From a Humble Start
For four hours in late July, Jeff Bezos surpassed Bill Gates as the richest person in the world.
Bezos fell back to third place (behind Gates and Spanish business tycoon Amancio Ortega) after Amazon stock retreated on a disappointing earnings report on July 27. Overnight, Bezos – who owns about 16% of the online retail behemoth he founded – lost $6 billion, bringing him down from his peak net worth of $90.6 billion, which was about $500 million more than Gates.
But what's a few hundred million between billionaires? Whether Bezos is first, second or third on the list, there's no denying that one of the Internet's first tycoons has changed multiple facets of society, starting with the way we shop while also touching on areas as varied as television, journalism and aerospace.
The most famous version of the Bezos bootstrap story starts with him selling books online from his Seattle garage in 1995 and goes all the way through Amazon's recent acquisition of Whole Foods Inc. for $13.7 billion, giving Amazon a massive and instant brick-and-mortar retail presence.
This guide seeks to fill in what happened between the humble start and today.
A Toddler With A Screwdriver
Born in Albuquerque, N.M. in 1964, Bezos is the son of Jacklyn and Ted Jorgensen. His mother was 17 and still in high school when he was born. At a young age Bezos showed curiosity for how things worked. He used a screwdriver to take apart his crib when he was only a toddler. When he was older, he built an alarm system to keep his siblings out of his room.
His mother and his biological father divorced when Bezos was one. When he was four, she married Miguel Bezos, who had moved to the U.S. from Cuba when he was 15. Bezos took his stepfather's name and shortly after the wedding, the family moved to Houston where Miguel worked for Exxon as an engineer.
The family eventually moved to Miami, where Bezos graduated high school as valedictorian. Bezos doubled majored in electrical engineering and computer science at Princeton, where he also was president of the school's chapter of Students for the Exploration and Development of Space.
Selecting a Name
Bezos worked on his business plan during the cross-country drive, initially choosing the name Cadabra Inc. When an attorney misheard the name as Cadaver Inc., Bezos began looking for a new name. He initially chose Relentless and still holds the relentless.com domain name, but friends said that the name sounded too sinister.
Bezos settled on Amazon after flipping through a dictionary because the place was "exotic and different." He also said that the Amazon River was the biggest river in the world and, even then, he planned on growing Amazon to the biggest store in the world.
His 'Regret Minimization' Framework
Bezos quit a high-paying job as vice president at a New York-based hedge fund and drove cross country to Seattle to found Amazon, a move he described as being part of his "regret minimization framework." The Princeton alum said the framework was a hedge against future regrets for not getting into the Internet business during the boom of the mid-1990's. At the time, Bezos was fresh off of reading a report that predicted Web retails was going to grow 2,300%.
Starting With Books
Bezos considered a list of 20 products to initially sell on Amazon, including computer hardware, CDs and videos. He settled on books because of their lower price points and the nearly infinite list of titles, as well as the worldwide appeal of reading.
To Bezos, being first in the space and establishing a brand was more important than the product being sold.
"There's nothing about our model that can't be copied over time. But you know, McDonald's got copied. And it still built a huge, multibillion-dollar company," he once told a reporter. "A lot of it comes down to the brand name. Brand names are more important online than they are in the physical world."
Fast Growth From The Get-Go
Bezos worked with Ingram Books and started filling orders out of the garage of his Bellevue, Washington home in July, 1995. Within two months he had filled orders to 45 countries and all 50 states, and sales were $20,000 per week.
While the customer base for his online bookstore was still small in 1995, the advantage was immediately obvious: while a traditional, big-box bookstore may have as many as 200,000 titles in stock, Amazon had an infinite inventory of titles.
Attacked in Court
Barnes & Noble sued Amazon three days before Amazon's initial public offering, claiming Amazon misrepresented itself by claiming it was the world's largest bookstore because it isn't a bookstore at all. It's a book broker." After settling the lawsuit out of court, Amazon continued to make the claim.
A 1998 lawsuit by Walmart claimed it had stolen trade secrets by hiring away executives. Amazon settled that suit out of court as well and reassigned former Walmart executives as part of an overhaul of its internal regulations.
Making No Profit Promises
The initial business plan Bezos presented to investors called for slow growth and its prediction the company would not make a profit for four or five years was seen as unusual. While investors complained about the slow rate of return, the slow growth strategy did allow Amazon to emerge as one of the few companies to survive the bursting of the dot-com bubble in 2000.
Amazon posted its first profit in the fourth quarter of 2001. While the $5 million in earnings on $1 billion in sales was seen as modest, it did allay fears about the slow-growth strategy Bezos had adopted.
The World's Worst Boss
The International Trade Union Confederation named Bezos "World's Worst Boss" in 2014, saying he "represents the inhumanity of employers who are promoting the North American corporate model." Meanwhile, a 2015 New York Times article described working for Bezos as "grueling and inhumane" and Amazon as "a soulless, dystopian workplace where no fun is had and no laughter heard."
Bezos responded, on the same day, to the Times article by writing a memo to employees. In it, he said the article did not portray Amazon as he saw it and urged employees to contact him directly if they felt the article's portrayal was accurate.
In addition to being the world's largest online retailer, Amazon is also the biggest supplier of online cloud infrastructure services. It has also moved into film and television programing to add offerings to its streaming video services. The company also produces its own line of consumer electronics, including the Kindle reader and the Echo smart speaker.
A Secret Race to Space
Bezos formed Blue Origin, a human spaceflight company, in 2000. Little was known about the company until 2006, when it purchased a huge tract of land in Texas for a test facility. The loss of a test vehicle in 2011 was seen as a setback, but also revealed how far engineers at the secretive firm had advanced. Like Elon Musk and Virgin founder Richard Branson, Bezos has said he formed the company to make space travel safer and more affordable.
"The vision for Blue is pretty simple. We want to see millions of people living and working in space," Bezos said in 2016. "That's going to take a long time. I think it's a worthwhile goal."
Bezos recently revealed he sells about $1 billion in Amazon stock per year to fund the company. Blue Origin, which designs reusable rockets, reportedly could begin commercial flights as early as next year.
Buying The Washington Post
Separate from Amazon, Bezos paid $250 million cash for the Washington Post in 2013. In 2016 he said he had accepted the first price offered by previous owner Donald E. Graham and conducted no due diligence before agreeing to buy the paper.
"This is uncharted terrain," Bezos told the newspaper's staff in 2014, ""and it will require experimentation." His first significant move as owner came in 2014 when he removed the paper's paywall for subscribers of a number of U.S. newspapers, including the Dallas Morning News and the Minneapolis Star-Tribune.
Investments, Big and Small
Bezos was among the first to hold shares of Google, purchasing 3.3 million for $250,000 in 1998. Today his stake in Google is worth more than $3 billion.
Through his Bezos Expeditions investment firm, Bezos has invested in a wide range of tech companies. Some of them, like Uber, Twitter and Business Insider are high profile while others, like the localized social network Nextdoor and Qliance, a healthcare company, are less well known.
Charitable Contributions, Big and Small
In addition to investments in at least 35 companies, Bezos Expeditions has also made a series of charitable contributions, including $10 million for the Bezos Center for Innovation at the Seattle Museum of History and Industry and $15 million for the Bezos Center for Neural Circuit Dynamics at Princeton Neuroscience Institute.
The Bezos Family Foundation is believed to mainly be funded by his parents through their Amazon holdings. The foundation gave a total of $30 million to the Fred Hutchinson Cancer Research Center. Separately, Bezos and his wife personally contributed $2.5 million to support Washington state's same-sex marriage referendum, which passed.
Bezos, has, however, been criticized for his level of charitable giving and has been likened to Steve Jobs, who made few donations. A 2014 report by Inside Sources noted that Bezos and Amazon gave far less than Microsoft and its founders, Bill Gates and Paul Allen.
Time named Bezos its 'Person of the Year' in 1999. He was also named 'Businessperson of the Year' by Fortune in 2012. Harvard Business Review gave him a similar honor in 2014, naming him 'CEO of the Year'. Bezo's has been named to the Forbes list of fifty great leaders of the world in each of the past three years, topping it in 2015.