>> Hi there. Who are you? ≫> I'm Jeff Bezos. ≫> And what is your
claim to fame? ≫> [laugh] I'm 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 that web usage was growing at 2300 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 for making a list of, like
twenty 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, and
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 200,000 active music
CDs at any given time. But in the book space there are more than 3,000,000
different books worldwide, active and in print in any given time across all
languages, more than one and a half million in English alone. So when you have
that many items it literally build a store online that couldn't exist any other way.
And 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 more traditional method. ≫> What kind of
inventory do you keep? ≫> We inventory the best-selling books at any
given time worth inventorying in our own warehouse, only a couple of thousand
titles. And then have, we do almost in time inventory for another 400,000 titles
or so. We get those from a network of electronic, we order, order electronically
from a network of wholesalers and distributors. We order those today,
they're on our loading dock the next morning. Then for another 1.1 million
titles, we get those directly form 25,000 different publishers, and those can take a
couple of weeks to get. And then the there, there are million of out-of-print
books in our catalog. We have a catalog of two one-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. We do kind of
a search on those. ≫> What's the almost-in-time inventory? ≫>
Almost-in-time inventory is the phrase we use to describe the whole selection of, of
books that we offer. It's basically the things that you know, below the 2000th
best selling book up to the 400,000th best selling book. Those are the titles 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 and 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 capture mindshare. What was your secret? How did you do that? ≫>
Yeah, even more generally, I agree with you that, you know capturing mindshare on
the internet is extremely difficult. You know more generally, it's the late
twentieth century, not just the internet. You know, capturing attention. Attention
is a scarce commodity of the late twentieth century. And, we, 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, what you're doing. Customers will tell other customers. And the, you'll get
a huge word of mouth fanout. And, and that can really drive and accelerate
businesses. And that's what happened with us. In the first year of opening
Amazon.com to the public we didn't do any paid advertising and all of our growth was
fueled by word-of-mouth and media exposure. ≫> I saw little ads at the
bottom of the column of the New York Times. ≫> That was our very first
advertising. We don't do that any more but at the very, 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. It's sort of using a URL as a macro because I, I read.
≫> And it expands. ≫> We're a bookstore, click here. ≫> Right,
that's a great way to think of it. ≫> And it worked very well
apparently. ≫> I don't know, you know. The problem with that kind of
advertising is it's extremely difficult to track. ≫> Put a different URL for
every [laugh]. ≫> That's the problem, you want people to start to learn
your URL. So you don't wanna actually use a different one. And, it's very easy. One
of the great things about online ads. We do advertising today in maybe 40
different, on, on 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 it generates per ad
dollar spent on that creative and that venue, and 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 is that 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 and lots of different
companies are as well. In the late twentieth Century it's just a great time
to be alive. You know, we're gonna find out that, I think, a millennium from now,
people are gonna look back and say, wow, the late twentieth Century was really a
great time to be alive on this planet.