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The Secrets of Bezos

Amazon.com rivals Wal-Mart as a store, Apple as a device maker, and IBM as a data services provider. It will rake in about $75 billion this year. For his book, Bloomberg Businessweek’s Brad Stone spoke to hundreds of current and former friends of founder Jeff Bezos. In the process, he discovered the poignant story of how Amazon became the Everything Store.

Within Amazon.com (AMZN) there’s a certain type of e-mail that elicits waves of panic. It usually originates with an annoyed customer who complains to the company’s founder and chief executive officer. Jeff Bezos has a public e-mail address, jeff@amazon.com. Not only does he read many customer complaints, he forwards them to the relevant Amazon employees, with a one-character addition: a question mark.

When Amazon employees get a Bezos question mark e-mail, they react as though they’ve discovered a ticking bomb. They’ve typically got a few hours to solve whatever issue the CEO has flagged and prepare a thorough explanation for how it occurred, a response that will be reviewed by a succession of managers before the answer is presented to Bezos himself. Such escalations, as these e-mails are known, are Bezos’s way of ensuring that the customer’s voice is constantly heard inside the company.

One of the more memorable escalations occurred in late 2010. It had come to Bezos’s attention that customers who had browsed the lubricants section of Amazon’s sexual wellness category were receiving personalized e-mails pitching a variety of gels and other intimacy facilitators. When the e-mail marketing team received the question mark, they knew the topic was delicate and nervously put together an explanation. Amazon’s direct marketing tool was decentralized, and category managers could generate e-mail campaigns to customers who had looked at certain product categories but did not make purchases. The promotions tended to work; they were responsible for hundreds of millions of dollars in Amazon’s annual sales. In the matter of the lubricant e-mail, though, a low-level product manager had overstepped the bounds of propriety. But the marketing team never got the chance to send this explanation. Bezos demanded to meet in person.

At Amazon’s Seattle headquarters, Jeff Wilke, the senior vice president for North American retail, Doug Herrington, the vice president for consumables, and Steven Shure, the vice president for worldwide marketing, waited in a conference room until Bezos glided in briskly. He started the meeting with his customary, “Hello, everybody,” and followed with “So, Steve Shure is sending out e-mails about lubricants.”

Bezos likes to say that when he’s angry, “just wait five minutes,” and the mood will pass like a tropical squall. Not this time. He remained standing. He locked eyes with Shure, whose division oversaw e-mail marketing. “I want you to shut down the channel,” he said. “We can build a $100 billion company without sending out a single f-‍-‍-‍-‍-‍- e-mail.”

An animated argument followed. Amazon’s culture is notoriously confrontational, and it begins with Bezos, who believes that truth shakes out when ideas and perspectives are banged against each other. Wilke and his colleagues argued that lubricants were available in supermarkets and drugstores and were not that embarrassing. They also pointed out that Amazon generated a significant volume of sales with such e-mails. Bezos didn’t care; no amount of revenue was worth jeopardizing customer trust. “Who in this room needs to get up and shut down the channel?” he snapped.

Eventually, they compromised. E-mail marketing would be terminated for certain categories such as health and personal care. The company also decided to build a central filtering tool to ensure that category managers could no longer promote sensitive products, so matters of etiquette were not subject to personal taste. For books and electronics and everything else Amazon sold, e-mail marketing lived to fight another day.

Amazon employees live daily with these kinds of fire drills. “Why are entire teams required to drop everything on a dime to respond to a question mark escalation?” an employee once asked at the company’s biannual meeting held at Seattle’s KeyArena, a basketball coliseum with more than 17,000 seats. “Every anecdote from a customer matters,” Wilke replied. “We research each of them because they tell us something about our processes. It’s an audit that is done for us by our customers. We treat them as precious sources of information.”

It’s one of the contradictions of life inside Amazon: The company relies on metrics to make almost every important decision, such as what features to introduce or kill, or whether a new process will root out an inefficiency in its fulfillment centers. Yet random customer anecdotes, the opposite of cold, hard data, can also alter Amazon’s course.

It’s easy to forget that until recently, people thought of Amazon primarily as an online bookseller. Today, as it nears its 20th anniversary, it’s the Everything Store, a company with around $75 billion in annual revenue, a $140 billion market value, and few if any discernible limits to its growth. In the past few months alone, it launched a marketplace in India, opened a website to sell high-end art, introduced another Kindle reading device and three tablet computers, made plans to announce a set-top box for televisions, and funded the pilot episodes of more than a dozen TV shows. Amazon’s marketplace hosts the storefronts of countless smaller retailers; Amazon Web Services handles the computer infrastructure of thousands of technology companies, universities, and government agencies.

Bezos, 49, has a boundless faith in the transformative power of technology. He constantly reinvests Amazon’s profits to improve his existing businesses and explore new ones, often to the consternation of shareholders. He surprised the world in August when he personally bought the Washington Post newspaper, saying his blend of optimism, innovation, and long-term orientation could revive it. One day a week, he moonlights as the head of Blue Origin, his private rocket ship company, which is trying to lower the cost of space travel.

Amazon has a few well-known peculiarities—the desks are repurposed doors; meetings begin with everyone in the room sitting in silence as they read a six-page document called a narrative. It’s a famously demanding place to work. And yet just how the company works—and what Bezos is like as a person—is difficult to know.

Bezos rarely speaks at conferences and gives interviews only to publicize new products, such as the latest Kindle Fire. He declined to comment on this account, saying that it’s “too early” for a reflective look at Amazon’s history, though he approved many interviews with friends, family, and senior Amazon executives. John Doerr, the venture capitalist who backed Amazon early and was on its board of directors for a decade, calls Amazon’s Berlin Wall approach to public relations “the Bezos Theory of Communicating.” It’s really just a disciplined form of editing. Bezos takes a red pen to press releases, product descriptions, speeches, and shareholder letters, crossing out anything that doesn’t convey a simple message: You won’t find a cheaper, friendlier place to get everything you need than Amazon.

The one unguarded thing about Bezos is his laugh—a pulsing, mirthful bray that he leans into while craning his neck back. He unleashes it often, even when nothing is obviously funny to anyone else. And it startles people. “You can’t misunderstand it,” says Rick Dalzell, Amazon’s former chief information officer, who says Bezos often wields his laugh when others fail to meet his lofty standards. “It’s disarming and punishing. He’s punishing you.”

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