2013 SUCCESS Achiever of the Year: Jeff Bezos

It was 11:52 p.m. on Dec. 22—the final frantic stretch of the 2012 holiday shopping season—when the one-day shipping order rolled into the company’s West Coast servers. Somebody somewhere wanted a pair of Roxy Hot Cocoa slippers delivered to Fayetteville, Ga.

Amazon’s fulfillment centers were operating at breakneck speed. On Nov. 26, the Monday after Thanksgiving, the company had logged its busiest day ever, fielding orders for a record-breaking 306 items per second. The delivery list—26.5 million shipments in all—included TVs, cameras, Razor scooters, electric shavers, kayaks, hand blenders, wine chillers, watches, jeans, jewelry, power tools and coffee. More than a few items were destined for out-of-the-way addresses. In 2010 a package of books, DVDs and video games made its way to the tiny Canadian hamlet of Grise Fiord—north of the Arctic Circle.

In the early days, the company routinely dispatched employees from its Seattle headquarters to help its regional distribution centers meet holiday demand. But in the winter of 2012, it had 50,000 seasonal workers at the ready to assist the 20,000 full-time hands. So the Roxy slippers were promptly pulled from a shelf, placed in a cardboard carton and shipped off into the night. They arrived in Georgia in time for gift-wrapping on Christmas Eve.

This is the world Jeff Bezos has created for us—a land where last-minute gifts can be purchased from the comfort of your easy chair. Where best-selling books appear in your hands while you sit on the beach. Where unlimited shipments appear at your door one after another for the unbelievable Amazon Prime fee of just $79 per year.

Launched as an online bookseller on July 16, 1995, Amazon now sells more than 20 million products. Its online marketplace stays open 24/7/365. And the founder will not rest, it seems, until he can provide same-day delivery to every address on the planet at a cost anyone can afford, even if it means assembling a fleet of rotor-propelled drones to do the job.

As with TV and cellphones, it’s hard to remember what life was like in the days before such creature comforts entered our lives. From the moment in 1994 when he discovered the awesome power of the Internet, Bezos has been bending it to the will of his customers. He demands endless selection, bargain prices, instant delivery—all the things that make life better for the consumer. “Our No. 1 mission,” he says, “is to be Earth’s most customer-centric company.”

On the surface, that means pleasing people. But Bezos—the SUCCESS 2013 Achiever of the Year—likes to do more than that. He wants to delight them, too. For years, that was Steve Jobs’ role. And let’s face it, Bezos does not present as well as Jobs. The manic energy, the dorky laugh and the blue oxford dress shirts seriously detract from his aura. But the Amazon CEO has been thrilling us in subtle ways for a long time. One-click shopping, painless returns, books that appear on your Kindle with the push of a button—these are things we take for granted, but we have them at our disposal because of Bezos’s zealous attention to Amazon’s chief goal. “They’re not magical creations,” says Brad Stone, who chronicled the founder’s breathtaking rise in The Everything Store. “But they’re deeply pragmatic services that save people time and money.”

To keep staffers on their toes, Bezos leaves a seat open for the customer at the conference table during meetings. He insists that managers, including himself, complete two days of customer service training every year. And he fields consumer complaints via his public email—jeff@amazon.com—making life extremely difficult for any manager caught on the wrong end of the exchange. “I like to say that Amazon is a company that hides its profits in expansion,” Stone says. “But it also hides its profits in customer service. It pays to cultivate loyalty.”

So it’s no surprise that Amazon replaced Apple in the last year as the world’s most trusted brand. Or that the company’s annual revenue reached $61 billion in 2012 and was projected to hit $75 billion in 2013. Or that Bezos has been anointed, by Harvard Business Review, among others, the shrewdest CEO alive, the man who sees where the world is going two steps ahead of the rest of us.

Back when the Internet was young, when Americans were still wary about using their credit cards to shop online, Amazon’s “heads-down focus” on the consumer may simply have been a survival tactic. But it is now, Bezos argues, the most powerful weapon in his arsenal. It allows him to look beyond his rivals to the world of the future. “If you’re competitor-focused,” he says, “you have to wait until there is a competitor doing something. Being customer-focused allows you to be more  pioneering.”

 

On one hand, he is the classic geek—big Star Trek fan, Apple II-era whiz kid, nerd who quoted Ray Bradbury and dreamed of colonizing the universe in high school—but Jeff Bezos has a rugged side, too. He played youth football and spent childhood summers toiling on a sweltering 25,000-acre Texas ranch owned by his maternal grandfather. The experience taught him the importance of hard work, self-reliance and resourcefulness—not to mention the steely resolve needed to castrate steers.

Born in Albuquerque, N.M., to teenage parents who were divorced 17 months later, Bezos has no memory of his biological father. His mother, Jackie, married a Cuban immigrant named Miguel Bezos when Jeff was 4. The elder Bezos had arrived in America in 1962 with no money in his pocket, but he was more of a striver than Jackie’s first husband—a unicycle-riding circus performer named Ted Jorgensen. “Mike” chose to pursue a career in petroleum engineering and he eventually worked his way up to the executive ranks at Exxon. After adopting Jeff, he raised him as if he were his own son. In time, the Bezos family grew to include a daughter, Christina, and a second son, Mark. The close-knit clan moved frequently, following Mike to jobs in Houston, Miami and Pensacola, Fla.

In 1982 Jeff graduated from Miami’s Palmetto High School and enrolled in Princeton with the goal of mastering physics, but he quickly concluded he didn’t have the intellect to keep pace with the classroom stars, so he shifted to electrical engineering and computer science. With degree in hand, he went to work for a tech startup in New York City and then moved to Bankers Trust, where he developed software and became the company’s youngest vice president, at 26. It wasn’t until he landed at the hedge fund D.E. Shaw, run by the computer science expert David Shaw, that he found the right fit, rising to the title of senior vice president.

In the spring of 1994, while reading a newsletter called the “Matrix News,” Bezos was amazed to discover that the volume of data transmitted over the fledgling World Wide Web had increased by a factor of 2,300 in one year. “Nothing usually grows that fast outside a petri dish,” he later told SUCCESS. Within three months Bezos had quit his job and set out for the West Coast to launch his own company. His wife, MacKenzie, did the driving while Jeff typed away on the first draft of Amazon’s business plan. He had drawn up a list of 20 potential products to sell online, ultimately settling on books, because they were well-catalogued, easy to package and offered boundless selection, which played to the strengths of e-commerce.

Seattle had a large pool of tech talent. It offered tax advantages. And it was relatively close to Ingram Book Group’s Oregon distribution facilities. So Bezos directed his wife and the men in the couple’s moving van to head for Washington. He rented a two-bedroom house with a garage in the suburb of Bellevue and set up shop, interviewing prospective employees in the café of the nearby Barnes & Noble.

Almost immediately after Amazon.com launched, it made Yahoo’s What’s Cool list. Within a month it had received orders from all 50 states and 45 countries. By year’s end the company had logged $500,000 in sales. In 1996 that figure climbed to $15.7 million. In 1997 it zoomed to $147.8 million. Amazon wasn’t the first site to sell books, but Bezos was by far the most determined to succeed among the e-commerce pioneers. In the decade that followed, he raised more than $2 billion in capital and poured it right back into the business.

He spent sizable sums to build cutting-edge distribution centers, expand the website’s services and purchase innovative tech companies, all the while keeping his employees on a bare-bones budget. In time he distinguished himself as an unorthodox thinker. He criticized Jobs for pricing Apple products too high. High profits invite competition, he argued. He ventured into the glitzy tablet market with the no-frills Kindle. The goal was to make money when people used the device, he said, not when they bought it. He opened the website to third-party retailers, even though they competed with him on prices, because they expanded the overall selection. And after spending lavishly to upgrade the company’s network capabilities, he invited outside developers—including those at rival companies—to use them. Amazon Web Services now hosts The New York Times, Netflix, NASA and the CIA. It may one day be the biggest profit center in Bezos’s  empire.

In his obsessive pursuit of customer satisfaction, however, Bezos has been known to rough up his staff. Instead of showering employees with perks like Google’s Sergey Brin and Larry Page, he charges them for parking. He can be caustic, overbearing and supremely demanding. “He just makes ordinary control freaks look like stoned hippies,” one former engineer famously lamented. In some reports, the treatment is borderline sadistic. When the harried laborers in Amazon’s un-air-conditioned Allentown, Pa., distribution center started buckling in 2011 during a May heat wave, the company simply arranged to have ambulances stationed in the parking lot. (In 2012 Amazon air-conditioned the center.)

And yet the man inspires intense loyalty. When Brad Stone raised these employee relations concerns in his book, Rick Dalzell, who served for a decade as Amazon’s chief information officer, rode to the boss’s defense, taking the author to task in an unfavorable review on, yes, Amazon. “He completely missed [Bezos’s] warmth, his humor and his empathy,” Dalzell wrote, “all qualities abundantly present in the man.”

 

The trail begins 150 miles east of El Paso and rises some 2,000 feet above the desert floor. At the end, amid the peaks of the Sierra Diablo Mountains, waits a stainless steel door with panels made of green nephritic jade. Behind the door is a tunnel that leads deep inside the earth to a vertical shaft—hundreds of feet high—which will one day house Jeff Bezos’s most ambitious creation: a wondrous clock designed to mark the passage of time for the next 10,000 years.

A spiral staircase carved into the rock loops visitors past the massive metal gears and ingenious power train. On the clock face, in an upper chamber, the century hand—as its name indicates—will advance once every 100 years.

Built with $42 million from Bezos’s personal fortune, the monumental timepiece is a tribute to the CEO’s faith in long-term thinking, a belief he shared with investors in his first shareholder letter back in 1997. “Because of our emphasis on the long term,” he wrote, “we may make decisions and weigh trade-offs differently than some companies.”

What does that mean? Well, as Bezos has demonstrated time and again, his strategic goals for the company often take precedence over Wall Street’s concerns about making money. In fact, Amazon routinely reports quarterly losses. This conflict in interests has brought Bezos all sorts of grief, including a litany of complaints from investment analysts, who branded the company “Amazon.toast,” “Amazon.con,” and “Amazon.bomb.” Amidst the steady losses in 1999, the company’s board of directors pressed the CEO—then 35—to hire a chief operating officer. “If they could have asked him to leave, they probably would have,” says Stone. When the dot-com bubble burst in 2000, the company lost $3 billion in stock value in one day.

Once chummy with the press, the stubborn Bezos has retreated from the spotlight. He refused to be interviewed for this article, which came as no surprise, given that he had just turned down a request from The Washington Post—right after he had purchased the newspaper. (He shared his thoughts in a letter to the staff and later granted an interview with the Post.)

Bezos will occasionally sit face to face with late-night talk show host Jimmy Fallon or 60 Minutes correspondent Charlie Rose, but he rarely deigns to debate his decisions with the press. If he sits down with a reporter, it’s on his terms, usually related to the release of a new feature on the Kindle. The tablet’s sales figures, of course, remain a carefully guarded secret.

Bezos protects his private life with the same vigor. He lives on the eastern shore of Lake Washington, in a $28 million mansion on a bluff shielded from public view by trees. He has four children—three boys and one girl—all younger than 13. People will be hard-pressed to find their names in print or online. Bezos has talked about his relationship with MacKenzie, his wife of 20 years, but only sparingly. The two met at D.E. Shaw, where she worked as a research associate in the office next to his. “I think my wife is resourceful, smart, brainy and hot,” Jeff told Vogue last year, “but I had the good fortune of having seen her résumé before I met her, so I knew exactly what her SATs were.” A fellow Princeton grad, MacKenzie studied fiction writing under the tutelage of Nobel Prize winner Toni Morrison. She has written two novels, and the first won an American Book Award.

Her husband remains passionately interested in space travel. He recently paid to have remnants of rocket engines from the Apollo 11 mission recovered from the depths of the Atlantic Ocean. In 2000 he quietly launched a company named Blue Origin to build commercial craft to “facilitate an enduring human presence in space.” The firm’s test facilities are sealed away on the 290,000 acres of ranchland Bezos stealthily assembled outside sleepy Van Horn, Texas (population: about 2,000).

To a remarkable degree, Amazon’s CEO has held fast to the principles he outlined in that 1997 shareholder letter. That’s why he makes a point of recirculating it every year. If you remain patient, he argues, the interests of customers and shareholders eventually align. Not all of his investments have paid off. But he refuses to let the naysayers hold him back. In November he announced that the U.S. Postal Service would be making Sunday deliveries for Amazon. In December he floated the idea of using drones to cut the company’s delivery times to a half-hour. If his love for such bold ideas is unappreciated, so be it.

“He was a punching bag from 2001, when the stock hit single digits, all the way to 2010, when Amazon made it through the recession, and it was suddenly growing faster than all of e-commerce,” Stone says. “For 10 years, people discounted and underestimated Bezos.”

Now, it seems, he is routinely hailed as the next Steve Jobs. Of all the numbers Jeff Bezos has generated, the one worth noting is this: During his tenure, Amazon’s shareholders have received returns equal to nearly 125 times their original investments.

It’s hard to argue with that.

“We reserve our highest admiration for business executives who have been proven right over and over,” Stone says. “And that’s really the main thing you have to say about Bezos. He has the power of his convictions, and his convictions have been proven right again and again.”

And that’s not likely to change very soon. The CEO turned 50 in January, which means he’s still got plenty of time for long-term thinking.

Find out 4 ways to impress Jeff Bezos. Hint: Pay attention to his humble (and successful!) philosophy on business.

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