Although his reign as the world’s richest man was a title he held for only a few hours — after his stake in Amazon pushed his net worth to northwards of $90 billion USD — Jeff Bezos and his online behemoth give little indication that he won’t once again regain the throne from Bill Gates.
Bezos has been a billionaire for the last 20 years, first making the Forbes list in 1998 with a net worth of $1.6 billion after Amazon’s IPO. However, he’s really started to climb in the last two years after netting a cool $45 billion USD. Most of that figure generated from his 17 percent ownership of the company that he took from focusing solely on books to now being the “Everything Store.”
But just how exactly did he turn books turn into billions?
Bezos was born as Jeffrey Jorgensen in Albuquerque, New Mexico to a teenage mother and a father who ran out on them. She later remarried a Cuban immigrant, Miguel/Mike Bezos, who had come to the United States by himself at 15 years old through Operation Pedro Pan, an program crafted by a South Florida Catholic priest that allowed thousands of teenagers out of Castro’s regime during the early ’60s. After learning English and graduating from high school in Delaware, he put himself through courses at the University of Albuquerque and later landed a job at Exxon as a petroleum engineer. Jeff wasn’t aware that Miguel wasn’t his biological father until he was 10 years old.
As a child, Bezos worked at his maternal grandfather’s Texas ranch where he handled typical farmhand work that ranged from maintenance to animal duties. His grandfather, Preston Gise, had just retired from his Congress-appointed position with the Atomic Energy Commission, the federal agency that managed the nuclear weapons program.
Bezos would spend ample time with his grandparents, who were a part of a club of Airstream trailer owners traveling together around the U.S. and Canada.
“I loved and worshipped my grandparents and I really looked forward to [those] trips,” Bezos remembered in his commencement speech at Princeton University in 2010.
It was during one of these trips where his grandfather instilled in him a particularly sobering and useful piece of advice. Bezos had used his math skills to calculate how many years his grandmother was taking off of her life with every cigarette that she puffed.
“While my grandmother sat crying, my grandfather, who had been driving in silence, pulled over onto the shoulder of the highway,” Bezos said. “He got out of the car and came around and opened my door and waited for me to follow. Was I in trouble? My grandfather was a highly intelligent, quiet man. He had never said a harsh word to me, and maybe this was to be the first time? Or maybe he would ask that I get back in the car and apologize to my grandmother. I had no experience in this realm with my grandparents and no way to gauge what the consequences might be. We stopped beside the trailer. My grandfather looked at me, and after a bit of silence, he gently and calmly said, ‘Jeff, one day you’ll understand that it’s harder to be kind than clever.'”
With both his stepfather and maternal grandfather entrenched in scientific fields, it seemed only natural that he follow in their footsteps when it came time to pick an area of study after becoming Valedictorian at Miami Palmetto High School and later enrolling at Princeton.
But in the interim, he relied on a steady paycheck from McDonald’s as a fry cook while he decided on a major in college.
Bezos ultimately honed in on computer sciences and excelled in the field. By the time graduation rolled around, he had offers from Anderson Consulting, Intel and Bell Labs but opted for a startup, Fitel, which had been conceived by two Columbia professors and aimed to expedite equity transactions by improving the telecommunications field.
As a technical wizard, he quickly rose up the ranks and became the head of development and director of customer service, a job which had him crisscrossing all over the world. However, things with Fitel and an ill-fated tenure with Bankers Trust left him pondering his place in the world.
Bezos knew he wanted to pursue computer technology and found kinship with David Shaw, a computer specialist who had a two-and-a-half-year-old hedge fund. Bezos said he was “one of those people who has a completely developed left brain and a completely developed right brain. He’s artistic, articulate, and analytical. It’s just a pleasure to talk to someone like that.”
In 1994, Shaw encouraged Bezos to develop new strategies and opportunities using the web. He landed on the notion of using the digital footprint of the two largest book manufacturers (Ingram and Baker & Taylor) — who were some of the first to utilize digitized inventory lists — in order to build a better version of a bookstore.
Up until that point, if a person went into a bookstore and a particular book wasn’t in stock (with 3 million in print at the time), they had to make a request to Ingram or Baker & Taylor to find a storage facility that had the title in question.
What Bezos was encouraged to do was cut out the middlemen and provide titles direct-to-consumer. He approached Shaw with empirical data which pointed to the fact that Internet usage had grown 2,300 percent between 1993 and 1994. Shaw saw the value in his two-hour pitch/conversation, but tried to convince Bezos that what he currently had should be enough to satiate his entrepreneurial spirit.
He and his wife created a “regret-minimization framework” to weigh the pros and cons of going out on his own and attempting to cultivate an avenue that had yet to be forged.
“I knew when I was eighty that I would never, for example, think about why I walked away from my 1994 Wall St. bonus right in the middle of the year at the worst possible time,” Bezos said in The Everything Store. “That kind of thing just isn’t something you worry about when you are eighty years old. At the same time, I knew that I might sincerely regret not having participated in this thing called the Internet that I thought was going to be a revolutionizing event. When I thought about it that way… it was particularly easy to make the decision.”
With his mind now made up, Bezos began brainstorming potential names of his new business. Early favorites included Cadabra Inc and MakeitSo.com (based off Captain Picard’s famous refrain from Star Trek).
Then there was the issue of where to establish a headquarters. Since taxes were highest in states most densely populated (New York and California) — for what then would be considered simply a “mail-order” business — Bezos and his wife, Mackenzie, opted for Seattle, Washington.
A year later, Bezos had built a rudimentary version of his vision under the banner Amazon.com with help of programmer, Shel Kaphan (who was employee number one), and a contractor, Paul Barton-Davis, inside a rented Bellevue, Washington garage which served as their official work space.
The site went live in July 1995 — aided by a million dollar investment from various angel investors who believed that Bezos and co. could weather the storm once mega-retailers like Barnes & Noble realized that a new entity had entered the fray.
That same year, Barnes & Noble had done $2 billion USD in revenue and made $88.6 million USD in profit.
The Amazon team knew there would only be true competition if they started making money. By the end of September, they were clocking $20,000 USD a week.
Many analysts applauded Bezos for having the foresight to control his own warehouses, which allowed for greater quality control and also allowed him to maximize shipping efficiency into single packages after they graduated from selling books to other creature comforts (like CDs) in the mid-1990s.
By 1998, Amazon made $250 million USD in the fourth quarter of the fiscal year and that put them on pace to make $1 billion.
Clearly Bezos’s business model was working. However, he was already toying with creating both an infrastructure and an understanding of how consumers would want to shop a decade later — noting that the vast bulk of store-bought goods would be purchased electronically.
Today, Amazon accounts for 43 percent of all online purchases in the United States and took in $136 billion USD in sales last year.
Ted Jorgensen, Bezos’s biological father, would later learn who his son had become when Brad Stone published his 2013 profile on the Amazon founder, The Everything Store.
Stone recalled the scene, telling him, “‘Your son is one of the most successful men on the planet.’ I showed him some Internet photographs on my smartphone, and for the first time in 45 years, Jorgensen saw his biological son. His eyes filled with sorrow and disbelief.”
“I didn’t know where he was, if he had a good job or not, or if he was alive or dead,” Jorgensen stated in the book, adding, “I wasn’t a good father or a good husband.”
While many of the world’s richest like Bill Gates, Warren Buffet and Mark Zuckerberg have all signed “The Giving Pledge,” which promises to give away a majority of their wealth for humanitarian purposes, Jeff Bezos is an exception to the rule as the only top-five wealthiest American billionaires yet to sign.
According to public data and news reports, he and his family have bestowed around $100 million USD in total on charities — or 1/10 of 1 percent of his fortune.
But perhaps that’s all changing as he comes to grips with temporarily being the richest man in the world.
According to The New York Times, “[Bill] Gates was accused of not being charitable enough before he became the richest man in 1995, with a fortune of $12.9 billion USD. By the end of the 1990s, he had given away more than $2 billion through foundations he created that focused on health and technology.”
In June of this year — perhaps sensing that his equity in Amazon would push him ahead of Gates, he tweeted asking for ideas regarding philanthropic endeavors. While some interpreted it as an empty gesture, others think Bezos is set to disrupt how charitable efforts work in the same way Amazon changed the way we shop.
“We know that he hasn’t been very receptive to traditional philanthropy,” said Steve Delfin, a Washington-area philanthropy adviser to companies and wealthy families. “My guess is that at some point, he will create an innovative new model or a hybrid approach. And maybe, like Amazon, he’ll do it better.”
Next up, this photographer captures the raw, hedonistic nightlife of European youth culture (NSFW).
- Main & Featured Image: Hashmeet