So Jeff Bezos is now worth over $100bn! But how did this happen? In this article, we take a look at Bezos’ long journey to the top, which has involved several shrewd business dealings, risks, luck, and a whole lot more. Bezos serves as CEO, and was the founder of Amazon – the world’s largest online shopping retailer. The site has gone from a book-selling merchant to sellers of all manner of multimedia – recently branching out into the likes of video, audio and cloud infrastructure. Bezos himself purchased The Washington Post in 2013. So, let’s take a look at the life of Bezos.
We begin the story back in 1986, when a certain Jeff Bezos had graduated from Princeton University with a Bachelor of Science in Electrical Engineering and Computer Science. Over the next eight years, Bezos went from job-to-job, working in a range of fields from Computer Science to banking. He left a lucrative Hedge Fund role to pursue his Amazon creation. In 1994, during a cross-country drive across the US, Bezos fine-tuned the Amazon business plan. Then, the revolution began.
A U.S. Supreme Court ruling altered the rules around tax for mail order companies in 1994. If a business didn’t have a physical presence in that state, many taxes would no longer be relevant to them. Bezos took advantage of this, founding ‘Cadabra Inc’ in 1994, using his garage. His parents invested $300,000 into Amazon at the beginning, which proved hugely helpful in dealing with the start-up costs associated with a project like Amazon. The name of the business would change from Cadabra to Amazon within a few months, due to Bezos’ lawyer mishearing the name as ‘Cadaver’ – of which there are negative connotations!
The story of Amazon’s rise has been written many times, so we won’t go into detail. Amazon started with books, with Bezos using his relationship with a wholesaler to buy in bulk. While shops would only have limited shelf space, Amazon’s nature meant they had infinite stock. Within 2 months of launching, Amazon sold products to customers in almost 50 countries, and every single state in the US! Despite razor-thin margins and an unconventional business plan, Amazon secured an Initial public offering (IPO) in 1997, before surviving the infamous dot.com bubble burst, then posting a profit for the first time in 2001. From there, Amazon has gradually become a behemoth.
Bezos has been at the heart of this, and he calls the shots at Amazon. The recent Whole Foods acquisition means that adding physical brick-and-mortar stores might not be a too distant prospect for Amazon. Amazon Fresh has been gathering pace, while the Amazon Prime package looks destined to succeed. Other areas include cloud, Amazon Music, Amazon Prime Instant Video, Amazon Drive, Alexa, Fire TV and the Kindle range. Amazon’s portfolio is enormous, and Bezos continues to be in control.
Aside from Amazon, Bezos has also made several sensible business moves. He founded ‘Blue Origin’ in 2000, stating his aim was to let ‘anybody’ to go into space – something still ongoing. He purchased The Washington Post in 2013, though Bezos hasn’t made wholesale changes yet. Oh, and Bezos was one of the first investors in Google – putting in $250,000 in 1998 – receiving shares that are worth $3bn today. His personal investment company – Bezos Expeditions – have made many investments into young businesses that have turned into big companies – like Airbnb, Business Insider, Stack Exchange, Twitter and Workday.
There is of course considerable criticism of both Amazon and Bezos as a manager. But on the charitable front, Bezos has done a lot. He and wife Mackenzie Tuttle recently announced that they would invest $33m in TheDream.US – a site set up to help undocumented immigrants in the US make it to college. Bezos has also made numerous other donations, including those to support same-sex marriage. Critics argue more of his wealth should be used to improve conditions for Amazon employees.
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In 2016, Bezos sold some shares in the Amazon holding company for over $1bn. This along with his existing shares in the company, his position as Amazon CEO, and his other investments, contributes to his $100bn valuation. As the logo of Amazon suggests, they really do sell everything from A to Z. Bezos has come a long way, and there can be no doubting his business dealings. The picture at the top of the article – which shows Bezos in a rather modest-looking office back in 1999, shows that anything is possible.