Jeff Bezos as the CEO of Amazon
Jeff Bezos of Amazon.com is one of the most admired modern CEOs, well known for a forward thinking and aggressive expansion mindset that spreads fears in every direction his looks at.
We researched Jeff Bezos and Amazon extensively for our book Strategy for Executives, since the company (and its CEO) embody the type of multidexter leadership that our framework seeks to characterize.
We have assembled this short case using excerpts from the book, to give you a crash introduction to Bezos’ leadership style and explain some of his achievements as the CEO of Amazon. We have also included an interview where he talks about his role models and people who he looks up to.
We have complemented this information with information about his wife, MacKenzie Bezos, whose contribution was fundamental in the early days of Amazon.com, and included other subjects such as some ridiculous facts about Bezos’ vast wealth and also provide his contact information.
Table of Content:
- Jeff Bezos: CEO of Amazon.com
- Jeff Bezos Leadership Quotes
- Jeff Bezos’ wife MacKenzie Bezos
- Jeff Bezos’ Net Worth
- Jeff Bezos Contact Information
Jeff Bezos as the CEO of Amazon
Amazon (NASDAQ: AMZN) started as an online bookstore in 1994 focused on less popular “long-tail” book titles and rapidly grew into a behemoth of global ambitions, making its CEO Jeff Bezos, the wealthiest person on the planet.
On the day of its Initial Public Offering (IPO) on May 15, 1997, Amazon’s share price opened at $18, and at the time of writing it is approaching the $2,000 mark, becoming the world’s second trillion-dollar company, only behind Apple (NASDAQ: AAPL) but ahead of Alphabet (NASDAQ: GOOG), parent company of Google, and Microsoft (NASDAQ: MSFT).
Its market capitalization has grown more than two thousand times for an outstanding compound annual growth rate (CAGR) of around 45 percent during its 21 years as a public company. If you had invested $1,000 in Amazon’s IPO, that investment would have been worth more than $1.2 million in August 2018 when it reached the trillion-dollar valuation.
During this period, Bezos has led Amazon to become one of the largest companies in multiple markets.
For example, Amazon is currently the world’s largest player in eCommerce (through its Amazon.com marketplace) ahead of Walmart (NYSE: WMT), Target (NYSE: TGT) and Costco (NASDAQ: COST), web services (through Amazon Web Services) and voice assistance (through its Alexa device) markets.
The company is also the 10th largest grocer through its Whole Foods acquisition and the second largest video streaming platform through Amazon Prime, second only to Netflix (NASDAQ: NFLX) but bigger than Disney (NYSE: DIS) and HBO.
Despite its undeniable success, Amazon keeps adding new businesses and services to its portfolio at lightning speed. It currently owns more than 70 in-house brands and has completed over 85 acquisitions including notable ones like Audible in 2008, Zappos in 2009 and Ring in 2018.
Just like Jack Welch, Jeff Bezos has taken Amazon.com way beyond what was classically believed to be its “core business,” measuring market potential more in terms of the capability of its people and the opportunities at hand than in technical skills and expertise. “Your margin is my opportunity” is a phrase usually associated with Bezos that perfectly captures the way he thinks about the scope of his business.
Jeff Bezos’ Leadership Quotes
Bezos seems to be a very pragmatic, forward-thinking leader, who cares more about the future than he does about a quick buck today.
Here’s one of the most interesting interviews ever made to Bezos, where he talks about his leadership style, his inspirations, aspirations and role models.
Now let’s review a few of his most telling leadership quotes and moments where he has shown his true colors.
About his customer-centric vision: In the early days of Amazon.com, when confronted by mortified book publishers angered by all the bad book reviews that users were posting on the site, Jeff Bezos
In a rare interview with Harvard Business Review’s Adi Ignatius, Bezos said:
“When things get complicated, we simplify by saying what’s best for the customer? And then we take it as an article of faith if we do that, it’ll work out the long term. So we can never prove that. In fact, sometimes we’ve done a price elasticity studies, and the answer is always we should raise prices. And we don’t do that because we believe– and again, we have to take this as an article of faith– we believe by keeping our prices very, very low, we earn trust with customers over time, and that that actually does maximize free cash flow over the long term.”
About Competition: In an interview with a news outlet in India, when asked about competition, he said:
“At Amazon, we have a long history of obsessing over customers rather than competition. At every place we do business, we have great competitors. It is okay, that is how the world is supposed to work. I think we do well because we don’t think about that”.
In another interview he adds:
“Let’s say you’re the leader in a particular
On his Frugality: Bezos famously worked for years on a beat-up desk made up of a wooden door that he kept in his office even after he became a billionaire. In an interview with 60 Minutes, he said the old desk was a symbol of cost-effectiveness: “You don’t spend money on anything that doesn’t add value to customers” he said.
You may watch part of that interview in the video below:
Resources reallocation: As we explain in the book, there are cases where you can build important synergies by reallocating resources from poor-performing areas into high-growth businesses. When you simultaneously cut costs and resources in low growing areas inside your company and direct those resources to the units that are growing the fastest, the effect on your bottom line is multiplied.
As an example, we explained how in the midst of a massive layoff at the beginning of 2018, Amazon was reallocating people from low-performing units onto Alexa’s business divisions, right after the product helped the company achieve its first $2BB quarter. Amazon’s official statement about the layoffs was the following:
“As part of our annual planning process, we are making headcount adjustments across the company — small reductions in a couple of places and aggressive hiring in many others”… “For affected employees, we work to find roles in the areas where we are hiring.“
Bezos, excited about the success of Alexa said in a statement: “We don’t see positive surprises of this magnitude very often, expect us to double down.”
That’s Capital Allocation at its best.
About Amazon’s stock price: In the same Harvard Business Review interview that we mentioned before, Bezos, when asked about how much he cares about the stock price, said:
“I care very much about our share owners, and so I care very much about our long-term share price. I do not follow the stock on a daily basis, and I don’t think there’s any the information in it. Benjamin Graham said, “In the short term, the stock market is a voting machine. In the long term, it’s a weighing machine.” And we try to build a company that wants to be weighed and not voted upon.”
Jeff Bezos’ Wife MacKenzie Bezos
MacKenzie and Jeff Bezos first met while both worked at investment firm D.E. Shaw, where Jeff was a Vice President and MacKenzie a research associate.
In according to some accounts, it was MacKenzie who made the first move, inviting Jeff out to lunch, and within three months they were already engaged and married within six.
They got married in 1993, and shortly after the couple moved to Seattle to start Amazon.com. He was thirty-one, and she was twenty-four.
In according to Brad Stone, author of The Everything Store: Jeff Bezos and the Age of Amazon , the Bezos decided to start their company in Seattle because the city’s reputation as a technology hub, and because the state of Washington had a relatively small population, which meant that the company would only have to collect state taxes from a minor percentage of customers.
MacKenzie was Amazon’s first employee, managing the company’s accountant.
For a while, the couple was the richest in America, with a fortune that exceeded $150 billion at some point, almost as much as Bill Gates and Mark Zuckerberg, combined.
Jeff and MacKenzie Bezos announced their separation in 2019, amidst rumors that Jeff was seeing another woman.
Jeff Bezos’ Net Worth
Before the couple split, Jeff Bezos was really rich, and he still is, but sometimes is just difficult to imagine how rich $160 Billion was.
Jeff Bezos has said that the way he plans to spend most of his fortune is by funding space travel and the reason he founded his company Blue Origin. He currently liquidates $1 BB of his Amazon stock every year to fund his company’s race into space. In fact, with his money, he could have funded NASA’s entire budget for more than five full years.
Here are a few more ridiculous things that Jeff Bezos could have done with his fortune.
Give money Away: He could have given away a quarter million dollars to every single Amazon employee, which headcount at the time of this article was 563,100.
Daily Spend: In 2018 Jeff Bezos would have had to spend around $28 million a day, to avoid becoming richer.
Amazon Inventory: Amazon estimates it holds around $14.8 in inventory, which means that Bezos could have bought the entire inventory about ten times. Even more, he could have purchased all the merchandise held at the time by Amazon’s top 10 retail competitors: Walmart, CVS, Home Depot, Lowes, Costco, Walgreens, Target, Kroger, Best Buy, and Macy’s.
His Daily Check: In 2017, Jeff Bezos became richer at a tune of $107 million a day. In fact, spending $88,000 for him is like spending a dollar for the average American person.
Diversification: If Bezos wanted to diversify his investments, he could have bought the entire stock market of Ireland. If what he wanted was to diversify in more than one country, he could have bought all the public companies listed in Luxemburg and Egypt.
Jeff Bezos’ Contact Information
Although it may be hard to believe, Amazon’s CEO still reads emails from customers and gives his executives a hard time when he receives messages from angry customers.
In a now well-documented meeting, Bezos asked his Vice President of Customer Service Bill Price what the wait time was at their customer service call center.
Price said under one minute, without offering much detail. “Really?” Bezos said, “let’s see.” He then grabbed the phone in the middle of the conference room and dialed the 1800 number to see what happened.
The wait time was four and a half minutes, and Price was gone a few months later.
As a CEO, Jeff Bezos CEO truly cares about his customers and is willing to listen if you have something to say. Here’s Jeff Bezos’ contact information:
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Kokoszka, Pamela. Amazon’s domination: a timeline of key Amazon acquisitions. Verdict Media. URL: https://www.verdict.co.uk/amazons-acquisitions-retail-domination-timeline/
Bishop, Todd. Jeff Bezos explains why Amazon doesn’t really care about its competitors. GeekWire. URL: https://geekwire.com/2013/interview-jeff-bezos-explains-amazon-focus-competitors/
Stone, Brad. The Everything Store: Jeff Bezos and the Age of Amazon. Little, Brown and Company. Kindle Edition.
Jeff Bezos on Leading for the Long-Term at Amazon. Harvard Business Review. January 2013. URL: https://hbr.org/2013/01/jeff-bezos-on-leading-for-the
Sharma Punit, Itika. “We do well because we don’t think of competition: Jeff Bezos”. Business Standard. URL: https://www.business-standard.com/article/companies/we-do-well-because-we-don-t-think-of-competition-jeff-bezos-114092900061_1.html
O’Brien, Sara Ashley. Amazon lays off hundreds of employees. CNN Business. February 2018.
DeCambre, Mark. Amazon’s Jeff Bezos would need to spend $28 million a day to avoid getting richer. Marketwatch.com. URL: https://www.marketwatch.com/story/amazons-jeff-bezos-has-to-spend-28-million-a-day-just-to-keep-from-getting-richer-2018-08-01
Kopf, Dan. Jeff Bezos could buy all of Amazon’s inventory, and then buy all of Boeing’s and Walmart’s too. QZ.com. URL: https://qz.com/1367201/jeff-bezos-could-buy-everything-in-amazons-inventory/
Loudenback, Tanza; Gould, Skye. Jeff Bezos is so rich that spending $1 to the average person is like $88,000 to him — here’s what spending looks like when you’re a billionaire. Business insider. URL: https://www.businessinsider.com/jeff-bezos-worlds-richest-person-views-spending-money-2018-5
Karaian, Jason. Jeff Bezos is rich enough to buy many of the world’s stock markets outright. QZ.com. URL: https://qz.com/1330631/jeff-bezos-is-now-worth-150-billion-as-much-as-many-entire-stock-markets/