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Jeff Bezos on Entrepreneurship and How Amazon Innovated



Transcript:

00:07
well I came across the fact this was
00:09
back in 1994 that web usage worldwide
00:13
web usage was growing at something like
00:15
twenty three hundred percent a year and
00:18
that was sort of wake-up call for me
00:20
that there was something going on and
00:21
you know many people at that point
00:23
hadn’t heard of the web they didn’t have
00:25
internet access this was the time of you
00:28
know twenty eight kilobit per second
00:31
modems and dial-up access and so on and
00:34
so on so it’s a very different age but
00:37
there was clear it was clear that there
00:38
was going to be something there and you
00:41
I realized you could make a bookstore on
00:43
the web that could hold more books than
00:47
a physical bookstore could ever hold it
00:49
could truly have universal selection and
00:51
of course you know since then we’ve
00:54
expanded that into other categories and
00:56
we keep pursuing that notion of Earth’s
00:58
biggest selection at Amazon well my
01:01
background was in computers and but
01:03
books were the first best product to
01:06
sell online as a happy coincidence I’ve
01:08
always been a big reader but that wasn’t
01:10
the reason that we chose books my real
01:11
compact my real passion was computers
01:14
and that’s how I was involved in this
01:16
world of the web back in 94 but books
01:19
was a great first best product to saw
01:22
online because books were very unique
01:24
and still are in one respect and that is
01:27
that there are more items in the book
01:29
category than there are items in any
01:31
other category there are millions of
01:32
books active and in print around the
01:35
world and the largest super store so
01:38
largest physical book super stores only
01:40
carry about a hundred 150 thousand of
01:43
those millions of different books so on
01:45
the web you could build something that
01:48
solved a real problem that people can’t
01:51
find some of these books that they want
01:53
to find they’re very good books but they
01:54
may be very narrow have a very narrow
01:57
audience and so we basically built
02:01
Amazon to make it possible for people to
02:03
find those hard to find books
02:13
yeah well we had to build all of the
02:17
software systems that did not only the
02:20
front in the website the piece that’s
02:23
most visible to people but also all the
02:25
backend systems that interface with
02:27
suppliers so that you can reorder items
02:30
and the systems that manage that picking
02:34
packing and shipping the fulfillment
02:35
part of the business and all those
02:37
things are very important in fact I’ll
02:38
tell you when many of the dot-com
02:41
companies went out of business when the
02:43
Internet bubble burst one of the reasons
02:46
is they hadn’t really put enough
02:47
attention into their back-end they
02:50
hadn’t put enough attention into what I
02:52
think some people consider the less
02:53
glamorous part of the business which is
02:55
the picking packing shipping but we’ve
02:57
done an extensive analysis and found out
02:59
the customers actually wanted to receive
03:00
their products
03:11
well for me I know I think it’s very
03:14
important to pursue your passions and if
03:16
you’re doing that the risks are often
03:17
not as great as they seem to be so for
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me when I thought about you know leaving
03:22
my job and starting this company I knew
03:25
there was a good chance that it wouldn’t
03:26
work but I also knew that when I was 80
03:28
years old and thinking back over my life
03:30
I would never regret having tried and
03:33
failed but I might regret having never
03:36
tried and when I thought about that way
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it didn’t actually seem like that big of
03:40
a risk
03:48
ie it’s a very rare idea that can be
03:51
done by a single individual almost
03:53
everything that is going to change the
03:56
world solve a problem improve something
03:59
these are usually big efforts and they
04:01
require you know teams a team working
04:04
together to really get something
04:05
important done and that has been the
04:08
story of Amazon comet every step along
04:11
the way we have had a team here that is
04:14
is making this work I mean I don’t know
04:17
even even at the smallest scale you have
04:20
to figure out how to get help from your
04:21
friends from your family members from
04:24
people that you can hire in those early
04:26
days I think without that it would never
04:29
work
04:37
well we think prior most important piece
04:40
of intellectual property is our brand
04:43
name and I think people and I think this
04:46
is very important for anybody who’s
04:47
going to start a company or market an
04:50
invention to understand is that brands
04:52
for companies are like reputations for
04:55
people and reputations are hard earned
04:58
and easily lost so the most important
05:01
intellectual property that a company can
05:03
have is for us it’s that it’s it’s it’s
05:06
Amazon it’s that name but what it stands
05:09
for we’ve worked very hard to earn trust
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you can’t ask for trust you just have to
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do it the hard way one step at a time
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you make a promise and then fulfill the
05:19
promise you say we’ll deliver this to
05:20
you you know tomorrow and then you
05:23
actually deliver it tomorrow and if you
05:27
do that over and over again then
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ultimately you can instill your
05:33
company’s name with a reputation and
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that’s I think you know sometimes people
05:37
talk about brands in this very amorphous
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way but for me I like to think of it as
05:42
a person and what is the reputation that
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that person has and how have they earned
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that reputation
05:52
you
05:55
well we think that fulfillment by Amazon
05:57
is a very important business for for
06:00
Amazon account so by offering it to
06:03
others we have this fulfillment capacity
06:05
let me let me back up and just say we
06:07
have these warehouses all over the world
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where we do our picking packing and
06:12
shipping and we’ve put a significant
06:15
investment into making those things work
06:17
extremely well be able to deliver
06:18
products very quickly have the products
06:20
close to customers so that you can get
06:22
them to customers fast an acceptable
06:24
cost and that’s a hard piece of
06:27
infrastructure to build it took us you
06:30
know over a decade to build that
06:32
infrastructure at a very significant
06:33
monetary cost in one of the ways we can
06:36
leverage that infrastructure is by
06:38
offering it to others for a fee and
06:40
that’s what fulfillment by Amazon is so
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for our point of view it’s just good
06:43
business but from an inventors point of
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view or a startup company’s point of
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view or any you know small retailers
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point of view or even big retailers it’s
06:53
an opportunity to use our infrastructure
06:56
to provide better services to your
06:58
customers so we will literally do the
07:00
picking packing and shipping for you and
07:04
send those things to your customers send
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those things to retail points of
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distribution for you and allow you to
07:11
focus on your idea instead of having to
07:14
pay this what really is an
07:15
undifferentiated price of admission and
07:18
you know that you would otherwise have
07:19
to figure out how to do on your own and
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it’s very important when you’re doing
07:22
something new not to reinvent the wheel
07:25
on stuff where you’re not actually
07:26
creating any new value and so
07:28
fulfillment by Amazon is really a great
07:31
thing for small startup companies it’s
07:33
completely self-service so you can come
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and you don’t have to negotiate a
07:38
multi-year contract with us you can use
07:40
it as little or as much as you want so
07:44
that I think is very you know basically
07:46
so just being a variable cost it’s not
07:49
something we have to pay a big upfront
07:50
fee you just use it as you need to use
07:53
it that’s actually a very innovative
07:55
change in the industry the second thing
07:58
is that we’re very good at sorting items
08:01
together we’re probably the best in the
08:03
world so if a customer buys more than
08:06
one item and they’re going to go in the
08:07
same box
08:08
we’re very very good at that a third
08:11
thing is that we’ve actually opened it
08:13
up to developers by these things called
08:15
Web Services API so if you’re if you’re
08:18
a software engineer programmer you’ll
08:20
know what that is
08:21
but that’s a way for people to embed
08:23
into their own systems that get in a
08:25
self-service way basically treat our
08:28
huge you know 10 million plus
08:30
square-foot fulfillment center network
08:32
as a giant computer peripheral they can
08:34
treat it like a printer and just command
08:36
this big network of buildings to do
08:39
things so they’re a bunch of innovations
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inside of our our fulfillment centers
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and we’re able to do this very
08:45
efficiently
08:53
well to me true innovation is something
08:57
that’s not only an invention but an
08:59
improvement and you know sometimes
09:02
things it’s not easy to make things
09:05
different I mean it’s not difficult it’s
09:07
not hard to make things different but it
09:09
is hard to make things different and
09:11
better most of the solutions most of the
09:13
problems in the world already have
09:15
solutions of one kind or another so all
09:17
of those solutions can be improved upon
09:20
there’s no chance that anything is
09:24
perfected yet I don’t believe that but
09:28
those all those solutions are highly
09:31
evolved and they’ve been you know people
09:32
been working on solutions to most
09:34
problems for a long time but still I you
09:37
know you know somebody wasn’t that long
09:39
ago somebody figured out that you should
09:41
add wheels to suitcases pretty good
09:43
improvement
09:55
well it’s hard work so it’s it’s easy to
09:59
have ideas it’s very hard to turn an
10:02
idea into a successful product there are
10:05
a lot of steps in between it takes
10:07
persistence relentlessness so I always
10:10
tell people who are you know who think
10:13
they want to be entrepreneurs it’s you
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need a combination of stubborn
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relentlessness and flexibility and you
10:24
have to know when to bewitch and
10:26
basically you need to be stubborn on
10:27
your vision because otherwise it’ll be
10:30
too easy to give up but you need to be
10:33
very flexible on the details because as
10:36
you go along pursuing your vision you’ll
10:38
find that some of your preconceptions
10:39
were wrong and you’re going to need to
10:41
be able to change those things so I
10:44
think taking an idea successfully all
10:47
the way to the market and turning it
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into a real product that people care
10:51
about and that really improves people’s
10:52
lives is a lot of hard work

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Abdallah Alaili

I'm a serial entrepreneur (mostly tech) and micro-investor (tiny), this is a blog to learn from other entrepreneurs and spread the wisdom to many more. You can find me on: Instagram - Twitter - Linkedin - more about me