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Amazon.com's founder visits alma mater



by Nathan Kitchen '02

Bezos1

Jeffrey P. Bezos '86 delivers the sixth annual Gordon Wu Distinguished Lecture of the School of Engineering and Applied Science.

Photo by Frank Wojciechowski

He was anointed by Time magazine last year as the "king of cybercommerce," the man who married dot-com mania and online shopping.

Yet when Jeff Bezos '86, founder of Amazon.com, stopped by his alma mater in October, he had a more timeworn value of the retail industry on his mind.

"The thing that will drive Internet growth over the next five years is the same thing that always drives sustained growth: improvement in customer experience," Mr. Bezos said. "I believe this is Day One for e-commerce."

Mr. Bezos, Time magazine's Person of the Year for 1999, remains optimistic about the power of the Internet.

Amazon.com, which started by selling books online, has expanded into many products, including toys, tools, electronics, pet supplies, real estate, and even cars.

In his remarks as the sixth Gordon Wu Distinguished Lecturer of the School of Engineering and Applied Science, Mr. Bezos described his company's storybook rise. He told the crowd of approximately 700 about his decision in 1994 to sell books in the fledgling Internet market.

There were 3 million books in print, but the largest collection in a bookstore was only 150,000 books. He said he saw an opportunity to capitalize on the huge catalog of books.

"With that many items, you can build something online that otherwise could not exist," he said.

Mr. Bezos developed his idea for launching an online bookstore in a cross-country trip in a used Chevy Blazer. After working many hours with a core group of employees in an office with desks he built himself, Mr. Bezos launched Amazon.com in July 1995, beginning the rapid ascendance of dot-com companies.

"After the first 30 days, we had to completely change our vision and business plan," he said. "We got sales so far beyond our expectation that we immediately tried to get more funding."

In those first 30 days, Amazon sold books in all 50 states and 45 countries without any paid advertising, he said. By the time the company went public in May 1997, he said, Amazon had revenues of $600 million a year.

At the same time, however, Barnes & Noble went online to compete with Amazon, causing many analysts to dub his company "Amazon dot toast."

When Mr. Bezos recognized that he could not compete with Barnes & Noble's much larger size with the same service, he made what he called the "most important decision" for the company.

"We decided that we could be a customer-obsessed company instead of a competitor-obsessed company," Mr. Bezos said. "That was our strategy, and I think it worked well."

With the addition of customer reviews and other consumer-friendly features, Amazon revenues rose to $1.6 billion last year, with 23 million customers.

Mr. Bezos said this old rule of serving consumers first will fuel an expansion throughout the new Internet companies in the next five years.

"Focusing on the customer really does work," he said. "I believe we will see more growth over the next five years than we saw in the last five years."

This improvement in the customer experience will drive the industry through in-novation and a "feedback loop, " where new companies adapt their business practices to the services and products provided by existing compa-nies, according to Mr. Bezos.

Despite the huge drop in Amazon's stock price over the summer, Mr. Bezos expressed only optimism about the future of his company and said Amazon has a mission to make the customer experience the centerpiece of the Internet industry.

"What we want to do is become the Earth's most customer-centric company," he said. "By doing so, we want other companies to copy us. If we get other companies to do that, that's something I'll be very proud of."

This story first appeared in the Oct. 24, 2000, issue of the Trenton Times and is reprinted here with permission.


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