Speaker 1: Get in touch with technology with pluck stuff from how
Speaker 1: Stuff Looks dot Com. Haythen everyone, and welcome to tech Stuff.
Speaker 1: I am Jonathan Strickland, one of the two hosts, and
Speaker 1: I am Lauren voc Obamb the other of the two hosts. Logically,
Speaker 1: there we go today. We thought we would start talking
Speaker 1: about a particularly important company as far as the web
Speaker 1: and technology are concerned. It's kind of big. You may
Speaker 1: have heard of it. Yeah, it's called Amazon. Um big,
Speaker 1: big company and also one of the companies that that
Speaker 1: famously weathered the great storm of the dot com crash. Yeah. Yeah,
Speaker 1: because they started up way before that thing happened, like
Speaker 1: five entire years. And yeah, but you know what, not
Speaker 1: a lot of companies that were specifically web based can
Speaker 1: make the claim that they started pre dot com and
Speaker 1: made it through couple did Google did another thing that
Speaker 1: you may have heard of? Yeah, So so anyway, Amazon
Speaker 1: has become really a powerhouse. But to to understand where
Speaker 1: it is now, it's it's good to look at at
Speaker 1: how it started. And really Amazon is kind of one
Speaker 1: of those companies, even though even though I would say
Speaker 1: the founder is not necessarily as well known as someone
Speaker 1: like Steve Jobs was right, Sure, he's not that kind
Speaker 1: of level of rock star, but nonetheless his personality has
Speaker 1: really driven the way that the company has developed end end. Yeah,
Speaker 1: I mean without him, without his drive and without his
Speaker 1: his vision. Uh and frankly, without the mistakes he's made,
Speaker 1: Amazon would not be what it is. And we're talking,
Speaker 1: of course about Jeffrey Preston Bezos. Preston's middle name. That's
Speaker 1: a terrific middle name. Yes, makes me think of Princeton,
Speaker 1: which he also went to. But that's spoiler alert. But yeah,
Speaker 1: you need to know a little bit about him to understand, uh,
Speaker 1: you know, where Amazon is coming from and sort of
Speaker 1: the goals of the company and where it might be
Speaker 1: going to. So to cast back the clock to to
Speaker 1: the mid sixties, Uh, you need to understand a little
Speaker 1: bit about his family background. So his mother, it was
Speaker 1: Jacqueline Guys Jorgenson Jensen U. She had married, briefly a
Speaker 1: man by the name of Ted Jorgenson. They were married
Speaker 1: less than a year and she clearly wanted to keep
Speaker 1: that name. Well, she lost she lost Jorgenson. Uh no,
Speaker 1: but that was that was her name at the time.
Speaker 1: But then she she became Jacqueline Guys again. And I
Speaker 1: assume I'm pronouncing that correctly. It's G I S E.
Speaker 1: So feel free to write us in and say how
Speaker 1: wrong Jonathan is. And I love those emails. Yes, now
Speaker 1: now she gets them, so um yeah, Jacqueline guys married
Speaker 1: to Ted Jorgenson. Uh, and she gets pregnant and then
Speaker 1: uh they divorce. Well, there was a fellow by the
Speaker 1: name of Miguel Bezos, better known as Mike, and he
Speaker 1: grew up in Cuba, but he took part in a
Speaker 1: there was actually a program that sort of helped people
Speaker 1: who were trying to escape Castro's regime to get into
Speaker 1: the United States, and he was It was a program
Speaker 1: aimed at at younger people. He was one of these people.
Speaker 1: So he came over the United States as a young teenager,
Speaker 1: like he was fifteen years old, doesn't speak English. He
Speaker 1: goes to live in a small community where he's with
Speaker 1: I think fifteen other people from and he learns English
Speaker 1: and he starts he goes to school and uh and
Speaker 1: really applies himself and eventually he goes to attend school
Speaker 1: in Albuquerque, New Mexico, and starts to work in the
Speaker 1: bank of New Mexico. And that's where he meets Jackie
Speaker 1: guys and uh, Miguel and Jackie ended up falling in
Speaker 1: love and they ended up getting married. And so then
Speaker 1: Miguel applied for and became the adopted father of Jeff Bezos.
Speaker 1: He Jeff took the name of his of his uh
Speaker 1: adopted dad. And in all interviews, Jeff talks about Mike
Speaker 1: as being his father. He says that, you know, he
Speaker 1: may not be his biological father, but he's his dad
Speaker 1: and uh and specifically, in several interviews, they all cited
Speaker 1: the same statement where he said, the only time I
Speaker 1: ever think about him not being my biological father is
Speaker 1: when I have to fill out a form, which is
Speaker 1: you know, it's just a It says a lot about
Speaker 1: who who Mike Bezos is really and so uh he
Speaker 1: grew up with you know, his his parents were very
Speaker 1: hard working, they believed very much in scholarship and UH,
Speaker 1: and so he really started to apply himself. His father,
Speaker 1: Mike became a petroleum engineer for Exxon. UH. After he
Speaker 1: graduated college, and Jeff ended up really getting interested in
Speaker 1: science and electronics and engineering and particularly in space. That
Speaker 1: will come into play a little bit later. But he
Speaker 1: spent childhood summers working on his grandfather's ranch in Cotula, Texas.
Speaker 1: And everyone in Catula who knows that I just mispronounced
Speaker 1: the name of your town. I apologize their their places
Speaker 1: in Texas that I attempt to say the name of
Speaker 1: and I always mangle it many many places in America. Honestly,
Speaker 1: there's really words. Words are hard. It's particularly tough in
Speaker 1: places like Georgia and Texas where you have the regional
Speaker 1: pronunciation of a place that is not the same as
Speaker 1: the pronunciation of some other words. Pronunciation. Yeah, I think
Speaker 1: we've talked before on the show about Ponsta Leone Street
Speaker 1: around here. Yeah, great street, but yeah, you do not
Speaker 1: call it Poste Leone. It's constantly in um Yeah, same
Speaker 1: sort of thing. So I know I mispronounced that. I
Speaker 1: apologize to to Texas. I do apologize anyway. His grandfather,
Speaker 1: his grandfather's name was Lawrence Preston Pop guys pop in
Speaker 1: a quotation box there so known as pop, and he
Speaker 1: was he was a bit of a a go getter, uh,
Speaker 1: someone who really kind of applied himself. He had worked
Speaker 1: for DARPAH. He had helped develop space and missile defense technology.
Speaker 1: Congress eventually appointed him as the manager of the Atomic
Speaker 1: Energy Commissions Albuquerque Operations office, and he oversaw twit the
Speaker 1: six thousand employees. Oh my goodness, gracious, so so so
Speaker 1: so people in in Jeff's life had this kind of
Speaker 1: drive and it definitely rubbed off on him. Yeah, and
Speaker 1: his grandfather apparently just doated upon him. And uh that
Speaker 1: he really encouraged Jeff in his love of things like
Speaker 1: electronics and technology. Not a big surprise for someone who's
Speaker 1: technically a rocket scientist type. Maybe not technically a rocket scientist,
Speaker 1: but works field. Sometimes nerds like to talk about the
Speaker 1: nerd things that they're excited about. No, that's not a
Speaker 1: mark of a nerd. A passion for a subject and
Speaker 1: to talk endlessly about it. I don't know anything about anyway.
Speaker 1: Let me get on with Amazon. So Obasos his childhood
Speaker 1: really he um, he started to build kits to help
Speaker 1: him build electronics and various gadgets. He actually there was
Speaker 1: a great story about how, uh he saw this toy
Speaker 1: that was a mechanical electronic toy that was a box
Speaker 1: that had mirrors in it, and it was called an
Speaker 1: infinity cube and you would press a button and the
Speaker 1: mirrors would align in such a way to give that
Speaker 1: illusion of infinite. But the toy was twenty dollars. This
Speaker 1: was in the mid seventies. Yeah, yeah, this would be yeah, yeah, right,
Speaker 1: early seventies. Actually, um, maybe even no, it would have
Speaker 1: to be early seventies. There's no way. It was when
Speaker 1: he was four. But his his mother told him that
Speaker 1: twenty dollars was too much to spend for a toy,
Speaker 1: and he thought, oh, well, you know, that makes sense,
Speaker 1: and he looked at around and he started to find parts,
Speaker 1: and he figured out that buying all the parts would
Speaker 1: be cheaper than buying the toys. So he bought the
Speaker 1: parts and built one himself. Oh just yeah, like you do.
Speaker 1: I did that all the time when I was a child,
Speaker 1: and I just made my own toys where I made
Speaker 1: tinker toys by bashing sticks together until they formed a pile. Anyway,
Speaker 1: Bezos ended up being the the subject of part of
Speaker 1: a book. The book was called turning on Bright Minds
Speaker 1: of parent Looks at Gifted Education in Texas and uh
Speaker 1: and it it kind of it talked about him, although
Speaker 1: it changed his name for legal purposes exactly. Yeah, yeah,
Speaker 1: as in minor as an underage, not as in let's
Speaker 1: go get some coal out of that part of the ground. Um.
Speaker 1: He he was featured in this book. What was funny
Speaker 1: was that they talked to other teachers who who had
Speaker 1: taught Bezos, and they had said that he was very intelligent,
Speaker 1: he did very well in school, but he was not
Speaker 1: particularly particularly gifted in leadership, which is wow. That got
Speaker 1: to be He obviously developed those skills later on in
Speaker 1: somewhere else. Yeah, apparently so well. Like I said, he
Speaker 1: was fascinated by space in the space industry, and he
Speaker 1: wanted very early on to kind of look into creating
Speaker 1: sort of a privatized approach to the space industry because
Speaker 1: having having it just in government hands meant that you
Speaker 1: had a pretty narrow set of parameters you could work
Speaker 1: within because you had to do everything according to government
Speaker 1: approval and uh. And he also really felt that it
Speaker 1: was important to develop lands in the event that Earth
Speaker 1: could become the victim of some sort of interspatial collision,
Speaker 1: so you know, like like a meteor media coming or
Speaker 1: asteroid or comment or you know, death star. Yeah. Yeah,
Speaker 1: he sat there and said, you know, we it doesn't
Speaker 1: make sense for us to have all our eggs on
Speaker 1: the Earth basket, we should spread our eggs around. That's
Speaker 1: the other little planet bast that came out differently than
Speaker 1: awkward in my head. But anyway, Yes, that's exactly what
Speaker 1: he was thinking, was that we need to diversify. Yeah,
Speaker 1: and and and the idea of a non government space
Speaker 1: program at the time, I mean, if this was still
Speaker 1: like like that was that was relatively radical. I mean,
Speaker 1: obviously people talk about it all the time now that
Speaker 1: the space Shuttle program has been shut down. But yeah, no,
Speaker 1: this was this was pretty pretty crazy stuff, and he
Speaker 1: was very much interested in it. Uh and and that
Speaker 1: was an interest that didn't go away from with childhood. Well,
Speaker 1: and like I said, we'll talk a little bit more
Speaker 1: about that, probably in part two of our Amazon Focus,
Speaker 1: because we're expecting that we're going to talk a lot
Speaker 1: about this one. Yeah, it's a it's it's a company
Speaker 1: that's not only large and not only interesting in its history,
Speaker 1: but it does a lot of stuff, a lot of stuff.
Speaker 1: It does not just chippy books, Nope, not anymore so. Anyway,
Speaker 1: he then ended up going into high school. He co
Speaker 1: founded a student summer camp called Dream Institute. And Dream
Speaker 1: wasn't acronym that standard for directed reasoning methods, and I love, love,
Speaker 1: love this because not only did they stress science curricula,
Speaker 1: but also literature. Stranger in a Strange Land was required reading,
Speaker 1: so was Doune, so was Lord of the Rings. So
Speaker 1: you sit there and you think, and and there were other, uh,
Speaker 1: actual books that that people would say fit in the
Speaker 1: world of literature. I know some people would argue that
Speaker 1: Dune and Lord of the Rings don't. I am not
Speaker 1: one of those people. I think Dune and Lord of
Speaker 1: the Rings have a real place in literature. But I
Speaker 1: know some people look down in it because it's science
Speaker 1: fiction and science fiction and but yeah, yeah, that's I've
Speaker 1: I certainly had a poetry teacher in college who would
Speaker 1: argue with you, but you're right. No, I had a
Speaker 1: creative writing teacher who told me that in creative writing,
Speaker 1: he actually came up to me and said, now, Jonathan,
Speaker 1: I want you to write real fiction because my father
Speaker 1: is a science fiction author. You know, my dad writes
Speaker 1: science fiction. So oh, I mean at the same time,
Speaker 1: you know, I had I had that one professor who
Speaker 1: was very down on it. But I also had another
Speaker 1: professor who assigned us those sort of books for required readings.
Speaker 1: In both you know, at a medieval literature professor who
Speaker 1: would quote Tolkien and was probably the probably probably the
Speaker 1: biggest geek in the class. And boy he was great anyway,
Speaker 1: all of that aside. He designed this curriculum along with
Speaker 1: another student, and it was for fourth, fifth, and sixth graders.
Speaker 1: So this is when he's when he's getting into like
Speaker 1: he's looking into college at this point forming this and
Speaker 1: and uh it was I think six hundred dollars to
Speaker 1: get in, and I think they had fifteen students apply,
Speaker 1: two of them being Bezos's siblings, but other than that, um,
Speaker 1: you had other kids in there too, And it was
Speaker 1: just it was interesting that it was taking this approach,
Speaker 1: and they really stressed the fact that it was a
Speaker 1: new approach that also incorporated classic learning material. So it
Speaker 1: wasn't just you know, this space age form of learning.
Speaker 1: They said, no, the classics are important too, And uh,
Speaker 1: I found that particularly fascinating. It reminds me very much
Speaker 1: of a program I went to when I was in
Speaker 1: high school called the Governor's Honors Program that was very
Speaker 1: much stressing about its stressed, uh, various forms of learning
Speaker 1: in a very concentrated way. But you were with a
Speaker 1: whole bunch of other people who are really really jazzed
Speaker 1: about that. So it made learning entire renaissance kind of
Speaker 1: concept of learning that says that both science and also
Speaker 1: arts are kind of important. Yeah, so that was that
Speaker 1: was an interesting approach. He then when he graduated high
Speaker 1: school and then went to Princeton, uh, and his in
Speaker 1: his senior year, Uh, he received well. Before I get
Speaker 1: to his senior year, he actually at first thought about
Speaker 1: majoring in theoretical physics right right, you were telling me
Speaker 1: about this, but decided that that actually the other kids
Speaker 1: in theoretical physics were better at theoretical physics than he was. Yeah,
Speaker 1: and he didn't like that, and he didn't like that,
Speaker 1: and it wasn't so it wasn't so much that he
Speaker 1: didn't like that there were people who were better at
Speaker 1: it than he was, sure, but he was just he
Speaker 1: just realized that that was not his niche Yeah, exactly.
Speaker 1: He was like, there are people whose brains are wired
Speaker 1: in a different way than my brain is wired, and
Speaker 1: these people are grasping these concepts easily. They are doing
Speaker 1: really well in these classes. I'm struggling. Uh, it's a
Speaker 1: lot more work for me. Maybe there's something else I
Speaker 1: should look into, and so instead he went into computer
Speaker 1: science instead of theoretical physics. By the way, both of
Speaker 1: those fields way more complicated than anything I ever did
Speaker 1: in college. So you know, right for for the record
Speaker 1: that the two of us English majors, you were I was,
Speaker 1: I was English. Yeah, yeah, the English major I wasn't.
Speaker 1: Actually I wasn't English, and then converted into Southern United States. No,
Speaker 1: that wasn't me. Uh. I was always anyway, very similar, y'all.
Speaker 1: He uh then joined well he in his senior year,
Speaker 1: he was invited to join various companies. Uh. He received
Speaker 1: job offers from Intel, little company, there Bell Labs, another one,
Speaker 1: Anderson Consulting. But he ended up instead accepting an offer
Speaker 1: to join a startup company called fightel f I T
Speaker 1: E L. And this was a company that was trying
Speaker 1: to build a telecommunications network that was for trading companies
Speaker 1: like like uh, like finance organizations, and the whole purpose
Speaker 1: was just to settle cross border equity transitions. Exciting stuff.
Speaker 1: It sounds thrilling, but it meant building a network. And
Speaker 1: this is we're talking about the same time when when
Speaker 1: our pannett is going strong, the Internet is is starting
Speaker 1: to take form at this point. Yeah, pretty soon we're
Speaker 1: gonna have the web there too. And uh, and so
Speaker 1: he's definitely seeing that's where the exciting stuff is happening,
Speaker 1: and in finances specifically, that's where he got his financial Yes,
Speaker 1: he got pretty he got pretty good at that. And
Speaker 1: he ended up working for fight Tell for a little
Speaker 1: while and then left that for a company called Bankers Trust,
Speaker 1: where he stayed for two years. And then he left
Speaker 1: that company to join a hedge fund firm called D
Speaker 1: E Shaw. Uh. And while he was at d E
Speaker 1: Shaw he met a research associate by the name of
Speaker 1: Mackenzie whom he became enamored of. This was after he
Speaker 1: had had an unsuccessful attempt to analytically find the right
Speaker 1: woman for him. Uh. He tried something that he called
Speaker 1: woman flow, which to him meant finding using the the
Speaker 1: analysis that you would use in finance to find a woman.
Speaker 1: That sounds like the absolute worst idea I have heard
Speaker 1: all day. Yeah, it did not work. It turns out
Speaker 1: it was a failed experiment. I cannot I cannot even
Speaker 1: imagine that. Yeah that um wow, and and and but
Speaker 1: but decades before match dot com he was really ahead
Speaker 1: of the curve, well more like more like five years
Speaker 1: because at this point game into the nineties. But yeah,
Speaker 1: but he he uh yeah, he ended up meeting Mackenzy
Speaker 1: and the two of them ended up getting married in
Speaker 1: nine teen. And uh. Then at the Shaw he was
Speaker 1: put in charge of developing business opportunities for the thing
Speaker 1: called the Internet. Internet. Yeah, and uh that's when he
Speaker 1: started to think this might be the right place to
Speaker 1: really focus on business because as he was looking into it,
Speaker 1: he realized that there was a growth on the Internet,
Speaker 1: a growth of users, I should say, not just some
Speaker 1: weird growth that growth. This is that more and more
Speaker 1: users were joining the Internet at an incredible rate, like
Speaker 1: twenty three hundred percent increase from one year to the next.
Speaker 1: And so with this kind of increase, there's huge amounts
Speaker 1: of opportunity. So how could we take advantage of this
Speaker 1: this fact? And it all depends on on the story
Speaker 1: you read, But eventually he came up with the idea
Speaker 1: of well, with the assets that are already in place
Speaker 1: in the United States, the fact that there were really
Speaker 1: big book distributors in the United States, and those were
Speaker 1: Ingram and Baker and Taylor, these two enormous entities have
Speaker 1: exhaustive databases of titles of books. So all the work
Speaker 1: of organizing the books, of cataloging the books, it's all
Speaker 1: been done. So all that really needs to happen is
Speaker 1: there needs to be some sort of website where someone
Speaker 1: who is interested in books could go look up any
Speaker 1: book that's ever been published and find out if they
Speaker 1: can buy it. And so at first he kind of
Speaker 1: talked about this over at d E Show, but it
Speaker 1: was clear that that wasn't going to really pan out there,
Speaker 1: and so instead he made a big decision in his life,
Speaker 1: and that was he was going to leave this company.
Speaker 1: And he was the youngest executive and yeah, but he
Speaker 1: met with the company's the head of the company, who
Speaker 1: whom he was friends with, and he said, I'm gonna
Speaker 1: I'm gonna believe and start my own company. And that's
Speaker 1: exactly what the founder of the Shaw Shaw had done.
Speaker 1: But he said, you know, you're you're going to be
Speaker 1: leaving behind security and a debt, and you know you've
Speaker 1: got guaranteed success in this company. And he said, I'm
Speaker 1: still going to do it, and so, yeah, I mean,
Speaker 1: it wasn't just talking about leaving. I mean, this was
Speaker 1: a Wall Street Company. He was talking about moving across
Speaker 1: the country. Yeah, yeah, he He and his wife ended
Speaker 1: up taking a bit of a scenic tour of the
Speaker 1: United States, driving all the way out to Seattle and
Speaker 1: uh the the You might ask, well, why why did
Speaker 1: they go to Seattle? Why was that the birthplace of Amazon?
Speaker 1: Why all the places the United States? There are a
Speaker 1: few reasons. One reason is that Seattle happens to be
Speaker 1: close to one of Ingram's distribution facilities. Not Ingram's, of course,
Speaker 1: that was one of those big contributors exactly. So by
Speaker 1: being close to the distribution facility in make it a
Speaker 1: lot easier to ship books out to customers. Convenient. Yeah.
Speaker 1: Another reason is that the state of Washington, which, for
Speaker 1: those of you who do not know, Seattle is a
Speaker 1: city that is in the state of Washington. State of Washington,
Speaker 1: in comparison to other states in the US, is fairly
Speaker 1: sparsely populated. The reason why that's important is that, as
Speaker 1: a business operating within the state of Washington, anyone who
Speaker 1: purchased an item in the state of Washington would have
Speaker 1: sales tax added to their purchase. The United States, this
Speaker 1: is kind of complicated, guys, So Generally speaking, the way
Speaker 1: the sales tax was working, at least at that point,
Speaker 1: was that if you bought the you know, the sales
Speaker 1: tax applied if you were within the same state as
Speaker 1: the Yeah. Outside of that, uh, different rules applied. So essentially, Bezos,
Speaker 1: this idea is that, Okay, I'm gonna be close to
Speaker 1: the books and I won't have to add sales sales tax,
Speaker 1: which is a complication. It's all other algorithm, right, and
Speaker 1: it also ends up making customers less happy because I
Speaker 1: have to spend more money to buy something. You know
Speaker 1: that you quoted a price, and then sales taxes put
Speaker 1: on top of it, and you know, it's a whole
Speaker 1: dollar more. Yeah I wanted to eat today, Yeah, yeah,
Speaker 1: I had. I had days like that. I had that
Speaker 1: five centerraman. Why can't I afford you today? Oh yeah,
Speaker 1: I guess I'll just be licking the this this piece
Speaker 1: of plastic that once held American cheese. I guess it's
Speaker 1: free pizza in the square again. I'll sign up for
Speaker 1: another credit card. Good days. Um. Anyway, So these were
Speaker 1: the reasons why he had decided to move to Seattle,
Speaker 1: and on the way there he actually worked on a
Speaker 1: business plan for this company, and like like on his
Speaker 1: laptop in the passenger seat while his wife was driving,
Speaker 1: kind of worked on yes, exactly, like like look over there,
Speaker 1: Mount Rushmore, can't talk working on business plan. Um. And
Speaker 1: he ended up stopping off in California before heading up
Speaker 1: to Seattle, and there he ended up recruiting his first employee,
Speaker 1: Shell Cappen, who was employee number one at Amazon, and
Speaker 1: that was he was a programmer. So this is a
Speaker 1: guy who's going to help build the actual software to
Speaker 1: make the sight run right exactly. So, because you know,
Speaker 1: Amazon is more than just a website. You've got you've
Speaker 1: got the website part, which is the forward facing part
Speaker 1: of the company, that's the part of the customer sees.
Speaker 1: So so you and I we think of Amazon as
Speaker 1: a website. There's a lot of stuff that has to
Speaker 1: happen in the background for the for the actual business
Speaker 1: amounts of infrastructure, of of of database management and yeah,
Speaker 1: it's credit card systems, right. So so he had to
Speaker 1: get someone who was a strong programmer, and Shell ended
Speaker 1: up being his first recruit. And uh and according to
Speaker 1: the interviews I read, it sounds like he must have
Speaker 1: been incredibly persuasive because Shell came across as something of
Speaker 1: glass is half empty kind of guy. To be fair,
Speaker 1: he had worked for several companies that did not go anywhere,
Speaker 1: so here he kind of expected it to be another
Speaker 1: one of those. And according to one interview I read
Speaker 1: with Bezos, Bezos was said, hey, I needed that guy
Speaker 1: because he was the one who's like, Okay, no, that's
Speaker 1: not gonna work. Let's try it this way. I already
Speaker 1: know that's not gonna work because I did it before
Speaker 1: and it didn't work. So you know, at a certain point,
Speaker 1: that's a that's a very important thing. And it started
Speaker 1: start up yep. And then they also ended up hiring
Speaker 1: a or at least contracting a guy named Paul Barton Davis,
Speaker 1: and they built the first version of Amazon dot com.
Speaker 1: And of course this is a story about a company
Speaker 1: that has its roots and technology. That means the very
Speaker 1: first version of Amazon dot Com was built in a
Speaker 1: garage because like, like all good bands have started on
Speaker 1: the West Coast, I mean, there's so many other companies
Speaker 1: we could talk about that had you know that that's
Speaker 1: starting a garage, like Apple and Microsoft are both Google
Speaker 1: had its first servers in a garage. I mean once
Speaker 1: you got outside of the Granted, they had servers in
Speaker 1: in college, but then once it became its own thing,
Speaker 1: the servers lived in a garage. So garages play a
Speaker 1: big important role in technology. Oddly enough, they almost never
Speaker 1: house a car, but they are still very important. Uh.
Speaker 1: And then Bezos and his his other employees, they ended
Speaker 1: up meeting with a bunch of angel investors. Uh. And
Speaker 1: angel investors are not these guys in business suits and
Speaker 1: big fluffy white wings. Um, they are people who are
Speaker 1: vampires with a heart of gold. Neither of those things. Well,
Speaker 1: I guess it depends on again, upon whom you ask.
Speaker 1: But these are these are folks who end up investing
Speaker 1: in often risky ventures with the hope that this investment
Speaker 1: is going to pay off in the long run. Uh.
Speaker 1: He met with about fifteen of them, and together they
Speaker 1: invested about one million dollars of seed capital in Amazon.
Speaker 1: One of those fellows was a guy by the name
Speaker 1: of Tom Ahlberg, and he was the first board member
Speaker 1: of Amazon. And so with that million dollars invested, the
Speaker 1: company of Amazon incorporates and they incorporate in July nineteen.
Speaker 1: And there's a lot more to say, but before we
Speaker 1: get there, I think it's important we take just a
Speaker 1: quick break to talk about our sponsor, and now back
Speaker 1: to the show. So the company has incorporated in nineteen
Speaker 1: ninety four. A year later, July, Amazon dot Com officially
Speaker 1: launches and they sell their first book. Do you happen
Speaker 1: to know what that was? I do happen to know
Speaker 1: what that was? Hit me with your knowledge? It comes um.
Speaker 1: It is the fluid concepts and creative analogies, computer models
Speaker 1: of the fundamental mechanism, the thought a real page turner. Actually,
Speaker 1: it actually sounds pretty cool to me, but then I
Speaker 1: think it's probably also way over my head. But yes,
Speaker 1: that was the first title purchased. And uh, of course,
Speaker 1: because you have Bezos there and he's kind of a
Speaker 1: nerdy engineer type, and you've got these other guys there
Speaker 1: who I'm guessing also shared some of that interest. They
Speaker 1: might they might have been. They decided, did you hear
Speaker 1: about what they rigged up to their computer? So they
Speaker 1: rigged up a bell and the idea was that the
Speaker 1: bell would ring every time they made a sale, so
Speaker 1: you know, sale bing. And And I don't know if
Speaker 1: any of you guys out there in podcast land have
Speaker 1: ever worked for a company that kind of did something
Speaker 1: like this. I used to work for a company that
Speaker 1: would occasionally do one of those things where you'd land
Speaker 1: a big deal and then everyone starts yea and applauding
Speaker 1: and running around, and it felt like I was in
Speaker 1: a pep rally and I wanted to be out of
Speaker 1: there so badly. Yeah. I essentially never want anything on
Speaker 1: the internet to make noise or or a computer. I
Speaker 1: want complete silence. Were writers, We don't, we don't like
Speaker 1: we don't like that. But anyway, so it turns out
Speaker 1: they didn't like it either, well, mostly because it became
Speaker 1: a problem because the site ended up getting a lot
Speaker 1: more popular than they expected, a lot faster than they expected,
Speaker 1: and so uh, within two weeks they had dismantled it
Speaker 1: because it was driving everyone bonkers. Yeah. Yeah. Within within
Speaker 1: their first month, they had shipped books to all fifty
Speaker 1: states and forty five other countries, which was a big
Speaker 1: surprise to them. They were not they didn't really think
Speaker 1: that they were going to get international business that quickly.
Speaker 1: And by the end of September, so remember they launched
Speaker 1: in July. By the end of September, the revenues were
Speaker 1: about twenty thousand dollars per week. Uh, and by the
Speaker 1: end of nineteen itself, they made five hundred ten thousand
Speaker 1: dollars in sales. Now, that sounds like a pretty good
Speaker 1: first run, especially you know, you figured they started seven
Speaker 1: months into the year, they didn't have a full year
Speaker 1: to make. To make a half million in sales, not bad. However,
Speaker 1: keep in mind that Amazon dot Com is the kind
Speaker 1: of operation that, uh, that that costs a lot of
Speaker 1: money to run. And I mean they were already a
Speaker 1: little bit in the in the red technically from from
Speaker 1: all of that startup money. So you know, you've got
Speaker 1: money that you're going to have to pay back in
Speaker 1: some way. Of course, most of those guys essentially what
Speaker 1: what happens is they own shares in the company. But
Speaker 1: but yeah, you still have you still you know, they
Speaker 1: still expect a return on their investment. So you've got
Speaker 1: you've got a lot of obligations to make. So, uh,
Speaker 1: it'll be a while before years before Amazon. But yeah,
Speaker 1: in fact, if you're waiting to hear that information in
Speaker 1: part one, I'm just gonna go ahead and burst your bubble.
Speaker 1: Part two, Well, it won't be until we're into part
Speaker 1: two before we get to Amazon becoming a profitable company.
Speaker 1: But but actually that's parts of the amazing part of it,
Speaker 1: which is incredible because it's yeah, if it, if it
Speaker 1: incorporates ship and it is until after the year two thousand,
Speaker 1: that before their before they're profitable. Yeah. And to to
Speaker 1: express how amazing this is to someone like myself, I
Speaker 1: look at companies now that generally speaking, you know, they
Speaker 1: launch and within a couple of years, if things are
Speaker 1: still kind of rocky, people tend to pull support, and
Speaker 1: they don't they fall apart. So seeing a company that
Speaker 1: was this ambitious, this large, I mean they were making
Speaker 1: lots of sales, they were making a lot of money,
Speaker 1: but their their costs outweighed their revenue. So it sounds
Speaker 1: like it sounds like um businesses personal attitude about business
Speaker 1: was a huge contributor to that. That he has always
Speaker 1: been extremely focused on the long run and on no, no, no,
Speaker 1: if we if we create the service, if we make
Speaker 1: it just just kick butt, then people you know, it's
Speaker 1: if if you build it, they will come kind of exactly.
Speaker 1: And what was amazing was not just that Bezos really
Speaker 1: believe this, but he was able to convince other people
Speaker 1: exactly because without that without convincing other people, you don't
Speaker 1: move forward. Uh. Speaking of moving forward, in nineties six,
Speaker 1: a few things happened in Amazon. They launched the Amazon
Speaker 1: dot Com Associates program, uh and the which was an
Speaker 1: affiliate marketing program. So associates probably Amazon has done a
Speaker 1: lot of stuff in order to kind of, uh, not
Speaker 1: just get its name out there, but to reward people
Speaker 1: people for helping them, right exactly. So the Associates program
Speaker 1: was a program that will let let you put in
Speaker 1: links in your web page to earn commissions through any
Speaker 1: click through sales that happen and any time that a
Speaker 1: friend clicks the link and then buy something, you get
Speaker 1: you know, yeah, like a like up to ten percent
Speaker 1: of whatever the value was of the sales. So so,
Speaker 1: for instance, if you were here's a good example. Uh.
Speaker 1: And I mean, there's no direct affiliation between my podcast
Speaker 1: and this website. I just want to make that clear.
Speaker 1: But chud dot com, which I've talked about many times,
Speaker 1: I'd like to use that example because I like the website,
Speaker 1: but it's all about movie news. And they had they
Speaker 1: were part of this affiliate program where uh, you know,
Speaker 1: they talked a lot about different movies, especially like when
Speaker 1: movies would come out on DVD and so they would
Speaker 1: do a review, which meant that you could click through
Speaker 1: and actually buy the movie that you know you're h
Speaker 1: You could just buy it with one you know, go
Speaker 1: through to Amazon buy it there, and it meant that
Speaker 1: you were not only getting to participate in the film
Speaker 1: that was being discussed, but you were also supporting the
Speaker 1: website that you loved, because Chud would get a little
Speaker 1: bit of money every time someone would do that. So
Speaker 1: that's an example of that, and that's just the first
Speaker 1: of many examples of how Amazon started to partner with
Speaker 1: other people, entities, organizations, UM and UH. You know. The
Speaker 1: way it worked was essentially you would receive monthly payments
Speaker 1: based upon the orders that came through from your center site.
Speaker 1: So I think what would happen is like someone would
Speaker 1: order something from a link that was on your site
Speaker 1: thirty days after they had ordered that. UM, at the
Speaker 1: end of that month, another thirty days. That's when you
Speaker 1: would get the checks in, so you could easily get
Speaker 1: an idea of how how persuasive you were based upon
Speaker 1: the size of the check. Here's a check for a
Speaker 1: dollar twenty five. It's time to go to Taco pell
Speaker 1: um um. And then in nineties seven, Amazon made a
Speaker 1: big move. It went public. Yep, they held their initial
Speaker 1: public offering and uh and this was big news. They
Speaker 1: entered NASDAC. That's the the exchange that you can find
Speaker 1: Amazon on, and it was it was. It was interesting
Speaker 1: because originally analysts predicted that the stock price would be
Speaker 1: between twelve and fourteen dollars, but then the day before,
Speaker 1: the day before the I p O, they adjusted that.
Speaker 1: First they adjusted it to say, okay, no, it's gonna
Speaker 1: be fourteen to sixteen dollars. Then they adjusted it again
Speaker 1: and okay, no, it's gonna bears eighteen dollars. We're pretty
Speaker 1: sure that's what's going to open at. So much anticipation
Speaker 1: had built up that when it went uh uh when
Speaker 1: when When the market actually opened, the opening price was
Speaker 1: twenty nine dollars and twenty five cents per year. Uh. Yeah.
Speaker 1: It hit a high of thirty dollars that day, and
Speaker 1: it closed out the day at twenty three dollars and
Speaker 1: fifty cents. So it was definitely one of those anticipation
Speaker 1: things where spring back, this happens, but not nonetheless way
Speaker 1: over what it was originally, right, even at eighteen dollars.
Speaker 1: Yet when it ends at twenty three dollars fifty cents,
Speaker 1: that was a great story. And they raised about in
Speaker 1: that first day, they raised about fifty four million dollars. Uh. Meanwhile,
Speaker 1: at this time in Amazon's history, they had a deficit
Speaker 1: of nine million dollars, even despite the fact by the
Speaker 1: end of the year they had made a hundred and
Speaker 1: forty seven point eight million sales. Yeah. See, the problem
Speaker 1: was that again, their their costs were greater than the revenue. Uh.
Speaker 1: They never are once had a profitable quarter that year. Uh,
Speaker 1: it was every single quarter. They were operating at a loss.
Speaker 1: But they were making more and more money each time. Yea.
Speaker 1: And they were also I mean they opened a second
Speaker 1: distribution center on the east coast of the United States
Speaker 1: in Delaware. Do you know why in Delaware? I do
Speaker 1: not know why Delaware. So anyone who's traveled in the
Speaker 1: Northeast will understand this, because everyone who lives anywhere close
Speaker 1: to Delaware goes to Delaware to do their shopping. Delaware
Speaker 1: does not have a state sales tak one of those places. Yeah. Yeah,
Speaker 1: my wife is from Philadelphia, so whenever we do any
Speaker 1: sort of shopping in the Northeast, we take little road
Speaker 1: trip to Delaware. Uh. This is not by my choice
Speaker 1: because I much preferred convenience over saving a buck twenty
Speaker 1: five honey, I'll pay you back, I'll go out, and
Speaker 1: I'll work an extra podcast if you need me to.
Speaker 1: I don't want to go to Delaware. By the way,
Speaker 1: Delaware is lovely. I just don't want to go on
Speaker 1: the I'm sure the drive is gorgeous. Taking the mud
Speaker 1: if you can go like a mile down the street
Speaker 1: versus a state over. But my Ohio just came out
Speaker 1: by by referring to as a stick in the mud.
Speaker 1: That was really that's okay. I would hate to think
Speaker 1: of what the southern version of that would be. I
Speaker 1: wouldn't even be abill tell you, because I'm a nice person.
Speaker 1: I don't call people things like that anyway. So also,
Speaker 1: they became the first online retailer to to one million customers,
Speaker 1: and uh, and you know this, this is kind of
Speaker 1: interesting to you. You sit there and think about the
Speaker 1: fact that Bezos kind of had this vision of totally
Speaker 1: revolutionizing the way people do shopping, and and at first
Speaker 1: you might think, well, that's just ridiculous, But then It
Speaker 1: really wasn't that long ago that we had before before
Speaker 1: the era of department stores. So the department store era
Speaker 1: totally revolutionized the way people did shopping. Yeah, it's I mean,
Speaker 1: you know it's there. There's more than one thing that
Speaker 1: you sell here. You sell different types of things. I
Speaker 1: can go to a different department and get clothing, and
Speaker 1: then another one and get some housewares, and it's it's
Speaker 1: it's not a general store where your selection is limited
Speaker 1: by the actual tiny space or if you want to
Speaker 1: go back even further. Uh, you know, you're talking about
Speaker 1: buying things directly from the people who made them, or
Speaker 1: from a traveling salesman, as is depicted in the documentary
Speaker 1: music Man Um The But yeah, the uh, this wasn't
Speaker 1: really that unusual to say we could completely revolutionized Lawrence.
Speaker 1: Just it was just here, I was gonna be okay,
Speaker 1: but I was like, no, it's the slow disapproval shake
Speaker 1: of the head for the music Man reference, and I
Speaker 1: could not make it through the sentence. But no, the
Speaker 1: you know, it really wasn't that big of a stretch.
Speaker 1: It just was hard to see at the time because
Speaker 1: what was so new. Yeah, it was so new and
Speaker 1: not that many people. I mean, I mean, goodness, my gracious,
Speaker 1: that was still you know, people were still on geo cit.
Speaker 1: Let's not talk about it like it was that long ago,
Speaker 1: because I was well out of college and married by then,
Speaker 1: so I was in high school. Shut up anyway. So
Speaker 1: so so anyway, ninety seven comes to an end. That
Speaker 1: was a big, big year for Amazon. And talk about
Speaker 1: a big year. They hit a high of three hundred
Speaker 1: and sixty one dollars per share um and uh and
Speaker 1: really in I'm not I'm gonna go back to nine
Speaker 1: in a second. They ended up splitting the stock a
Speaker 1: couple of times. Now, on a stock split, what you're
Speaker 1: doing is, you know, you're taking the amount stock you have,
Speaker 1: you increased the number of stocks based upon that, and
Speaker 1: you then reduce the uh, the the value of each
Speaker 1: individual stock, so that the value of the company remains
Speaker 1: the same, but you can sell to more people, right right,
Speaker 1: So suddenly you have twice as much stock. It's worth
Speaker 1: the same amount collectively what you had before. But now
Speaker 1: if you wanted to sell half of it off, you
Speaker 1: would still have a sizeable amount um. And so they
Speaker 1: did that a couple of times, and they did it
Speaker 1: in a three to one split, which reduced the the
Speaker 1: the price to just over a hundred dollars per share. Uh,
Speaker 1: back in, but we'll get into that in just a second.
Speaker 1: They also bought another little website that you may have
Speaker 1: heard of, the Internet Movie dat Database. Yeah. Yeah, what
Speaker 1: a pleasant place that can be. That's I never never
Speaker 1: read the comments on anything. And it's still it's still
Speaker 1: much more civil than YouTube. Um, but then so was
Speaker 1: Moss Eisley. Uh, but yeah, I am dB. Yeah, let's
Speaker 1: say they purchased that. So, uh, it was an interesting
Speaker 1: move again because for a moment you sit there and say, well,
Speaker 1: what's up with that? And then uh, if you knew,
Speaker 1: if you knew where Amazon was going. And except for
Speaker 1: the fact that at the time they had still been
Speaker 1: selling just books. Yeah, that's all they sold. All they
Speaker 1: sold up until they also opened to Amazon stores music
Speaker 1: and DVD video. That's right. And so you think about
Speaker 1: the reason why they started with just books was that
Speaker 1: it was it was something that was scalable and it
Speaker 1: was a manageable business. And also he had the benefit of,
Speaker 1: like I said, those two big distributors with their exhaustive databases,
Speaker 1: a lot of the work was already done. Now that
Speaker 1: he's raised money, Bezos, that is, now the Basos is
Speaker 1: raised money and the companies raised money, the company could
Speaker 1: start to look into diversification, which was kind of the
Speaker 1: plan all along, but really starting with books was the
Speaker 1: most important step. So once they opened up the music
Speaker 1: and DVD stores. Music, by the way, we're talking about
Speaker 1: hard mediads. We're not talking about digital files yet. Um.
Speaker 1: You know. Once he did that, Basos also came up
Speaker 1: with another decision which was an important one in Amazon's
Speaker 1: um existence, and that was that he wanted to have
Speaker 1: a lot of control over all of this. It's one
Speaker 1: of the reasons why it was very it was very
Speaker 1: important to him for Amazon to own its own warehouses.
Speaker 1: And the reason for that was that if a customer
Speaker 1: put in an order and asked for say, books from
Speaker 1: different publishers as well as a c D and a film,
Speaker 1: all of that could be placed in one box and
Speaker 1: sent to the customer, as opposed to Okay, here's here
Speaker 1: and all of these losses or or have to pass
Speaker 1: that on to the customer and just everyone gets angry,
Speaker 1: right yeah, or you know, they get two thirds of
Speaker 1: their order but the final third is lost. Or now
Speaker 1: this way, it gave a lot more control to Amazon.
Speaker 1: That was very important to Bezos. So uh, he had
Speaker 1: these warehouses and decided to make use of them in
Speaker 1: that way. So here's an example I have created and
Speaker 1: uh and listeners, you have a challenge here. The challenge,
Speaker 1: listeners is to find out how each one of the
Speaker 1: items I'm about to list has a connection to me.
Speaker 1: Because I'm an egomaniac and the universe revolts. Here's my example. So,
Speaker 1: I want to order the Kim McKee book Atlanta Bones.
Speaker 1: I also want to order a CD of a production
Speaker 1: of The Rats and the Walls, which was, you know,
Speaker 1: an HP Lovecraft story that was produced by the Atlanta
Speaker 1: Radio Theater Company. And I want a copy of the
Speaker 1: film on DVD. I want a copy of the Signal.
Speaker 1: So if I put all those orders in on Amazon,
Speaker 1: because they have these warehouses where they have all the
Speaker 1: different types of media together, they can put that all
Speaker 1: in one package and send it to me and I
Speaker 1: get it all in one neat delivery. And uh. So again, listeners,
Speaker 1: tell me how I'm connected to all three of those things. Uh.
Speaker 1: They may not be the same connection in each case,
Speaker 1: by the way, it may be different connections. Moving on,
Speaker 1: they also launched the uh the Amazon Advantage program, which
Speaker 1: let companies and creators sell their works through Amazon. They
Speaker 1: also acquired major booksellers in the UK and Germany. Uh
Speaker 1: and yeah, it was more before the end of the year.
Speaker 1: Um and and remember last year they had hit one
Speaker 1: million customers. By the end of had hit three million. Yeah,
Speaker 1: so so lots of growth. They're still, of course, not profitable. Uh.
Speaker 1: Do you have anything else, because that's that's what I got.
Speaker 1: All right, let's move on to h They opened up
Speaker 1: another fulfillment center. I like that they call them fulfillment centers.
Speaker 1: It sounds very you know, zen, it reminds me of
Speaker 1: gladows honestly, but welcome to the fulfillment center. Uh huh,
Speaker 1: that's not bad. But anyway, this one was in a
Speaker 1: friendly Nevada. Now, the reason for opening in Nevada not
Speaker 1: having to do directly with that state's sales tax. It
Speaker 1: was actually more to do with the state of California.
Speaker 1: They wanted to have of a fulfillment center that was
Speaker 1: closer to California to deliver to California more quickly. But
Speaker 1: California's sales tax is uh is fairly complex. And also
Speaker 1: you know, it's something that that Amazon did not want
Speaker 1: to deal with, so instead of opening up a fulfillment
Speaker 1: center within the state, they opened it in Nevada. I
Speaker 1: think they opened actually three other fulfillment centers other than
Speaker 1: that one, and I have not written down where they are. Yeah, well,
Speaker 1: at this point forward, they start opening up all the points.
Speaker 1: Actually there was another point Bezos said, uh that there
Speaker 1: was a point where he had a discussion with his
Speaker 1: the other members of the executive team at Amazon, and
Speaker 1: they were saying that he should open up four fulfillment centers,
Speaker 1: and he said, no, we should open five fulfillment centers.
Speaker 1: And they all balkedd that because I said, well why
Speaker 1: we we we need for what we can use is
Speaker 1: for right and uh And he ended up getting his way.
Speaker 1: Often gets his way, note not all the time. And yeah,
Speaker 1: there's sometimes where he talks about how some of his
Speaker 1: employees like came up to him and gave him a
Speaker 1: suggestion and he said that sounds like too much trouble,
Speaker 1: and then they went ahead and did it anyway and
Speaker 1: then came to him with the solution. He's like, no one,
Speaker 1: no one listens to me around here, but thank you anyway, Um,
Speaker 1: they did listen to him at this top point, and
Speaker 1: they built the five fulfillment centers and uh and as
Speaker 1: as it turns out, because of the the incredible growth
Speaker 1: in customer base and orders and sales, that fifth fulfillment
Speaker 1: center was necessary for them to maintain the customer service
Speaker 1: that they had established. Again, just another very forward thinking,
Speaker 1: very I like that phrase. I just I just realized, yes, alright, no,
Speaker 1: that's fine, go ahead, let's let's promote it. Um, yeah, no,
Speaker 1: you know, I agree. It was. It was very important
Speaker 1: for him to uh, to think ahead and to anticipate that.
Speaker 1: You know, it wasn't just that they could not have
Speaker 1: done the job with four they might they might have
Speaker 1: been able to, but with five they were able to
Speaker 1: do it and ensure the customer service level that they
Speaker 1: had already established. Yes, with the sort of growth they
Speaker 1: were experiencing at the time. UM. Yeah, See, at that point,
Speaker 1: their market value was about twenty two point one billion dollars,
Speaker 1: which meant that they were more valuable than Kmart and J. C.
Speaker 1: Penny combined. And keep in mind, this is before Kmart
Speaker 1: had its financial problems. Um. They also opened six new
Speaker 1: stores on Amazon dot Com. Consumer electronics, toys and games,
Speaker 1: home improvement software, video games, and gift ideas is grown
Speaker 1: in there. Gift gift ideas is one of those UH
Speaker 1: user experiences that is also really critical to the way
Speaker 1: that Amazon has grown and become uh the leader in
Speaker 1: online sales. Yeah, they they really invested heavily in getting
Speaker 1: programmers to design algorithms that would help customers in their
Speaker 1: shopping so that and really help Amazon ultimately to help
Speaker 1: Amazon stuff. You have the idea that you know, are
Speaker 1: customers who were interested in this also looked at blah
Speaker 1: blah blah, or hey, you bought this thing, you might
Speaker 1: also want this thing. All of those recommendations that you
Speaker 1: get every single time that you get on Amazon are
Speaker 1: are based on a lot of your of what you're
Speaker 1: looking at, what people that you know might be looking at,
Speaker 1: what other people who yeah, and what other people who
Speaker 1: purchased the same thing you bought what you know, things
Speaker 1: they found useful. There have been times where I that
Speaker 1: service has been invaluable to me where I've purchased something
Speaker 1: and I said, hey, you bought this thing. If you
Speaker 1: wanted to work, you may also want this thing, Like, well, yes,
Speaker 1: I do want it to work, I will buy that thing,
Speaker 1: and sure enough, I mean it wasn't It wasn't opportunistic
Speaker 1: and it was genuinely helpful to me. So, uh, you know,
Speaker 1: it sounds like it can be opportunistic, and I guess
Speaker 1: in some cases it can be, but ultimately it's trying
Speaker 1: to give the consumer the best experience, because if it's not,
Speaker 1: then it isn't working and it's just a distraction. Um. Also,
Speaker 1: this is what makes some of those really snarky Amazon
Speaker 1: dot com uh product reviews so incredibly entertaining. If you've
Speaker 1: ever found one of the products that just has people
Speaker 1: writing up complete farcical yeah, really, there's there's a Two
Speaker 1: of my favorites are the bick for her. Yes, those
Speaker 1: are so those are so funny. That was delightful that
Speaker 1: that was. That was bigs adventure into pens for women
Speaker 1: and they were all pastel colors and I guess ergonomic
Speaker 1: for lady fingers. I'm not sure that means fingers belonging
Speaker 1: to a lady. Not the delicious not the delicious snack
Speaker 1: kick Um that that one. And my my current favorite
Speaker 1: is that banana slicer. Oh, yes, yes, that's a good one.
Speaker 1: Now there's a whole bunch too. There's one that's like
Speaker 1: for gallons of milk. There was one that was for
Speaker 1: for for specific kind of warning tape. Uh, it was
Speaker 1: a kind of duct tape. There was one for uh,
Speaker 1: for enriched uranium. There's some fun ones out there. And
Speaker 1: and the nice thing is is that because Amazon's algorithms work,
Speaker 1: it actually will point you to other ridiculous products that
Speaker 1: also have and I don't delightful. I don't know that
Speaker 1: that's intentional, but it does work, and it's funny. It's
Speaker 1: a great way to lose an entire afternoon. By the way,
Speaker 1: they also ended up launching a product called Amazon Auctions,
Speaker 1: which was kind of their answer to eBay. Um. It
Speaker 1: ended up not really getting a lot of traction and uh,
Speaker 1: and eventually they would abandon Amazon Auctions. And that's not
Speaker 1: unusual in fact for Amazon. They've They've got quite a
Speaker 1: few projects that they ultimately either phased out or made
Speaker 1: or reincorporated in a different way, kind of took down piecemeal.
Speaker 1: Z Shops is another thing that they opened, which was
Speaker 1: their third party retailer outlet. Yeah, they eventually phase that
Speaker 1: out in favor of the marketplace. But yeah, that's another
Speaker 1: that's a great example that was where they built in
Speaker 1: all these features and then they said, this isn't working.
Speaker 1: Let's rebrand it. Let's let's let's tweak it, maybe incorporate
Speaker 1: some of the stuff and something new. They also wired
Speaker 1: a company called tool Crib of the North. They inquired
Speaker 1: they acquired their online and catalog sales. There was a
Speaker 1: great story about Bezos saying talking about how how to
Speaker 1: make it profitable to to ship a one ton drill press.
Speaker 1: That was kind of funny. Um, like you said, they
Speaker 1: started offering up lots of other products in various categories. Um. Oh,
Speaker 1: and from a great article and Wired. I know I
Speaker 1: mentioned Wired all the time, but they really do some
Speaker 1: great stuff. And they in edition of Wired, in an
Speaker 1: article called the Inner Bezos. Uh, there was a quote.
Speaker 1: One thing to keep in mind, this is from Bezos.
Speaker 1: He says is for many of these people, meaning the
Speaker 1: people who are suddenly wealthy in Amazon, the wealth that
Speaker 1: they have is paper wealth, and it will exist at
Speaker 1: that level only for as long as we continue to
Speaker 1: serve our customers. Well, so what he's staying here is
Speaker 1: that there were people in Amazon who had become millionaires
Speaker 1: because they owned stock in the company, and the company
Speaker 1: stock was on the rise, and Basis was pointing out like, well, yeah,
Speaker 1: if you look at it on paper, we're millionaires, but
Speaker 1: in reality, if we would have to cash out and
Speaker 1: liquidate all those assets in order to really be millionaires.
Speaker 1: And so we have a responsibility to keep our company moving,
Speaker 1: moving ahead and being in good shape. This is incredibly
Speaker 1: important because this is what I'm saying in n and uh.
Speaker 1: Well but before were no, no, no, I'm gonna say
Speaker 1: like in a in a year, that's going to be
Speaker 1: a very ympathetic thing, right, Yeah, And and yes, that
Speaker 1: that was the was also the year that Basis was
Speaker 1: named Times Person of the Year. Yeah, that's a big deal.
Speaker 1: And also, um, that was the year that Barnes and
Speaker 1: Noble made a move that was potentially scary for Amazon.
Speaker 1: They purchased Ingram, one of those two of the giants
Speaker 1: distributors and Barnes and Noble and Amazon obviously competed in
Speaker 1: the space of as far as booksellers go, and and
Speaker 1: Barnes and Noble was probably out of all the other
Speaker 1: brick and mortar stores. They were the ones doing the
Speaker 1: doing the best job, and they were extremely savvy. They
Speaker 1: have been for for basically their entire and in the
Speaker 1: publishing industry as compared to other big box stores, to say,
Speaker 1: for example, Borders that didn't make it. Yeah, and and
Speaker 1: really Barnes and Noble and Amazon had been competing quite
Speaker 1: a bit, uh and so that that kind of raised
Speaker 1: some potential threats. But but Amazon was actually working very
Speaker 1: hard to create relationships directly with publishers. So since you
Speaker 1: skip the distributor entirely and you go straight to the publisher,
Speaker 1: this would of course change even more in the future
Speaker 1: when we talk about the publishing, right, we're still years
Speaker 1: away from that. Um and then uh, we kind of
Speaker 1: move into two thousand and this is this is a
Speaker 1: monumental year on the web. It's also where we're going
Speaker 1: to conclude the episode. Uh, two thousand is when in
Speaker 1: March two thousand, Specifically, in fact, if you want to
Speaker 1: get really specific, March two thousand is when the the
Speaker 1: dot com bubble burst. Now, this was something that happened
Speaker 1: because the web was seen as this wild West land
Speaker 1: of opportunity. It was like the gold rushed Yeah. Yeah, Ever,
Speaker 1: everyone was was out in uh Silicon Valley and doing
Speaker 1: crazy stuff, and everyone was really psyched about it and
Speaker 1: running around, and everyone's saying like, this is the way
Speaker 1: we're gonna be able to print our own money. Essentially,
Speaker 1: we're gonna be uh, we're gonna be so rich. And
Speaker 1: you have lots of dot com companies going public and
Speaker 1: raising crazy amounts of money in in crazy stock deals,
Speaker 1: and employees being paid in stock and said like, okay,
Speaker 1: well we can't afford to actually pay you a paycheck,
Speaker 1: but here here's a here's ten thousand shares in the company.
Speaker 1: You are surely nothing will go wrong overnight. You're a millionaire.
Speaker 1: So just like Basis was saying, like on paper, these
Speaker 1: people were millionaires. But the problem was that the expectations
Speaker 1: of how the web was going to deliver versus the
Speaker 1: reality of what it actually could deliver didn't match up.
Speaker 1: And then investors started getting scared because they're saying, wait
Speaker 1: a minute, I thought this was gonna just be a
Speaker 1: license to print money, but now I'm not seeing any
Speaker 1: return of my investment. I'm getting out right and and
Speaker 1: and there were a lot of reasons for it. I mean,
Speaker 1: there was an infrastructure problem where you know, not not
Speaker 1: enough people were online, and there were a lot of
Speaker 1: companies that were just terrible at managing their funds. This
Speaker 1: is one of those things I've talked about in the past,
Speaker 1: how a small company could get a huge amount of
Speaker 1: money and then mismanage it terribly because they that wasn't
Speaker 1: what they were expecting, Like they're they're operating costs would
Speaker 1: have been at a certain level. They raised way more
Speaker 1: money than that, and then they say, well, heck, let's
Speaker 1: get a penthouse for everyone. Everyone gets a super cool
Speaker 1: desk made out of steel and glass. We're all lex
Speaker 1: Luthor in this world. And then, you know, eventually they think, oh,
Speaker 1: wait a minute, we were supposed to deliver something for
Speaker 1: all that money they gave us instead of just you know,
Speaker 1: giving ourselves these amazing offices, and things started to fall apart,
Speaker 1: and uh, you know, it's not that the people were
Speaker 1: necessarily bad people, it's just that things didn't and uh.
Speaker 1: And actually Amazon was hurt by this in multiple ways,
Speaker 1: one of which was that, you know, unlike the other companies,
Speaker 1: it had not expanded so um, but they did invest
Speaker 1: invested a lot of other stuff and took dramatic losses. Yeah,
Speaker 1: like Pets dot com, Living dot com, Cosmo dot com.
Speaker 1: He said specifically, here's another quote from that article. We
Speaker 1: invested in a lot of high profile flame outs. The
Speaker 1: only good thing is we had lots of company. It
Speaker 1: didn't take us off our mission, but it was a
Speaker 1: waste of capital. So in other words, you know, a
Speaker 1: company that already has not turned a profit has lost
Speaker 1: more money in bad investments. This would not be the
Speaker 1: only time this happens. To get some other utments coming
Speaker 1: up in our next episode. Yeah, but I mean, I mean, meanwhile,
Speaker 1: they I mean, a lot of stuff happened for Amazon
Speaker 1: in two thousand. They launched Amazon France, Amazon Japan, UM,
Speaker 1: and Uh, they launched Marketplace, which would would eventually replace
Speaker 1: z shops. At this point they were two separate entities.
Speaker 1: Um they started selling kitchen goods and also Cameron Photo. Yep,
Speaker 1: so you know, Amazon still diversifying. But but two thousand
Speaker 1: was a tough year. And that was a tough year
Speaker 1: for companies across the web. We saw lots and lots
Speaker 1: of them fold and we even saw big ones like
Speaker 1: Amazon take a hit. And uh, and that's a good
Speaker 1: place for us to wrap up. In our next episode,
Speaker 1: we will talk about how Amazon went from pros possibly
Speaker 1: the lowest point of the company as far as the
Speaker 1: market value is concerned to really turning it around and
Speaker 1: becoming you know, a juggernaut again in industry, and and
Speaker 1: again that's another way of pointing out that there is
Speaker 1: no such thing as being too big to fail. And
Speaker 1: also we'll learn more about Bezos's fascination with space, but
Speaker 1: that's that's in our next episode. So guys, if you
Speaker 1: have any requests for things that we should cover in
Speaker 1: future episodes of tech Stuff, I highly recommend you get
Speaker 1: in touch with us. Let us know in an email
Speaker 1: our addresses tex stuff at Discovery dot com, or drop
Speaker 1: us a line on Facebook for Twitter or handle up
Speaker 1: both those locations. Is text Stuff H. S. W and
Speaker 1: Lauren and I will talk to you again about Amazon
Speaker 1: as it turns out really soon. For more on this
Speaker 1: and thousands of other topics, is it how stuff works
Speaker 1: dot com