Jeff Bezos 1997 Interview

Rather, who are you?

I'm Jeff Bezos.

And what was your claim to fame?

I am 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 to sell online. I was making a list of 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 than there are items in any other category by far.

Music is number two; there are about two hundred thousand active music CDs at any given time, but in the book space, there are more than three million different books worldwide, active and printed, at 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 builds 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 a more traditional method, you probably should do them using the traditional method.

What kind of inventory do you have?

We inventory the best-selling books at any given time. We're inventorying in our own warehouse only a couple of thousand titles, and then we do almost in-time inventory for another 400,000 titles or so. We get those from a network of electronic wholesalers and distributors. We order those, and 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 there are a million out-of-print books in our catalog. We have a total of two and a half million books altogether. 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 them to our customers who kind of 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 the million best-selling books up to the 400,000 bestseller books. 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 on 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 is too scarce a commodity of the late 20th century. 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 that 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 and what you're doing. Customers will tell other customers, and we'll get a huge word-of-mouth fan-out, and that can really drive and accelerate businesses.

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 ad 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, 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 a URL for every... That's the problem. 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 on maybe 40 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-throughs we get, how many dollars of revenue are generated per ad dollar spent on that creative in that venue.

That is a sort of a marketer's, you know, Nirvana in a 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; this is day one. This is the very beginning. This is the Kitty Hawk 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."