Amazon.com

Amazon Startup Story

Introduction

This startup story features Jeffrey P. Bezos, the innovative founder of Amazon. The company, which now generates over $62 Billion in Revenue and holds the title as the world’s largest  online retailer, was started out of Bezos’s garage at 30 years old.

Amazon Stats:

  • Industry: Online Retailing
  • Annual Revenue: $61.09 Billion
  • # of Employees: 97,000
  • Famous For: Being the world’s largest online retailer

How Amazon Started

The year was 94 and Bezos was working diligently on Wall Street. At 30 years old, he began to see the internet revolution take place, and made the decision to quit his job and start an internet company.
“The wake up call was finding this startling statistic that web usage in the spring of 1994 was growing at 2,300 percent a year. You know, things just don’t grow that fast. It’s highly unusual, and that started me about thinking, “What kind of business plan might make sense in the context of that growth?” 
After making a list of the ‘top 20’ products that he could potentially sell on the internet, he decided on books because of their low cost and universal demand. It turns out, it was just the beginning…..

The Founder’s Start


As a child, he spent summers at his grandfather’s ranch in southern Texas, “laying pipe, vaccinating cattle and fixing windmills”. The 18-year-old Bezos “said he wanted to build space hotels, amusement parks and colonies for 2 million or 3 million people who would be in orbit. ‘The whole idea is to preserve the earth’ he told the newspaper …. The goal was to be able to evacuate humans. The planet would become a park”. 

Amazon’s Funding

The initial startup capital came from his parent’s personal savings.
From an interview with Jeff Bezos, for the Academy of Achievement:
“The first initial start-up capital for Amazon.com came primarily from my parents, and they invested a large fraction of their life savings in what became Amazon.com. And you know, that was a very bold and trusting thing for them to do because they didn’t know. My dad’s first question was, “What’s the Internet?” Okay. So he wasn’t making a bet on this company or this concept. He was making a bet on his son, as was my mother. So, I told them that I thought there was a 70 percent chance that they would lose their whole investment, which was a few hundred thousand dollars, and they did it anyway.”

Follow on Funding

Amazon raised a series A of $8M from Kleiner Perkins Caufield & Byers in 1995. In 1997, Amazon went public to raise additional capital. By 1999, the value of the Kleiner Perkins Caufield & Byers investment in Amazon created returns of over 55,000%.

Years to profitability

Within two months, Amazon’s sales were up to $20,000/week. However, the company has continued to plow their revenue back into growth. The chart below depicts Amazon’s continued focus on long-term growth, with profit remaining near $0 or below, and revenue.rising