Jeff Bezos, the genius and monster

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iol scitech aug 12 Jeff Bezos


Jeff Bezos chose the name Amazon because it sounded wild and exotic.

London - Hands up everybody who wants their local shops to be filled and flourishing. What, all of you? Now, hands up everybody who has ever bought anything from Amazon. Yes, most of you. Or rather us, because I am at it, too.

We cannot help ourselves. The graph of online shopping is soaring upwards. For good or ill, we are contributing to the most dramatic upheaval of consumer habits since America’s Sears Roebuck invented mail order in 1893.

Much of this is down to one man — genius or monster according to taste (and probably, like most revolutionaries, something of both).

In 1994, Jeff Bezos, a 30-year-old Wall Street geek with ambitions that made Napoleon’s seem modest, read a report predicting potential web growth of 2,300 per cent, and decided that he wanted some of it.

He quit New York and drove west across the US almost until he reached the Pacific, devising a business plan for a putative internet selling start-up as he went.

He chose the name Amazon because it sounded wild and exotic — and since it figured near the top of the alphabet, it would also come close to the head of any index. He studied a list of products that lent themselves to computer order and mailbox delivery, and decided to start with books.

The business that began in Bezos’s garage in Seattle, Washington state, now occupies 14 buildings in the same city. The “everything store” can claim to be the largest on Earth, with hundreds of millions of customers, and still soaring.

Its founder and overlord is reckoned to be worth £20-billion. Even if that guesstimate is a few billions adrift, we know that last August he was able to write a cheque for £160-million from petty cash to buy the Washington Post newspaper.

Amazon now sells or acts as a clearing house for hundreds of thousands of products manufactured by a huge range of businesses, many of which hate the terrifying market dominance that Bezos is building but cannot afford to stay away from his door.

Until the 20th century, the world experienced just three radical transformations, created by the smelting of metals, the adoption of agriculture, and the Industrial Revolution.

Since the late Victorian era, however, innovation has become relentless, enriching but also bewildering: electricity, the internal combustion engine, powered flight, synthetic polymers, nuclear power and weapons, the conquest of space, lasers, computers, the internet, to name but a few.

To that list we should now add the Amazon revolution, which is changing our way of shopping — among the foremost of all human activities in consumer societies.

Many of us buy this, that and the other at corner or village stores, spending a few pounds to satisfy troubled consciences about our commitment to local business. But tens of millions of shoppers have become Amazon junkies, hitting that one-click button with the same guilty compulsion as if they were ordering another drink.

A friend said at Christmas lunch: “We do it because we can” — and she is right. No trudge in the rain, no “we don’t do your size, madam” or “we’re out of the stock”. No nervous surrender of credit card details to some unknown online vendor.

We simply hit that single button … and behold, within days or even hours, the product drops on the doorstep. It is black magic.

So thank you, thank you Jeff Bezos. Or maybe not? More than a few people out there, not all of them rivals, brand him a secretive, domination-fixated control freak. There have also been claims that warehouse staff are worked “to the bone”.

The company’s goods-return policy seems shifty: my wife raged last month when she had herself to pay the postage to send back a wrongly-delivered item.

Many industries — book publishing prominent among them — tremble before the near-monopoly Bezos is building, forcing the closure of hundreds of bookshops through ruthless discounting policies. Critics say that when Amazon gets to rule the world, or at least our shopping world, we shall be sorry.

Bezos could defend himself by saying: “This is the way it has always been with innovators. Nobody in old-world businesses ever liked new ones.”

Two centuries ago, the Industrial Revolution transformed society as steam supplanted sail and horsepower, and factory manufacture swept away cottage industries.

The men who inspired that vast upheaval are today celebrated as heroes. But in their day, those same men were cursed by almost as many people as applauded them.

In some districts, workers in old industries, seeing their livelihoods vanish, rioted and launched campaigns of “machine-breaking”, which obliged the government to turn out the Army.

Admirals complained in deadly earnest that building steamships dependent on expendable coal rather than inexhaustible wind would spell disaster for the Navy.

Revolutionaries are seldom congenial social animals, and we should thus be unsurprised that Jeff Bezos is not much like the rest of us. He was born almost 50 years ago in New Mexico. His natural father skipped the household a few months after his son’s birth, and they’ve had little contact since. Jeff was adopted by his Cuban immigrant stepfather, while spending part of his childhood on his maternal grandparents’ Texas ranch.

As an 18-year-old high school graduate in Florida, Bezos was interviewed by a local newspaper. He announced that he wanted to make a career building space hotels. So he was thinking big even then.

He kept doing so through the Ivy League’s Princeton university and a successful youthful career on Wall Street. Today, space remains a Bezos preoccupation: he spends some of his millions on promoting orbital passenger travel schemes, which he has discussed with Richard Branson.

He has kept the same wife, named MacKenzie, for 20 years, and has four children. He seldom gives interviews — not even to the Washington Post when he bought it — and runs a notoriously secretive business. Amazon never discusses future ideas: it merely explodes them into the marketplace on fine sunny mornings.

There is much bitterness among retailers about the company’s ability to escape American states’ sales taxes, and about the pitiful percentage of Amazon’s multi-billion turnover which brings significant tax money into host nations’ treasuries, including that of Britain.

Bezos is a typical new age tycoon who has tentacles everywhere but acknowledges loyalty nowhere.

Some disaffected former employees complain that he is a tyrant who declines to delegate, intervenes in everything, micro-manages as obsessively as did the late Steve Jobs, boss of Apple. But it is probably no coincidence that a Business Review poll of executives found that Bezos ranks second only to Jobs as the corporate chief executive they have most respected in recent times.

How can one not admire the man’s steel nerve? He started the business declaring that he expected no profit for years, then weathered successive downturns and recessions in which Amazon’s demise was widely predicted.

He predicted soon after his start-up that if the company did moderately well, by 2000 it would turn over £46-million. In reality it turned over more than £1-billion — but made a loss almost that big.

Bezos invests and expands relentlessly, way ahead of his profit curve. The company constantly introduces new services and products. Consider the 2007 creation of Kindle, by far the most successful electronic book reader on the market, a boon to millions, and indeed to authors like me. Bezos’s only conspicuous recent failure was a 1999 attempt to create an online sale business to compete with eBay.

In 1851, the journalist Henry Mayhew published a legendary collection of interviews with working people under the heading London Labour And The London Poor. Many of his pieces were about men pursuing dying activities.

One of my own favourites is one of those who used to drive the “night carts” through the city’s streets, collecting each house’s human waste. This old boy (who had himself become a pumpman) moaned about being displaced by the new sewer system: ‘There’s so many new dodges comes up, always someone of the working classes is a being ruined. If it ain’t steam, it’s something else knocks the bread out of their mouths quite as quick.’

Throughout history, a host of commercial activities have been displaced by innovation and technology.

There is no prospect that, in our own time, Jeff Bezos and his kind will cause shopkeepers to disappear absolutely. There will always be a demand by consumers physically to inspect many kinds of goods we want to purchase, especially clothes, and for high-end establishments.

But thousands of empty shopfronts up and down the land testify to the manner in which online selling — together with, of course, supermarkets — is changing our society.

Nothing is for ever — and that probably includes Amazon. Bezos has imitators, and will have more. Just as his company has risen from nothing to global might inside 20 years, so it will almost certainly be supplanted within a generation by a new wave of hungry, ruthless, brilliant innovators — because that is the way of the world.

For now, however, if Amazon does not quite rule the world, it has assuredly altered our retail universe, much to the advantage of shoppers. It is unnecessary to love Jeff Bezos to gasp at his genius. - Daily Mail

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