Why is Jeff Bezos rich?
By: Sai Ma
Tags: Jeff Bezos, Startup, Investment, Business Strategy, Amazon

(Photo Credit — freeimages)

It takes a certain type of person to ‘make it’. You hear it all the time. But what factors played a part in Jeff Bezos’s career and life that helped him become the world’s richest man.

Early investment

It is well documented that he started Amazon with almost $250,000 which he borrowed and made it clear that he thought there was a 70% chance the business would not succeed. In 1994, he held 60 meetings with family members, friends and potential angel investors to ask each to invest around $50,000 in Amazon to raise the $1 million he needed. Only 20 of those people said yes and his parents ended up investing five times what he had asked, even though they didn’t really understand the concept of Amazon.

He took a chance

“One thing that I tell people is … if you’re going to do anything new or innovative, you have to be willing to be misunderstood. If you cannot afford to be misunderstood, then for goodness’ sake, don’t do anything new or innovative.”

Bezos was in a good job, on Wall Street, earning a comfortable salary when he decided to up and leave to pursue his vision. He says of his boss at the time (with whom he had a good relationship),“he took me on a long walk in Central Park, listened carefully to me, and finally said, ‘That sounds like a really good idea, but it would be an even better idea for someone who didn’t already have a good job,’”.

“That logic made some sense to me, and he convinced me to think about it for 48 hours before making a final decision. Seen in that light, it really was a difficult choice, but ultimately, I decided I had to give it a shot,”. “I didn’t think I’d regret trying and failing. And I suspected I would always be haunted by a decision to not try at all. After much consideration, I took the less safe path to follow my passion, and I’m proud of that choice.”

“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.”

He was ahead of the game

Before launching Amazon, Jeff was intrigued. He watched and monitored the growth of the internet, it’s usage and how rapidly it was taking off, especially at a time when not many people owned a computer. Further, most people didn’t even know what the internet was or how it worked.

“I’d never seen or heard of anything that grew that fast, and the idea of building an online bookstore with millions of titles — something that simply couldn’t exist in the physical world — was very exciting to me.”

He focussed on the business’s immediate future

Bezos has been vocal in explaining that although he has a vision, a longterm goal, his immediate attention in on the business’s immediate future.

Speaking about Amazon’s quarterly results, he has said that, “that quarter was kind of baked and done two or three years ago, and right now the senior executives at Amazon are working on a quarter that’s going to happen in 2021, 2022 — that kind of thing.”

He is an advocate for reinvesting

It is a well known fact that Amazon does not pay out dividends to shareholders. Bezos is an advocate for ‘sacrificing this year’s profits to invest in long-term customer loyalty and product opportunities that will create bigger profits next year and for years thereafter.’

(Photo Credit — freeimages)

Many ‘companies scrimp on things like long-term investments, customer service, product quality, and employee compensation, in the interest of delivering a few more pennies to this quarter’s bottom line.This obsession with short-term profits has helped produce the unhealthy and destabilizing situation that now afflicts the U.S. economy. The profit margins of America’s corporations are now higher than they ever have been in history, while the employee wages paid by America’s corporations are the lowest they have ever been in history.’