Business lessons from Jeff Bezos
Even if it was for a day, or less he made history by upstaging Bill Gates as the world’s richest man. That was at the end of July 2017. Indeed, when he clinched the prestigious TIME Magazine’s Man-of-the Year award at the turn of the century, back in December, 1999, Jeffery Preston Bezos was worth a hundred million dollars ($100 million). But now his net worth is a whopping $86.7 billion!
Also noteworthy is the fact that as at 1999 Bezos was 35 and ranked as the fourth youngest individual, behind Charles Lindberg (25), Queen Elizabeth 11 (26), Martin Luther King Jnr. (34) to be so honoured. Described as “the king of cyber commerce,” what matters to us are the lasting lessons to glean from his phenomenal rise to the top rung of the global corporate ladder with a short span of 18 years? Just how did it begin to roll, for Bezos?
As typical of most successful entrepreneurs over the decades, it all started with a flicker of the light of an IDEA in the dark. Yes, a veritable idea many would have glossed over. It was on a summer day in 1994 that the young Bezos decided to quit his otherwise lucrative job at a New York investment firm, packed up his belongings and with his wife, Mac Kenzie driving headed to Seattle buoyed with the idea to sell books, music CDs and videos over the internet. Let us recall that smart business men such as Bill Gates and Mac Zukerberg, whose companies are currently breathing down the neck of Bezos’ Amazon.com similarly took the decision to leave either school or their businesses to start off on their own. What does that teach us all? The COURAGE TO START the business always does it. Winners do not wait for conditions to be perfect before delving into the murky waters of business.
As usual too, other investors who heard about selling products over the internet thought Bezos must be crazy! Long before him, Edwin Land was told by his friends that the idea of creating an instant Polaroid camera was off the mark. But he did not listen to them. Only some six months after they tried to discourage him he showed them the product of his fecund imagination. His Polaroid instant camera went on sale in late 1948 and made it possible for a picture to be taken and developed in 60 seconds or less.
It was ditto for Wilbur and Orville Wright brothers. They cared less for the sneers and jeers of their detractors when on December 17, 1903 they made four brief flights at Kitty Hawk with their first powered aircraft. The Wright brothers had invented the first successful airplane! Entrepreneurs who would succeed are not easily discouraged.
Unknown to the naysayers, Bezos had peered into the intricate maze of the World Wide Web and saw the future of retailing literally exploding right before him. It was similar to far-sighted minds before him, much like Cornelius Vanderbilt saw the railroads coming up or Thomas Watson saw the huge potentials in computers adorning offices and homes. Mark you, that Bezos was not the only man to see the vast opportunities inherent in e-commerce, or what TIME magazine dubbed ‘the power of electrified commerce.’ No. Pierre Omidyar of e-Bay noticed it too. But it was Bezos who took up the gauntlet and went for the kill. He did not wait or dither to seize the moment. That is another hallmark of successful men such as Conrad Hilton who wasted no time after enjoying his stay in a cozy hotel to diversify his business to the hospitality industry.
That year alone (1999), Americans spent $15 billion buying consumer goods online. U.S. businesses jerked up by $109 billion and boasted a retail market worth a staggering $2.7 trillion! As Americans spend $5 billion online exchanging Christmas gifts, Bezos known for his characteristic, explosive laughter smiled all the way to the bank, as his Amazon.com stock price soared to $94.
In fact, critical observers agreed that part of Bezos’ instant success in e-commerce was because he got his company starting up on a sound footing with a thorough thinking through. “His online retailing universe was so complete, so elegant and appealing, that it became from Day One the point of reference for everyone who has anything to sell online.” Like Steve Jobs (of blessed memory) would enthuse it always pays to get one’s business right from the outset.
Another salient factor that defines the ship of a successful business is for the pilot not to be confounded or overwhelmed by the storms that would naturally escalate along the course of the journey. There may be hurdles along the path of growing one’s business. For instance, experts on the U.S. economy told Bezos that he could lose as much as $350 billion in the first year alone but he was unfazed by it all. He told them instead that he foresaw the profitability of selling books, CDs and videos and just one year after, in 2000 he was proved right. As John Harold Johnson, the late publisher of Ebony magazine has rightly noted: “The higher the obstacles we overcome, the greater the glory.” How true.
An additional advantage that Bezos knew and latched on was THE POWER OF INFORMATION. Within the matrix of the fast evolving global market, whoever has more credible information on its dynamics at his fingertips and acted on them stands to win. For instance, when one buys any of the products available on Amazon.com there is information for him or her to know exactly what previous buyers thought about it. The popular site gives the latitude of rating the quality of products.
As the company grew, Bezos PREPARED FOR COMPETITION from others such as Adornis.com that sold luxury items, Buy.com, Shopnow.com, Home Groceries.com and Della.com that sold wedding materials. By lowering the prices of products just like Sam Walton did he drove more customers to Amazon.com. And to cut off completion from those who would sell lower he formed ‘Marketing Clubs’ for which each member pays $30 a year, providing more access to the site’s rich data and technology. That is INNOVATION.
With his EYES FIXED ON THE FUTURE Bezos meticulously planned for expansion to include other items. These are cars, washing machines, model airplanes and rubber gaskets, except firearms and some live animals. Beyond products Amazon delved into services such as banking, insurance and travels.
Now, the king of cyber commerce is laughing all the way to the bank. You must have learnt a lesson or two from him, haven’t you?
• Baje, a public affairs analyst and author, wrote from Lagos.