Photo: Nigel Parry, Wired When he started out selling books online, Jeff Bezos focused on building a profitable business in a low-margin world from scratch. Facebook and Google are all very valuable businesses making a lot of money, but given their penetration in relative numbers, they aren't exactly making a lot of money from their [...]
Photo: Nigel Parry, Wired
1. Low-Margin Wizard
When he started out selling books online, Jeff Bezos focused on building a profitable business in a low-margin world from scratch. Facebook and Google are all very valuable businesses making a lot of money, but given their penetration in relative numbers, they aren’t exactly making a lot of money from their vast user bases.
Let me get back to being effective in a low-margin world; in the foreseeable future, e-commerce will be all about long-tail and making sure many small margins fall on your side of the track. We all sing the praise of Apple and Steve Jobs, but the paradox here is that over 90% of Apple’s revenue comes from their hardware.
I love Apple for many reasons, but it’s a dying technology. All proprietary systems, like empires, will fall. Instead, Jeff Bezos and Amazon.com are focusing on content and all hardware solutions, like the Kindle Fire for example, are simply made solely for easy access to content at a competitive prize point. And content, whether virtual or analogue, will never go out of style.
4. Building Slow From The Ground Up
When it comes to hardware, Amazon.com is mainly focusing on buying server infrastructure, capacity and storage, much like Google. But where Google only has their advertising strategy (advertising, really?) to fall back on, Jeff Bezos is slowly building an e-commerce infrastructure where money is actually shifting hands.
5. Building A Long-Term Business Model
App Store (iOS) is genius, but it’s not long-term. When Amazon.com has single-sale successes, they make money from literature, how-to knowledge, inspiration and tech gadgets. When App Store has success, we see novelties like Angry Birds taking over the world. That’s fine, but it’s not built to last.
6. His Future Is Ahead Of Him
Alongside titans like Bill Gates, Sergey Brin, Larry Page, Mark Zuckerberg and Steve Jobs, Jeff Bezos is much more anonymous. But, Bezos is as nerdy as Gates, as big-picture visionary as Brin, as intelligent as Page, as machiavellian as Zuckerberg and as focused on details as Jobs. And while we probably have seen the height of their accomplishments from the rest of them, Bezos probably has his biggest impacts in front him as long as he’s ready to not going for the proprietary strategy long-term.
7. Stands Strong
Google is struggling to get social without destroying their flagship, the search engine. Facebook’s IPO gave me serious chills and now they offer the general public to override their EdgeRank by paying for fake penetration onto other users’ walls. Apple killed all support for the original iPad and don’t present any next generations for either MacBook Pro or iMac. Google, with all of their data and all of their money, they can’t come up with anything better than Google+ and several iterations later, it’s no better than the first version. And Microsoft is lurking in the shadows, probably hoping for Android OS to help them piggyback into the spotlight again. Amazon.com? As e-commerce becomes more and more important and governments starts to realize that free shipping will grow their economies, they will be in pole position.
8. Managed To Stay Close To The Top For A Long Time
Jeff Bezos survived the IT crash and it didn’t stop him.
9. Makes Social Work For Him
Amazon.com is today the e-commerce platform that best understands social; it leverages user behavior data to predict what you want to purchase. Powerful user reviews ranked by the users themselves. Creative user-generated shopping lists. Driving much of the ebook revolution. In the future, my bet is that you’d rather have Amazon hosting your multimedia content because they can make their low-margins work without forcing you into scary terms and conditions.
10. A Nice Guy
Jeff Bezos actually seems to be a nice guy and a cool person to work for. While some of the more notorious titans of the industry are known to be eccentrics, asocials or just plain assholes, Bezos seems to be able to combine long-term business sense with grand visions and a positive outlook on future innovations.
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