The Everything store sells over $100 billion worth of goods per year

 

Jeff Bezos, founder and CEO of Amazon, is one of the most powerful figures in tech, with a net worth of roughly $57 billion.

Today his “Everything Store” sells over $100 billion worth of goods a year.

Amazon founder Jeff Bezos has made a lot of money for people who bet on his company over the years.
But Bezos told an amazing story in San Francisco on Thursday about the first brave souls who invested in Amazon two decades ago.
According to Bezos, the first 20 or so outside investors in Amazon put in around $50,000 apiece for a stake of a little less than 1% of the company at the time. If those early investors had held on to their entire stakes, and those stakes had never been diluted by later investors, they would be $3.5 billion today — a return of 70,000x.
Bezos also said that previous to that, his parents both chipped in a significant portion of their life savings, which worked out very well for them. “It couldn’t happen to two nicer people,” he said on stage at the Vanity Fair New Establishment Summit.
He explained that the venture capital scene was very different in 1994 when he first started raising money for Amazon.com, which at the time was positioned as a mere online bookstore.
About 20 to 22 investors put in small checks of about $50,000 apiece, he said, for a total seed stage investment of around $1 million. In exchange, those combined investors got about 20% of the company. Most of those investments happened through 1995 and 1996.
Richard Brandt’s book about Amazon, “One Click,” offers a few more details:
“A Seattle-based stock broker named Eric Dillon was interested in investing, but thought the valuation Bezos had put on the company — $6 million — was pulled out of thin air, until Bezos sat down with him to show how much other Internet companies were trying to raise. Dillon talked Bezos down to a $5 million valuation and put in some money. A Seattle businessman named Tom Alberg was impressed with Bezos’s projection that Amazon could turn over the equivalent of an average bookstore’s inventory 20 times a year, compared with 2.7 times for most bookstores — with details to back up the claim.
“In the end [Nick] Hanauer managed to get some commitments by making the first investment himself. Others followed, and by the end of the year another twenty investors kicked in money, most of them around $30,000 apiece. Bezos raised $981,000.”
Later, in June 1996, Amazon raised an $8 million Series A from Kleiner Perkins, and that was its only VC investment before going public.
When Amazon went public in May 1997, the only one of those three early investors whose name was on the S1 was Tom Alberg, who is still director of the company, as well as managing director of VC firm Madrona Ventures. He owned 195,000 shares at the time. Amazon has split its shares three times, all in 1999, so those shares today would be worth about $1.9 billion.

By Business Insider

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The Everything Store

Jeff Bezos' mom, Jackie, was a teenager when she had him in January 1964. She had recently married Cuban immigrant Mike Bezos, who adopted Jeff. Jeff didn't learn that Mike wasn't his real father until he was 10 but says he was more fazed about learning he needed to get glasses than he was about the news. When Bezos was 4, his mother told his biological father, who was a circus performer at one point, to stay out of their lives. When Brad Stone interviewed his father for his book "The Everything Store," the man had no idea who his son had become. Bezos showed signs of brilliance from an early age. When he was a toddler, he took apart his crib with a screwdriver because he wanted to sleep in a real bed. From ages 4 to 16, Bezos spent summers on his grandparents' ranch in Texas, doing farm work like repairing windmills and castrating bulls. His grandfather, Preston Gise, was a huge inspiration for Bezos and helped kindle his passion for intellectual pursuits. At a commencement address in 2010, Bezos said Gise taught him that "it's harder to be kind than clever." Bezos fell in love with reruns of the original "Star Trek" and became a fan of the later versions too. Early on, he thought about calling Amazon MakeItSo.com in reference to a line from Captain Jean-Luc Picard. In school, Bezos told teachers "the future of mankind is not on this planet." As a kid, he wanted to be a space entrepreneur. Now he owns a space-exploration company called Blue Origin. After spending a miserable summer working at McDonald's as a teen, Bezos started the Dream Institute, a 10-day summer camp for kids, with his girlfriend. They charged $600 a kid but managed to sign up six students. The "Lord of the Rings" series made the required reading list. He eventually went to college at Princeton and majored in computer science. Upon graduation, he turned down job offers from Intel and Bell Labs to join a startup called Fitel. After he quit Fitel, Bezos almost launched a news-by-fax service startup with Halsey Minor, who would later found CNET. Instead, he got a job at the hedge fund D.E. Shaw. He became a senior vice president after only four years.

Source: By Business Insider

In 1994, Bezos read that the web had grown 2,300% in one year.

This number astounded him, and he decided he needed to find some way to take advantage of its rapid growth. He made a list of 20 possible product categories to sell online and decided that books were the best option. Bezos decided to leave D.E. Shaw even though he had a great job. "When you are in the thick of things, you can get confused by small stuff," he said later. "I knew when I was eighty that I would never, for example, think about why I walked away from my 1994 Wall Street bonus right in the middle of the year at the worst possible time. That kind of thing just isn't something you worry about when you're eighty years old. At the same time, I knew that I might sincerely regret not having participated in this thing called the Internet that I thought was going to be a revolutionizing event. When I thought about it that way … it was incredibly easy to make the decision." His boss at the firm, David E. Shaw, tried to persuade Bezos to stay. But Bezos was already determined to start his own company, and felt he'd rather try and fail at a startup than never try at all. And so Amazon was born. MacKenzie and Jeff flew to Texas to borrow a car from his father, and then they drove to Seattle. Bezos was making revenue projections in the passenger seat the whole way, though the couple did stop to watch the sunrise at the Grand Canyon. Bezos started Amazon.com in a garage with a potbellied stove. He held most of his meetings at the neighborhood Barnes & Noble. In the early days, a bell would ring in the office every time someone made a purchase, and everyone would gather around to see whether anyone knew the customer. It took only a few weeks before it was ringing so often the they had to make it stop.

Source: By Business Insider

Meanwhile, Bezos took ballroom dancing classes

As part of a scheme to increase his "women flow." Just as Wall Streeters have a process for increasing their "deal flow," Bezos thought about meeting girls analytically. He eventually married MacKenzie Tuttle, a D.E. Shaw research associate, in 1993. She's now a novelist.

Source: By Business Insider

In the first month of its launch,

Amazon had already sold books to people in all 50 states and in 45 different countries, and it continued to grow. Amazon went public in 1997. When the dot-com crash came, analysts called the company "Amazon.bomb." But it weathered the storm and ended up becoming one of the few startups that didn't get wiped out by the dot-com bust. Amazon shares have continued to go up since the crash (until the recent market correction). It has now gone beyond selling books to selling almost everything you could imagine, including appliances, clothing, and even cloud computing services. Jeff Bezos was a demanding boss and could explode at employees. Rumor has it he hired a leadership coach to help him tone it down. Bezos is known for banning Powerpoint presentations at Amazon. Instead he requires his staff to turn in six-page papers on their proposals to encourage critical thinking over simplistic bullet points. He's also known for creating a frugal company culture that doesn't offer perks like free food and massages. In 1998, Bezos also became an early investor in Google. He invested $250,000, which was about 3.3 million shares when the company went public in 2004 — that would be worth about $2.2 billion today. (He hasn't revealed whether he kept any of his stock after the initial public offering). Today, Bezos is worth about $57 billion.

Source: By Business Insider

What does Bezos do with all his money?

In 2012, he donated $2.5 million to defend gay marriage in Washington. Bezos has also donated $42 million and part of his land in Texas to the construction of The Clock Of The Long Now, an underground clock designed to work for 10,000 years. In August 2013, Bezos bought The Washington Post for $250 million. The Washington Post is growing very fast. It was reported in October that it beat The New York Times in unique visitors for the first time. In November, it recorded 71.6 million uniques, almost a three times growth from two years ago, when Bezos bought the company. His space company Blue Origin made history last year when it became one of the first commercial companies to successfully launch a reusable rocket. His interest in flying also got him in trouble. In 2003, Bezos almost died in a helicopter crash while scouting a site for the company's test-launch facility in the Texas boondocks. Some time ago He flew his personal jet to take home the Washington Post reporter who was detained by Iran. In late 2013, Bezos made a splash by announcing on "60 Minutes" that Amazon was working on drones that could deliver orders in 30 minutes. He owns a house on Lake Washington, as well as a $24.25 million Beverly Hills estate. Amazon continues to expand its hardware ambitions. It launched its own TV streaming box as well as a smartphone in recent years. The Fire Phone was a major flop, but Bezos isn't slowing down his hardware initiatives. In an interview with Business Insider last year, he said, "If you look at our device portfolio broadly, our hardware team is doing a great job ... Fire TV, Fire TV Stick — we're having trouble building enough. With the phone, I just ask you to stay tuned." In fact, Amazon has a lot of other businesses, too. Its fastest-growing business isn't in e-commerce — it's Amazon Web Services, its cloud computing service, which generated almost $8 billion in revenue last year. And don't expect Bezos to stop experimenting with new ideas anytime soon. "What really matters is, companies that don't continue to experiment, companies that don't embrace failure, they eventually get in a desperate position where the only thing they can do is a Hail Mary bet at the very end of their corporate existence," Bezos said in an interview with Business Insider.

Source: By Business Insider

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