Jeff Bezos is the current wealthiest person alive. As of this writing, his net worth sits at more than $151.3 billion. So today, Ignitia takes a closer look at how he built his fortune.
Jeff Bezos was born on January 12, 1964 in Albuquerque, New Mexico. His mother was a seventeen-year-old high school student, and his father was a bike shop owner. When Bezos was four years old his mother married a Cuban immigrant named, Miguel Bezos. The three moved to Houston, Texas where Jeff was officially adopted by his new father. Years later, the family moved to Miami, Florida where Jeff would attend high school.
A Glimmer of Brilliance
In high school, Jeff worked at McDonald’s. He graduated as his high school’s valedictorian, and was a National Merit Scholar. After high school Jeff attended Princeton University. While there, Bezos was admitted into the nation’s oldest academic honor society, Phi Betta Kappa and was also admitted to the nation’s oldest engineering honors society, Tau Beta Pi. While at Princeton, Jeff also became president of the university’s Students for the Exploration and Development of Space chapter. Bezos graduated with a GPA of 4.2, and double majored in electrical engineering and computer science.
Entering the Work Force
After graduation, although he was offered positions at Intel, Bell Labs, and Andersen Consulting, Bezos decided to accept a position at a small financial telecom startup called, Fintel. There he was tasked with building the company’s international trading computer infrastructure. From there, he took several other jobs in the banking and IT sectors before landing a job at the hedge fund D.E. Shaw and Co. where he served as a senior vice president.
A Risk Worth Taking
In 1993 on a cross country trip from Seattle to New York City, Bezos developed the idea for Amazon. Bezos believed the rapidly expanding internet would one day make bookstores like Borders and Barnes and Nobles obsolete. While the initial idea for the company was to sell books, even from the beginning Bezos intended to sell other items as well. With all this in mind, Bezos was still unsure whether or not he should take the risk of leaving his good job to pursue his own idea. So to make the decision he applied what he called his ‘Regret Minimization Framework’. In doing so, he asked himself one simple question: ‘In X years, will I regret not doing this?’ What Jeff decided was that he would regret attempting to start this company. So, with a reported $300,000 loan from his parents and several other investors, Bezos left D.E. Shaw and started Amazon out of his garage.
The Birth of an Empire
At the time, Bezos told investors there was a 70% chance the company would fail. But he remained undeterred. Bezos settled on the name Amazon because it was ‘exotic and different’ two traits he hoped the site would embrace. He also chose the name because it started with the letter ‘A’ which Bezos believed meant it would often appear higher up in alphabetical searches. Initially, Bezos decided to sell books because they had a low price point, there was an international market for literature, and a huge inventory already existed on hand. So on July 5, 1994 the company launched. It was an immediate success. Within two months of launching, Amazon sales generated more than $20,000 per week. Two years later in 1996, the company grew in revenue from $511,000 to $15.75 million. Then the next year, on May 15, 1997 the company offered an IPO at $18 a share. The IPO raised $54 million and gave the company a $438 million market value. The stock closed that first day at $23.50.
‘Get Big Fast’
Bezos had a philosophy that in order to keep up in the internet age, a company needed to ‘Get Big Fast’. He even had t-shirts made with this slogan printed on them. In 1996 the company had 180,000 customers. By 1997 that number had grown to one million. In 1997, company revenue was $148 million, and in 1998 it had reached $610 million. The next year in 1999, in recognition for his foresight in the growth potential of e-commerce, Time magazine named Jeff Bezos their ‘Person of the Year’. Finally, in the forth quarter of 2001, the company turned a profit, earning $5 million ($0.01 per share) on $1 billion of revenue.
Beyond Just Books
In 2002, Amazon launched its Amazon Web Services (AWS). This service initially offered internet analytics for web developers, but by 2006 would expand into the cloud computing space which allowed users to rent out both processing power and data storage space over the internet. This move popularized the notion that individuals no longer needed to own large, expensive hardware units and could instead rent as much of Amazon’s high powered processor speeds and storage capacities as needed.
Expanding Even Further
Since its launch, Amazon has disrupted numerous industries. From publishing to retail, delivery to print, and even news, movies, music, and food Amazon has proven successful in almost any venture it undertakes. In his aim of becoming an ‘everything store’, Jeff Bezos has grown Amazon to become not only the largest internet retailer in the world in terms of revenue and market cap, but has also become the second largest in the world in total sales behind only, Alibaba. In 2015, Amazon surpassed Wal-Mart as the most valuable retailer in the United States by market cap and is currently the forth most valuable public company in the world behind only Apple, Google, and Microsoft. Amazon has also grown to become the second largest employer in the United States behind Wal-Mart.
As of this writing, the stock value has risen over 1,000-fold from the $18 IPO price, and is currently trading at over $1,863 per share, giving the company a market cap of over $890 billion. Jeff Bezos currently serves as the company’s president, chairman, and CEO, and today owns a personal net worth of more than $143.1 billion making him the wealthiest person alive.