If there is one thing Silicon Valley is not a stranger to, it is the intensity of the leaders who rule over it. Steve Jobs was famous as much for his volatility and his habit of firing employees in elevators as he was for his understanding of the customer and the insights that made Apple one of today’s most powerful brands. Microsoft’s Bill Gates and Steve Ballmer were known for their propensity for tantrums and Intel’s Andy Grove was said to be harsh and intimidating.
Little surprise, therefore, that Jeff Bezos fits a similar ‘I-know-best’ profile and while for most people creating ‘the Earth’s largest bookstore’ would have been achievement enough, it was not so for Bezos, who in his drive for almost manic expansion (he said he wanted to sell everything except aircraft carriers off Amazon) nearly bankrupted the company he strove to build.
The Everything Store is as much the story of the man behind the company as it is about the powerhouse that amazon.com is today. Through the lens of the people who worked with Bezos, Brad Stone offers an in-depth view of an otherwise private man who built up a corporate culture that thrived on relentless ambition, drive, thrift and innovation, and in doing so, also contrived to dismiss management compunctions such as consensus building, civil behaviour and stakeholder value. Illustrating the point, Stone quotes an observer as saying that Amazon executives “have an absolute willingness to torch the landscape around them to emerge the winner.”
Over and over Stone mentions Bezos’ peculiar laugh, deployed especially when others failed to meet his standards: “a mirthful bray that he leans into while craning his neck back” – even when nothing seems funny to anyone else. Rick Dalzell, Amazon’s former chief information officer described it thus: “You can’t misunderstand it, it’s disarming and punishing. He’s punishing you.”
This is a portrayal of the CEO as a hard task-master, a ruthlessness competitor, who when negotiating with book publishers tells his management to approach small publishers the way a “cheetah would pursue a sickly gazelle”. Then there are the hardball tactics Bezos used to acquire Zappos and Diapers.com, displaying no qualms about driving prices down, even at the risk of losing millions just so that they could no longer compete and be eventually forced to the negotiating table. Even when he finally manages to develop one of the most innovative products of its time, the Amazon Web Services (AWS), Bezos lowered the price unilaterally. Warned this would cause AWS to lose money for a long time he simply replied, “Great!”– he thought high profits would only attract competition.
This is also a story about a visionary whose obsession for perfection carried the risk of driving employees and stakeholders away. Failing to meet Bezos’s standards would set off what Amazon employees called the ‘nutter’. If you didn’t have the right answer, tried to bluff your way out of a tough situation, took credit for someone else’s work, or indulged in office politics – a blood vessel in Bezos’ forehead would start throbbing, unleashing the ‘nutter’, heavily garnished with put downs such as: “Are you lazy or just incompetent?” “I’m sorry, did I take my stupid pills today?” “Do I need to go down and get the certificate that says I’m CEO of the company to get you to stop challenging me on this?” “Are you trying to take credit for something you had nothing to do with?”
We also learn about Bezos’ fascination for all things sci-fi and his obsession for space travel. In fact, he has established (and at no mean cost) his own private space exploratory company called Blue Origin in Kent (Washington) aimed at driving down the cost of launching humans into space and developing the technology that will do so safely.
The book begins with Bezos as a young VP at D.E. Shaw, a computer driven hedge fund. It is there that he hits upon the idea of an ‘everything store.’ Realising he would not be able to achieve this all at once he decides to start with books. Realising that the venture could never be his while working for D.E. Shaw, he quits and the long quest for funding and then expansion to become ‘the everything store’ takes off. This is the heart of the book and it makes for a fascinating account of the difficulties and consistent failures Bezos faced off along the way. A lesser man might have given up or compromised, but Bezos, in many way prey to a syndrome similar to Steve Jobs’ ‘reality distortion field’, just kept going, entering new and non-complementary categories (from jewellery to toys), despite facing huge logistic problems; all the while fighting off Barnes & Noble, eBay, taking on Google and creating AWS. The key, perhaps, to his eventual extraordinary success being his ability with each successive failure to repurpose his every idea into something bigger.
No surprise then that Amazon was notoriously confrontational in its culture and people were expected to eschew social cohesion. This approach is outlined in one of Amazon’s 14 leadership principles; the company’s values were inculcated into new hires.
“Have backbone; disagree and commit; leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting. Leaders have conviction and are tenacious. They do not compromise for the sake of social cohesion.”
Then there is the financial stringency enforced by Bezos. Although he was oblivious to losing huge amounts of money in his determination to get his way; in fact profitability was often the least of his concerns (although it should not be forgotten that he had become a personally wealthy man), he was also notoriously mean spirited. Prime examples being his refusal to allow senior executives to fly business class, subsidise food in the company cafeteria, and perhaps most famously, his use of blond-wood doors repurposed as desks (a throwback to the early days when he started Amazon from his garage). No surprises that another one of the company’s leadership dictums was: “We do not spend money on things that don’t matter to customers. Frugality breeds resourcefulness, self sufficiency and invention.”
The book does occasionally exaggerate the originality of Bezos’ vision. Amazon was not the first online bookstore, or the first company to focus on low prices or even the first vendor of cloud computing services.
Yet the insights it contains are still the best regarding what makes the world’s largest e-tailer click and the story of a man who has now been forever planted among the pantheon of the ‘crazy ones’. Who think they can change the world – and do.
The Everything Store: Jeff Bezos and the Age of Amazon
By Brad Stone
372pp. PKR 1,195.
Available at Liberty Books.