Jeff Bezos 1997 Interview

rather who are you I'm Jeff Bezos and what was your claim to fame and the founder of amazon.com where did you get an idea for amazon.com well three years ago I was in New York City working for a quantitative hedge fund when I came across the startling statistic the web usage was growing at 2,300 percent a year so I decided I would try and find a business plan that made sense in the context of that growth and I picked books as the first best product of saw online which making a list like 20 different products

that you might be able to sell and books were great as the first best because books are incredibly unusual in one respect that is that there are more items in the book category and there are items than any other category by far music is number two they're about two hundred thousand active music CDs at any given time but in the book space they're more than three million different books worldwide active and printed any given time across all languages what more than one and a half million in English alone so when you have that many items

it literally build a store online that couldn't exist any other way that's important right now because the web is still an infant technology basically right now if you can do things using more traditional method you probably should do them using the traditional method what kind of inventory do you we inventory the best-selling books at any given time we're inventory in our own warehouse only a couple of thousand titles and then we have we do almost in time inventory for another 400,000 titles or so we get those from a network of electronic we order electronically from

a network of wholesalers and distributors we order those today they're on our loading dock the next morning then for another 1.1 million titles we get those directly from 20,000 different publishers and those can take a couple of weeks to get and then the there are a million out of print books in our catalog we have a callow two and a half million books all together those million out of print books some of them we can get some of them we can't but we find them if we can and then we ship in to our customers

who kind of a search on those what's almost in time inventory almost in time inventory is the phrase we use to describe a whole selection of books that we offer it's basically the things that are you know below mm best-selling book up to the 400,000 bestseller book those are titles that we can get from a network of more than a dozen different wholesalers so if a customer orders a book from us today we order that book from our wholesalers today that book shows up on our loading dock the next morning and then we can ship

it to the customer they say one of the toughest things to do in the Internet is to tap from mind share what was your secret how did you move it yeah even more generally I agree with you that you know capturing mind share on the Internet is extremely difficult even more generally it's the late 20th century not just the internet you know capturing attention attention is too scarce commodity of the late 20th century and one of the ways that you can do that and it's the way that we did it was by doing something new

and innovative for the first time it actually has real value for the customer that's a hard thing to do but if you do do that then newspapers will write about you what you're doing customers will tell other customers and we'll get a huge word-of-mouth fan out and and that can really drive and accelerate businesses and that's what happened with us in the first year of opening amazon.com to the public we didn't do any paid advertising and all of our growth was fueled by word-of-mouth and media exposure I saw a little ants at the bottom of

the column of the New York Times that was our very first advertising we don't do that anymore but at the very beginning we did little tiny ads at the bottom of the front page of the New York Times I thought that was very clever of sort of using a URL as a macro because I read expand we're a bookstore click here right that's a great way to think of it and it worked very well I've been a baron I don't know you know the problem with that kind of advertising is it's extremely difficult to track

putting up an URL for every that's the problems you want people to start to learn your URL so you don't want to actually use a different one and it's very easy one of the great things about online ads we do advertising today and maybe 40 different different websites we do banner ads and that advertising is very easy to track in terms of knowing how effective it is so we know for each piece of creative in each venue not only how many click throughs we get but how many sell-through is we get how many dollars of

revenue generates per ad dollars spent on that creative in that venue that is a sort of a marketers you know Nirvana certain sense well it's an exciting place to be on the web right now oh it absolutely is I mean it's just incredible this is what's really incredible about this is that this is day one this is the very beginning this is the Kittyhawk stage of electronic commerce we're moving forward in so many different areas lots of different companies are as well in the late 20th century it's just a great time to be alive you

know we're going to find out that I think a millennia from now people are going to look back and say wow the late 20th century was really a great time to be alive on this planet