Jeff Bezos early interview, Why Amazon started as a book store

when you have that many items, it literally build a store online that couldn’t exist any other way

Transcript :

00:09
rather who are you I’m Jeff Bezos and
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what was your claim to fame and the
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founder of amazon.com where did you get
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an idea for amazon.com well three years
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ago I was in New York City working for a
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quantitative hedge fund when I came
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across the startling statistic the web
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usage was growing at 2,300 percent a
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year so I decided I would try and find a
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business plan that made sense in the
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context of that growth and I picked
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books as the first best product of saw
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online which making a list like 20
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different products that you might be
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able to sell and books were great as the
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first best because books are incredibly
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unusual in one respect that is that
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there are more items in the book
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category and there are items than any
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other category by far music is number
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two they’re about two hundred thousand
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active music CDs at any given time but
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in the book space they’re more than
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three million different books worldwide
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active and printed any given time across
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all languages what more than one and a
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half million in English alone so when
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you have that many items it literally
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build a store online that couldn’t exist
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any other way that’s important right now
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because the web is still an infant
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technology basically right now if you
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can do things using more traditional
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method you probably should do them using
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the
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traditional method what kind of
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inventory do you
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we inventory the best-selling books at
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any given time we’re inventory in our
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own warehouse only a couple of thousand
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titles and then we have we do almost in
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time inventory for another 400,000
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titles or so we get those from a network
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of electronic we order electronically
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from a network of wholesalers and
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distributors we order those today
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they’re on our loading dock the next
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morning then for another 1.1 million
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titles we get those directly from 20,000
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different publishers and those can take
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a couple of weeks to get and then the
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there are a million out of print books
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in our catalog we have a callow two and
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a half million books all together those
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million out of print books some of them
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we can get some of them we can’t but we
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find them if we can and then we ship in
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to our customers who kind of a search on
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those what’s almost in time inventory
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almost in time inventory is the phrase
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we use to describe a whole selection of
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books that we offer it’s basically the
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things that are you know below mm
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best-selling book up to the 400,000
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bestseller book those are titles that we
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can get from a network of more than a
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dozen different wholesalers so if a
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customer orders a book from us today
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we order that book from our wholesalers
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today
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that book shows up on our loading dock
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the next morning and then we can ship it
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to the customer they say one of the
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toughest things to do in the Internet is
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to tap from mind share what was your
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secret how did you move it yeah even
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more generally I agree with you that you
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know capturing mind share on the
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Internet is extremely difficult even
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more generally it’s the late 20th
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century not just the internet you know
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capturing attention attention is too
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scarce commodity of the late 20th
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century and one of the ways that you can
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do that and it’s the way that we did it
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was by doing something new and
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innovative for the first time it
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actually has real value for the customer
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that’s a hard thing to do but if you do
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do that then newspapers will write about
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you what you’re doing customers will
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tell other customers and we’ll get a
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huge word-of-mouth fan out and and that
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can really drive and accelerate
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businesses and that’s what happened with
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us in the first year of opening
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amazon.com to the public we didn’t do
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any paid advertising and all of our
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growth was fueled by word-of-mouth and
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media exposure I saw a little ants at
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the bottom of the column of the New York
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Times that was our very first
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advertising we don’t do that anymore but
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at the very beginning we did little tiny
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ads at the bottom of the front page of
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the New York Times I thought that was
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very clever of sort of using a URL as a
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macro because I read expand we’re a
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bookstore click here right that’s a
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great way to think of it and it worked
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very well I’ve been a baron I don’t know
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you know the problem with that kind of
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advertising is it’s extremely difficult
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to track
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putting up an URL for every that’s the
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problems you want people to start to
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learn your URL so you don’t want to
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actually use a different one and it’s
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very easy one of the great things about
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online ads we do advertising today and
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maybe 40 different different websites we
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do banner ads and that advertising is
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very easy to track in terms of knowing
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how effective it is so we know for each
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piece of creative in each venue not only
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how many click throughs we get but how
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many sell-through is we get how many
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dollars of revenue generates per ad
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dollars spent on that creative in that
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venue that is a sort of a marketers you
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know Nirvana certain sense well it’s an
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exciting place to be on the web right
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now oh it absolutely is I mean it’s just
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incredible this is what’s really
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incredible about this is that this is
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day one this is the very beginning this
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is the Kittyhawk stage of electronic
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commerce we’re moving forward in so many
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different areas lots of different
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companies are as well in the late 20th
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century it’s just a great time to be
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alive you know we’re going to find out
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that I think a millennia from now people
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are going to look back and say wow the
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late 20th century was really a great
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time to be alive on this planet