Jeff Bezos - Founder of Amazon (5:39)

>> 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.