Amazon to get to where it has gotten today.
Bezos believed that online shopping shouldn’t be an inconvenience and he instilled many of his core beliefs into the business. From frugality to his outlook toward competitive businesses.
Throughout Amazon’s rise, Bezos managed to usurp as much competition as he could. He did so through various means, from cutting prices to buying out companies. No matter what the company sold, Amazon could do it better. From online apparel stores to websites selling baby items.
Bezos focused on creating an effective shopping and delivery experience. They streamlined their distribution services and made their website as user-friendly as possible. They also created new bots and software to better the experience for all. One is their “1-Click” process.
But Bezos also recognized the need to grow and evolve. Despite Amazon starting as a bookstore, he knew customers were becoming more tech-dependant. So, he developed the Kindle. Bezos believed that Amazon should evolve to usurp itself. Before other companies, like Apple, did it for them
― Brad Stone #theeverythingstore
Натисніть, щоб твітнути
― Brad Stone #theeverythingstore
Натисніть, щоб твітнути
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