[Music]
Oh Jeff thank you very much for coming
thank you David it's great to be here so
let's start by asking you this we
announced that you were coming here in
May since that time your stock is up by
about 250 billion dollars do you
attribute some of that increase to the
knowledge that people think if you're so
smart as to come here you must be really
good at running your company it's
clearly completely causal I mean there's
that's I would recommend that to any CEO
now your stock is actually up 70 percent
this year is there one thing that you
think is responsible for that of several
things because 70 percent is pretty good
now I am it's a you know I I have been
lecturing they have All Hands meetings
at Amazon and for 20 years ever since
we've been about 21 years now in 1997
every at almost every All Hands meeting
I said look when the stock is up 30% in
a month don't feel 30% smarter because
when the stock is down 30% in a month
it's not going to feel so good to be
feel 30% dumber and that's what happens
you know the great quote that Warren
Buffett brings up all the time but
Benjamin Graham said which is you know
in the in the in the short run the stock
market is a voting machine in the long
run it's a weighing machine and what you
need to do is operate your company in
such a way knowing that it will be waved
one day and just let it be weighed and
never spend any time thinking about the
daily stock price I don't okay so as a
result of going up seventy percent this
year you have become the wealthiest man
in the world
it is that a title that you really want
it or not I is it I can assure you I
have never sought that title and it was
fine being the second wealthiest person
in the world that actually worked fine
it's not it isn't a
it I I would say it's something people
naturally are curious about you know
it's a kind of an interesting curiosity
but it's not the thing I would much
rather if they said like you know
inventor Jeff Bezos or entrepreneur Jeff
Bezos
or you know father Jeff Bezos those
kinds of things are much more meaningful
to me and the you know the it's an
output measure that if you look at the
financial success of Amazon and the the
stock I own 16 percent of Amazon and
Amazon is worth roughly a trillion
dollars that means that what we have
built over 20 years we have built eight
hundred and forty billion dollars of
wealth for other people and that's
really what we've that's what from a
financial point of view that's what
we've done we've built eight hundred and
forty billion dollars of wealth for
other people and that's great that's how
it should be you know there I believe so
powerfully in the ability of
entrepreneurial capitalism and free
markets to solve so many of the world's
problems all of them but so many of them
so you live in Washington State and
they're in Seattle we're outside of
Seattle now the man who was the richest
man for about twenty years his name Bill
Gates yeah and what is the likelihood
that the two richest men in the world
live not only in the same country not
only the same state not only the same
city but in the same neighborhood I mean
is there something in that neighborhood
that we should know about and are there
any are there any more houses for sale
there act right
after I saw bill not not too long ago I
you know we were joking about the
world's richest man thing and I
basically said thank you no I said
you're welcome and he immediately turned
to me and said thank you but no Medina
is a great little it's a suburb of
Seattle and you know I don't think
there's anything special in the water
there and you know I did locate Amazon
in Seattle because of Microsoft I
thought that that big pool of technical
talent would provide a good place to
recruit talented people from and that
did turn out to be true so it's not a
complete coincidence there is some
correlation there but when you are the
richest man in the world you go into a
store when you want to buy something do
you have to put a credit card down you
just say I'm Jeff Bezos and they send
you this the how do you about that and
you have to care you carry cash around
you you can yeah I do carry cash and I
have I have credit cards yeah and if
your credit I have to show my driver's
license and you know but have you ever
had a credit card I'd know that I I have
I've had my credit card denied so what
do you say when they you say don't you
know if I give them another credit card
I'd say here try this one
so earlier today you made an
announcement that is the most
significant philanthropic gift you've
made in the pipe it was a about about a
year ago you said you were wanted to
look for some good philanthropic ideas
and you got I think 47,000 of them and
you reviewed them and how did you decide
where to put this two billion dollars
and would you describe exactly what
you're gonna well that process was very
helpful so I I solicited ideas a kind of
crowd-sourced and I got literally as you
said something like 47,000 maybe even a
little more some of them came to my
inbox most of them came on social media
and I read through thousands and
thousands of them my office kind of
correlated them all and put them into
buckets and there were some themes that
emerged but the other thing that's
fascinating about the kind of exercises
you see just how long tailed it is
people are interested in trying to help
the world in so many different ways and
you it's all the things you would expect
you know it's but but but also some more
unusual things but it's you know some
people are greatest in the arts and
opera and they think that's underfunded
and a lot of people are interested in
medicine and particular diseases and
think that those deserve more R&D
dollars all these things are correct a
lot of people are very interested in
homelessness including me a lot of
people are very interested in education
and of all kinds all kinds of
interesting to both kind of college
scholarship type education but also
apprenticeship program so you name it
and people are interested in education
I'm very interested in early education
and I made them you know the apple
doesn't fall far from the tree my mother
has become in running the Bezos Family
Foundation she has become an expert in
in early education I'm a student of
Montessori schools
I started at Montessori when I was 2
years old
and the teacher complained to my mother
the Montessori School teacher complain
to my mother that I was too task-focused
and that she couldn't get me to switch
tasks so she would have to just pick up
my chair and move me and by the way I
think that's if you ask the people who
work with me that's still probably true
teacher ever call you since and say that
she was responsible for your success no
I'm in touch with several of my high
school elementary school teachers though
but I don't know any of my Montessori
School teachers ok so the gift that
you're giving essentially that you're
gonna have some for preschool for
children who need preschool for treet
we're yeah well full tuition preschool
Montessori inspired I'm very excited
about that
because I'm gonna operate that that's
gonna be an operating nonprofit I'm
gonna hire an executive team there's
gonna be a leadership team we're gonna
operate these schools and we're gonna
put them in low-income neighborhoods
it's just there's no doubt we know for a
fact that if a kid falls behind it's
really really hard to catch up and if
you can give somebody a leg up when
there are two three or four years old by
the time they get to kindergarten or
first grade they're much less likely to
fall behind
you can still happen but you've really
improved their odds and a lot of in you
know and you know most probably most
people in this room have been very
mindful about making sure that their
kids got very good preschool education
and you know got that kind of headstart
that Head Start compounds fantastically
if you can get that you know starting at
age 2 3 4 that's there's a powerful
compounding effect there so it's highly
levered that's all that really means you
know that you can the money spent there
is going to pay gigantic dividends for
decades so and the other part of your
gift will be to give awards out to yes
and that's going to be more traditional
grant-making philanthropy so there I'm
gonna identify with the help of a team
I'm gonna identify that we're gonna hire
full-time team identify and fund that
and fund family homeless shelters and
that will be you said you would give an
initial two billion dollars I expect to
add to that
yeah it's day one everything I've ever
done has started small Amazon started
with a couple of people and Blue Origin
started with five people and the budget
at Blue Origin was very very small now
the budgeted origin has approaches a
billion dollars a year a next year will
be more than a billion dollars so in
Amazon who literally was ten people
today it's half a million people but you
you it's hard to remember for you guys
but for me it's like yesterday I was
driving the packages to the post office
myself and hoping one day we could
afford a forklift and so but so for me
I've seen small things get big and it's
part of this day one mentality
I like treating things as if if they're
small you know Amazon even though it is
a large company I wanted to have the
heart and spirit of a small one and then
so anyway that the day one foundation is
going to be like that will will will
will wander a little bit too so I we
have some very specific ideas of what we
want to do but I believe in the power of
wandering all of my best decisions in
business and in life have been made with
heart intuition guts you know not not an
analysis when you can make a decision
with analysis you should do so but it
turns out in life that your most
important decisions are always made with
instinct intuition taste heart and
that's what we'll do with this day one
foundation - it's part of that day one
mentality as we go about you know
building out this network of
of nonprofit schools we will will learn
new things and we'll figure out how to
make it better so one of the decisions
that you are doing by the customer is
going to be the child this is this is so
important because that is it the secret
sauce of Amazon where there several
principles at Amazon but the number one
thing that has made us successful by far
is obsessive-compulsive focus on the
customer as opposed to obsession over
the competitor and I talked so often to
other CEOs and some other CEOs and also
founders and entrepreneurs and I can
tell that even though they're talking
about customers they're really focusing
on competitors and it is a huge
advantage to any company if you can stay
focused on your customer instead of your
competitors so then you have to identify
who is your customer so at the
Washington Post for example is the
customer the people who buy
advertisements from us know the customer
is the reader
full-stop with the customer is the
reader and then by the way where do
advertisers want to be advertisers want
to be where there are readers so it's
really not that complicated you know it
sort of it comes around really well and
in the school who are the customers is
it the parents is that the teachers no
it is the child and that's what we're
going to do we're gonna be obsessively
compulsively focused on the child we're
going to be scientifically we can be and
we're gonna use heart and intuition when
we when we want to when you use your
intuition make decisions where is the
intuition leading you now on your second
headquarters
[Laughter]
all right
can can we just take a moment to
acknowledge that that may be the best
segue in the history of interviewing
seriously David so that is that is
alright that's amazing answer is the
answer is very simple we we will
announce the decision before the end of
this year so we've made tremendous
progress the team is working their butts
off on it and we will get there
no no hey be nice come on but you know
you already have something in one
Washington and what about another
Washington area you got yeah no that's
right we in in Seattle we call this the
other Washington okay this is so
speaking of Washington you've bought a
few years ago as you mentioned the
Washington Post why did you buy the
Washington Post you had no background in
that area what what convinced you to do
that okay first of all I was not looking
for a newspaper I had no intention of
buying a newspaper I had never thought
about the idea had never occurred to me
it was never something wasn't like a
childhood dream no nothing and my friend
Don Graham who at that time I had known
15 years I know him 20 years now he
approached me through an intermediary
and wanted to know if I would be
interested in buying the Washington Post
and I sent back word that I would not
because I didn't really know anything
about newspapers and Dawn over a series
of conversations convinced me that I
that was unimportant because we had
inside the Washington Post we have so
much talent that understands newspapers
that wasn't what the problem was but
they needed was somebody who had an
understanding of the Internet and so so
that was the first thing that's kind of
how it got started and then I so I did
some soul-searching and again my
decision-making process something this
would definitely be intuition and not
analysis the the the financial situation
of the Washington Post at that time this
is 2013 was very upside-down and is a
fixed cost business and they had lost a
lot of revenue
over the previous five or six years not
through any fault of the people working
there or of the leadership team all of
the paper had been managed very very
well the problem was a secular one the
internet was just a roading all of the
traditional advantages that local
newspapers had all of them I mean it was
just taking away every gift that the the
local newspaper had was kind of
systematically removed by the internet
and so that's why you see this it's a
it's a it's a it's a profound problem
across local newspapers all around the
country and in fact the world and so so
I had to do some soul-searching and I
said you know is this something I want
to get involved in if I'm gonna do it
I'm gonna put some heart into it and
some work into it and I decided I would
only do that if I really believed it was
an important institution and I said to
myself if this were a financially
upside-down salty snack food company the
answer would be no and but but it was
very soon as I started thinking about
that way I was like this is this is an
important institution it's really it is
the newspaper in the capital city of the
most important country in the world the
Washington Post has an incredibly
important role to play in this democracy
there's just no doubt in my mind about
that and
and so as soon as I had passed through
that gate I only had one more gate that
I had to go through before telling dawn
yes and that was I wanted to look myself
you know be really open with myself and
look in a mirror and sort of think about
the company and be sure that I was
optimistic that it could work because
you know if it were hopeless that would
also be and not something I would get
involved in and I looked at that and I
was super optimistic and it needed to be
transitioned to a national and a global
publication there's one gift that the
internet brings in newspapers it
destroys almost everything but it brings
one gift and that is free global
distribution in the old days of paper
newspapers you would have to build
printing plants everywhere and your
logistics operations to have a truly
global newspaper or even a really
international news paper super expensive
heavy capex investments that's why so
few papers actually became national or
global no not really no global ones to
speak of depending on how are you what
you count and so but today with the
internet you get that gift of free
distribution so we had to take advantage
of that gift and that's the that was the
basic strategy we had to switch from a
business model where we made a lot of
money per reader with a relatively small
number of readers to a little bit tiny
bit of money per reader on a very large
number of readers and that's the
transition that we did last night the
I'm pleased to report to you that the
post is profitable today the newsroom is
growing it's been growing every year
since I've been there Marty Baron who
leads the newsroom is killing it I think
he's the best editor in the newspaper
business
we have Fred Ryan who is the publisher
Fred Hiatt at the editorial page they're
killing it shy lash our head of
Technology is a superstar so we are you
know that it's working and I'm so proud
of that team and I know for a fact when
I'm 80 or let's say I always project
myself forward to age 80 but as I get
older I'm starting to do 90 so I know
that when I'm 90 it's gonna be one of
the things I'm most proud of is that I
took on the Washington Post and helped
them
very rough transition so when you and
you agreed to buy it
I think the asking price was 250 million
dollars you didn't ago she ate you know
hip done I asked him how much he wanted
he said 250 I said fine I didn't
negotiate with him and I did no due
diligence and he I wouldn't need to it
done he tried like to sell I I had you
know Don told me every warts and pimple
and he told me all the things that were
great and every single thing he told me
on both sides of that ledger turned out
to be true okay so now that you own the
Washington Post sometimes there are some
people who criticize some things that
The Washington Post says and you've been
remarkably quiet I have no idea what
you're talking about
well you've been remarkably quiet in not
defending yourself well I do defend the
post and so I don't I don't I don't feel
the need to defend Amazon but but I do I
will say this it is a mistake for any
elected official in my opinion I don't
think this is a very out-there opinion
to attack media and journalists I
believe that it is an essential
component
of our democracy there has never been I
was gonna say never been an elected
official who liked their headlines I
think there's probably a no no public
figure who has ever liked their
headlines it's okay it's part of the
process you know it's it's if you're the
president the United States or a
governor of a state or whatever you you
don't take that job thinking you're not
going to get scrutinized you're going to
get scrutinized and it's it's it's
healthy and somebody very you know what
what what what the president should say
is this is right this is good I'm glad
I'm being scrutinized and that would be
so secure and confident but it's really
dangerous to demonize the media
it's dangerous to call the media
lowlifes it's dangerous to say that
they're the enemy of the people we live
in a society where it's not just the
laws of the land that protect us we do
have freedom of press it's in the
Constitution we but what we but it's
also that social norms that protect us
those we we it works because we believe
those words on that piece of paper and
every time you attack that you're
eroding it a little bit around the edges
now look I don't want to be dramatic
here we are so robust in this country
the media is going to be fine we're
going to push through this and by the
way Marty Baron would tell you this is a
super important point he will always say
he'd meet when he meets with the
newsroom I've heard him say many times I
say it myself when I meet with
journalists at the Washington Post we
Marty says we are the administration may
be at war with us we are not at war with
the administration just do the work just
do the work that's Marty's friend so you
have I didn't mention the president but
you mentioned the president so since you
mentioned the president have you met the
president he was a lawyer wasn't it
right so you've met the President on a
couple occasions and yeah talk to him
very much as he call you in for lunch or
dinner and not that much well I'll keep
my conversations with the president to
myself
but yes I've had a couple of
conversations with him and this doesn't
make you think you want the job yourself
though right it's not a job you would
ever aspire to are you asking me if I
would run for president yes I'll be your
VP you run you run well no I think you'd
be a better candidate but yeah let's
talk about how you came to the situation
where you are today so you grew up in
Texas initially yes I was born in
Albuquerque all right as a but I left
when I was three or four and I moved to
Texas he moved to Texas and from early
age were you a pretty smart student and
your teachers tell you this you know you
were good or I have always been
academically smart and that you know by
the way the older I get I realized how
many kinds of smart there are there are
a lot of kinds of smart they're a lot of
kinds of stupid too but but there are
you know I see people all the time who I
know they wouldn't have gotten a pluses
on you know their calculus exams but
they're but they're incredibly smart but
yes I was a very good student right so
you ultimately moved into high school in
Miami yes and then you were
valedictorian of your class yes and then
you gave a speech as the valedictorian
saying you thought we should colonize
space or something like that I did it
was 1982 I graduated from high school in
1982 big public rights of Miami Palmetto
Senior High go Panthers
and there were 750 kids in my graduating
class and I loved high school I had so
much fun we had I lost my library
privileges because I laughed too loudly
in the library and what about that
laughs where did you get that laughter
I'm you know it is distinctive I've had
that laugh all my life there was a short
not that sort there was a multi-year
period where my brother and sister would
not see a movie with me because they
thought it was too embarrassing
and my but I don't know why I have this
laugh it's just it's just and I laugh
easily and often the people who know me
you know yes my mom or anybody who knows
we will and they'll say if Jeff's
unhappy wait five minutes
and I can't maintain unhappiness I guess
I have you know good serious levels or
something so you you graduated as value
Tori and you decide to go to Princeton
how come you decide to go to Princeton
because I wanted to be a theoretical
physicist and I so I went to Princeton
and I was a really good student as I
pointed out already I got eight pluses
on almost everything I I had was in the
honors honors physics track which starts
out with you know a hundred students and
by the time you get to quantum mechanics
it's like thirty so I'm in quantum
mechanics I think this is like junior
year and I've also been taking a bunch
of computer science classes and
electrical engineering classes which I'm
also enjoying and I I can't solve this
partial differential equation it's
really really hard and I've been
studying with my roommate Jo who also
was really good at math and and the two
of us worked on this one homework
problem for three hours and got nowhere
and we finally said we looked up at each
other over the table at the same moment
we said yo Santa because yo Santa was
the smartest guy at Princeton and we
went to you asanas room and he was Sri
Lankan and in the face book which was an
actual paper book at that time there
were his name was three lines long
because I guess in Sri Lanka when you do
something good for the King they give
you an extra syllable on your name and
so we had a super long last name the
most humble wonderful guy and we show
him this problem and he looks at it he
stares at it for a while and he says
cosine and I'm like what do you mean
he's like that's the answer and I'm like
that's the answer and he's like yeah let
me show you so he brings us into his
room he sits us down
he writes out three pages of detailed
algebra everything crosses out and the
answer is cosine and I said listen yo
Santa
did you just do that in your head and
you said no that would be impossible
three years ago I solved a very similar
problem and I was able to map this
problem on to that problem and then it
was immediately obvious that the answer
was cosine and I that was an important
moment for me because that was the very
moment when I realized I was never going
to be a great theoretical physicist and
so I started doing some soul-searching I
was like that you know that is a magic
trick it's the people who you know
theoretical physics in most occupations
if you're in the 90th percentile or
above you're gonna contribute in
theoretical physics you've got to be
like one of the top 50 people in the
world or you're really just not helping
out much you know you're again and so I
was very clear that I like I saw the
writing on the wall and I changed my
major very quickly to electrical
engineering a graduated summa laude
I graduated summa laude Phi Beta
Kappa Phi Beta Kappa and then you went
into the highest calling of mankind
finance yes I went I went to New York
City and I ended up working at a
quantitative hedge fund run by a
brilliant man named David Shaw de Shah &
Co and I started there when there were
only 30 people when I left there were
about 300 and David is still one of the
most brilliant people I've ever met I
learned so much from him I used a lot of
his ideas and principles on things like
HR and recruiting and what kind of
people to hire when I start a very very
good well-known hedge fund and you're a
star there as I understand what
propelled you to say I'm quitting this
I'm gonna start a company selling books
over the internet and I'm gonna do it
from Seattle where did that idea come
from I came across the fact so this is
1994 nobody has heard of the Internet
very very few people was used at that
time mostly by scientists and physicists
and things like that we used it a little
bit of deshawn for some things but not
much and
and and I came across the fact that the
web world wide web was growing at
something like twenty-three hundred
percent a year this is an i-94 and
anything growing that fast is even if
it's baseline usage today is tiny it's
growing so fast it's got to be big and
so I looked at that and I was like
there's got to be I should come up with
a business idea and get you know on the
internet and then let the internet go
around this and we can keep working on
it and so I made a list of products that
I might saw my and I started forced
ranking them and I picked books because
books is super unusual in one respect
which is that there are more book items
in the book category than there are
items in the other category the three
million different books active and in
print around the world in a given time
so my my the founding idea of Amazon was
to build Universal selection of books
the biggest bookstores only had 150,000
titles and so that's what I did and I
you know I hired a small team and we
built we built the software I moved to
Seattle why do I did you pick Seattle
because of Microsoft yeah it was two
things the largest book warehouse in the
world at that time was in nearby in a
town called Roseburg Oregon and then
also the recruiting pool that was
available from Microsoft I mean you told
your parents you're gonna equip de sha
where you're successful making
presumably a fair amount of money yeah
and you told your wife McKenzie that
you're gonna move across the country
what did they all say they were
immediately and reflexively supportive
right after they asked the question
what's the internet and so know that but
this is right you know you know you with
your loved ones you you you bet on them
you're not betting on the idea you're
you're you you are betting on the person
I told my but I told my boss David Shaw
that I was gonna do this thing he went
on a long walk with him in Central Park
and he said finally you know after a lot
of listen II said you know what Jeff
this is a really good idea I think
you're onto a good idea here but this
would be a better idea for somebody who
didn't already have a good job and that
actually made so much sense to me and
that he convinced me to think about it
for two days before making a final
decision and that was
that is one of those decisions I made
with my heart and not my head and I
basically said I don't want to regret I
don't when I'm 80 now 90 I have I want
to have minimized the number of regrets
that I have in my life and most of our
regrets are acts of omission they're
things we didn't try it's the path
untraveled those are the things that
haunt us well and so anyway I have one
of those it relates to this you know
when you we're trying to get the
bibliography of books in print to sell
you went to a company that my firm owned
Baker and Taylor acre and Taylor which
had started in 1839 never made a profit
since 1839 it was always breakeven and
as I understand it the salesman was told
by you that you would give them a small
piece of the company you were starting
to have a lot of cash our salesmen said
no we don't want a piece of a company we
want some cash yeah so you gave some
cash and later when I heard about this I
flew out to see you yeah in your
ramshackle little office building and I
said you know I think that it's like
1997 right this was a long time ago the
first time we met and so I said that
deal wasn't so good we'd like the piece
of the company whatever you were
thinking of giving us and you were
actually very gracious you didn't say
get out of here I don't need you anymore
you said look I don't really need you
frankly but you were helpful in the
beginning so we'll cut up the deal and
I'll give you a little piece of the
stock yeah and you did and that's
thought today is worth about five
billion dollars unfortunately we sold it
right at the IPO yeah so
but it's a testament to your character
that that doesn't bother you though it
does bother me I I mentioned it every
actually I think about every day but I
do remember when I went out there and
you had your desks were labeled you had
like doors where yeah we still do and
you were telling me that you had to go
deliver the books yeah for the post
office yourself I still I don't still
delivered suppose but I was doing that
for years and I said I was packing boxes
I might not know in my hands and knees
them in the first month I was packing
boxes on my hands and knees on the hard
cement floors and with somebody else
didn't standing next to me kneeling next
to me we're packing and and I said you
know what we need knee pads this is for
killing my knees and this guy packing
alongside me said we need packing tables
and I was like that's the most brilliant
idea I've ever heard and the next day I
went and bought packing tables and it
like doubled our productivity so where
did the name Amazon come from Earth's
biggest river Earth's biggest selection
okay that seems simple was that
an easy choice or were there other
candidates well the first name I named
it Cadabra I was I had these it's hard
for you it's really hard to impress upon
you how small this beginning was but
when I was driving to Seattle I wanted
to hit the ground running I wanted to
have a company incorporated and I wanted
to have bank accounts set up and so I
called a friend and and he recommended
his lawyer to me turned out this guy was
actually his divorce attorney
but his but this guy incorporated the
company for me and set up bank accounts
and said I need to know what name you
want the company to be for the
incorporation papers and I said cuz over
the phone I said Cadabra like
abracadabra but it's a suit Cadabra and
he said cadaver and I was like okay
that's not gonna work and but I like go
ahead with Cadabra for now
and I'll change it and so like three
months later I changed it to Amy so what
propelled you to sell things more than
books and obviously if you're only
selling books today you wouldn't be the
richest man in the world presumably it's
the idea that you're selling other
things when did you first get the idea
to sell other things we after books we
started selling music and then we
started selling videos and then I got
smart and I I emailed a thousand
randomly selected customers and asked
them besides the things we felt today
what would you like to see a cell and
that answer came back
incredibly long-tailed people said
basically the way they answered the
question was with whatever they were
looking for at that moment so like I
remember one of the answers was I wish
you've sold windshield wiper blades
because I really need windshield wiper
blades and I thought to myself we can
sell anything this way and and then so
then we launched electronics and toys
and many other categories over time and
the vision became because you read the
original business plan it's just books
well 1997 you went public yeah and the
value of a company was under a billion
dollars and maybe 600 million or
something 3 3 3 something I think write
better IPO so and then went underwater
for a while right your stock at one
point I think went to $100 but then it
went down to six or something like that
at the peak of the internet bubble our
stock peaked some around a hundred and
thirteen dollars and then after the
internet bubble you know busted open our
stock went down to six and went from a
hundred and thirteen to six in less than
a year my annual shareholder that year
starts with a one word sentence and that
one word sentence is the word ouch so
most of those internet companies of the
dot-com era are out of business yeah
you survived what was it that made you
to survive and virtually the rest of
them are gone well I it's very the whole
period is very interesting because the
stock is not the company and the company
is not the stock and so as I watched the
stock fall from 113 to 6 I was also
watching all of our internal business
metrics number of customers profit per
unit
you know everything you can imagine
defects etc every single thing about the
business was getting better and fast and
so as the stock price was going the
wrong way
everything inside the company was going
the right way and I you know so I wasn't
we didn't need to go back to the capital
markets we didn't need more money the
only reason you know a financial bust
like the internet bubble bursting is you
know makes it really hard to raise money
but you know we already had the money we
needed so we just needed to continue to
progress Wall Street kept saying well
Amazon's not making any money they're
just getting customers where the profits
where the profits and Wall Street kept
beating you up on that and your response
was I don't really care what you think
well I was on television with Tom Brokaw
he pulled together half-a-dozen internet
entrepreneurs from that era this is you
know in turn I think it's been right
before the bubble burst maybe were right
after I camera but in that area and he
was interviewing all of us and he
finally turned to me and he said mr.
Bezos can you even spell profit and Tom
by the way Tom Brokaw is now one of my
good friends and but he's like can even
spell profit and I said it sure PR OPH
et and he he burst out laughing and and
but look I Amazon was you know people
always accuse us of selling dollar bills
for ninety cents and said look anybody
can do that and grow revenues that's not
what we're doing
we always had positive gross margins
it's a fixed cost business and so what I
could see is that from the internal
metrics is that what at a certain volume
level that we would cover our fixed
costs and the company would be
profitable so who came up with the idea
of prime prime seems to be a great way
to get money in advance of people
actually getting the services yeah who's
like actually it's very so like many
inventions inside of a team and I love
team inventing is my favorite thing so I
tap-dance into the office I love Amazon
I have so much fun there I love Blue
Origin I love the Washington Post but
Amazon is my full-time job and I get to
invent I get to live 2 to 3 years in the
future
and most of the invention we do there is
you know if somebody has an idea and
then other people improve the idea and
other people come up with objections why
I can never work and then we solved
those objections and it's a very it's a
very fun process prime there were a
couple of things one one of our board
members being Gordon always wanted us to
have a loyalty program and he ever he
would bring this up every board meeting
and he you know and the loyalty programs
that we would think about were things
like frequent flyer miles which don't
really work in a business like Amazon in
my opinion there are a lot of reasons
that they work for Airlines but that's
different and there's structural
differences and the but so we kept to
think but we're always wondering what
could a loyalty program be and then
actually a kind of a junior software
engineer came up with this idea not as a
loyalty program but this idea that we
could offer people kind of an
all-you-can-eat buffet of fast free
shipping and when we modelled that so
then you know the finance team went and
modeled that idea and that the results
were horrifying that we would offer
unlimited shipping shipping is expensive
and that we would and customers loved
free shipping so at this point we
already had something called free Super
Saver Shipping where we would for in
exchange for letting the product go very
slow to you and in exchange for having a
certain minimum order threshold size
then you could get free shipping but
this was gonna be no order threshold so
you could buy you know a single $20 item
or a single $10 item and free two-day
shipping and when we modeled this it
didn't look pretty but we could see I
mean again back to that you have to use
heart and intuition there has to be
risk-taking you have to have instinct
all the good decisions have to made that
way you do it with a group you do it
with great humility because by the way
getting it wrong isn't that bad that's
the other thing
when when we make mistakes and we've
made Dizzy's like the fire phone and
many other things that just didn't work
out I can I could look we don't have
enough time for me to list all of our
failed experiments but the big winners
pay for thousands of failed experiments
so you try something like prime and it
was very expensive at the beginning it
cost us a lot of money because what
happens when you offer a free
all-you-can-eat buffet who shows up to
the buffet first the heavy eaters it's
scary it's like oh my god did I really
say as many prawns as you can eat and
and so that is what happened but but
surely we could see the trend lines we
could see that you know the different
all kinds of customers were coming and
they appreciated that service so that's
what by the way when you have your team
by the way they're a feeder my answers
are too long you're sensing this
audience cut me off so I'm not used to
cutting off the richest man in the world
so so let me ask you this are killing me
David when when you said that you sit
around with your team and so forth but
you didn't like meetings before 10:00
a.m.
no you'd like to get 8 hours of sleep
yes don't like powerpoints explain all
that why is that ok
many so I I like to putter in or I get a
pearl I go to bed early I get up early I
like to putter in the mornings I like to
read the newspaper I like to have coffee
I like to have good practice with my
kids before they go to school so I have
my kind of puttering time it's very
important to me and so that's why I set
my first meeting for 10 o'clock I like
to do my high IQ meetings before lunch
like anything that's going to be really
mentally challenging that's the ten
o'clock meeting and because by 5:00 p.m.
I'm like I can't think about that today
let's try this again tomorrow at 10:00
a.m. and and so then on sleep I get 8
hours of sleep I prioritize it unless
I'm traveling in different time zones
sometimes it's impossible but I am very
focused on it and
and therefore me I need a dollar sleep I
think better I have more energy my mood
is better all these things and think
about it as a senior executive what do
you really get paid to do as a senior
executive you get paid to make a small
number of high quality decisions your
your job is not to make thousands of
decisions every day so let's say that I
slept 6 hours a day well let's go really
crazy and say I slept 4 hours a day so
now I just got 4 so-called productive
hours back so if I was going to you know
have say 12 hours of productive time
during any waking day now all of a
sudden I have 12 plus 4 I have sixteen
productive hours so I have 33% more time
to make decisions so if I was gonna make
you know a hundred decisions now I can
make 133 decisions but if I did that
arithmetic wrong I'm sorry
and and so your make a hundred and
thirty three decisions is that really
worth it if the quality of those
decisions might be lower because you're
tired or grouchy or any number of things
now it's different if it's a startup
company I mean you know you're really
you know when Amazon was a hundred
people I was a different story but but
Amazon's not a start-up company and all
of our senior executives operate the
same way I do they work in the future
they live in the future none of the
people who report to me should really be
focused on the current quarter I always
tell people sometimes I get you know
we'll have a good quarterly conference
call or something and and Wall Street
will like our quarterly results and I'll
go people will stop me and say
congratulations on your quarter and I
say thank you but what I'm really
thinking is that quarter was baked three
years ago i right now I'm working on a
quarter that's going to reveal itself in
2021 sometime and that's what you need
to be doing you need to be out sort of
you know two or three years in advance
and if you are and then why do I need to
make a hundred decisions today if I make
like three good decisions a day that
enough and they should just be as
high-quality as I can make them Warren
Buffett says he's good if he makes three
good decisions a year and so you know
and I really believe that so I care what
your question was like a triple compound
question right so you've got at least
time I really let me ask you this okay
who have revolutionized retail and
people buy so many things over the
internet people are obsessed with buying
things or even by the way when you buy
over the Internet Amazon do you ever get
the wrong orders anything ever wrong
what do you do if you call up and
complain or you don't have any problems
no I I I'm customer of Amazon hopefully
like all of you in this no one person
whole Tyner service isn't even this room
who's not an Amazon customer see me
right afterwards and I'll walk you
through it it's m'm and i and i treat
them like the same way i treat a problem
that i would get from customer my email
address is famous and i keep it and then
I read it it's Jeff at amazon.com I
don't see every email that I get anymore
because I get too many but I see a lot
of them and I and I use my curiosity to
pick out certain emails I'll get one
from a customer and there's a defect you
know we've done something wrong that's
the usually people are writing us not
always but usually the writing is
because we've screwed up their order
somehow and I am so I look at this and
for some reason it's something seems a
little odd about that one and so I asked
the team to do a case study and and find
real root cause or causes it's usually
causes real root causes and then real
root fixes so that when you fix it
you're not fixing it for that one
customer you're fixing it for every
customer and that process is a gigantic
part of what we do so I would treat my
if I have a failed order or some bad
customer experience I would treat it
just like that
oh you've revolutionized retail as I say
but now you were in the bricks and
mortar business you bought whole foods
that was the theory behind buying
something that doesn't sell things over
the internet well there we're very
interested in physical stores and we
have it I've been asked for years we
ever open physical stores literally 20
years haven't asked that question and I
always
say yes but only when we have a
differentiated differentiated offering
something's not me too
because that space physical stores is so
well served if we offer a me-too product
offering it's not gonna work we're and
it's also just we're not very good at
that most of the whenever we've tried
dabbling in something that's a me-too
service we tend to get beaten it doesn't
work we're our culture is much better at
pioneering and inventing and so we have
to have something that's different and
that's what Amazon Go is it's completely
different the Amazon bookstore
completely different and we have ideas
about how to merge Prime and Whole Foods
to make that those are still rolling out
you haven't seen them yet but to make to
use Amazon Prime to make Whole Foods a
very differentiated experience and
continue to add technology to that and
what you know and so basically Whole
Foods
I love whenever I'm talking to Amazon
buys a lot of companies usually there's
much smaller than Whole Foods but we buy
a bunch of companies every year and I'm
always trying to assess what I meet with
the entrepreneur who founded the company
I'm always trying to figure out one
thing first and foremost is that person
a missionary or a mercenary and the
mercenaries are trying to flip their
stock the missionaries love their
product or their service and love their
customer and trying to build a great
service by the way the great paradox
here is that that's usually the
missionaries who make more money and you
can you can tell really quickly just by
talking to people and when I met John
Mackay who's the founder of Whole Foods
just it's a missionary company he's a
missionary guy and so what we're gonna
be able to do is take some of our
resources some of our technical
technological know-how and and expand
the Whole Foods mission they have a
great mission which is to bring
nourishing food to everybody organic
nourishing food to everybody and but you
know we have a lot to bring to that
table in terms of resources but also in
terms of operational excellence and in
terms of technology know-how now one of
the other companies you started with in
your company which is technologically
superior company is Amazon Web Services
where that
you come from AWS has been we started it
I don't know a long time ago now 15
years ago and and worked on it behind
the scenes for a long time and then
finally launched it it has become a very
large company and it at AWS we
completely reinvented the way that
companies by computation so
traditionally if you're a company and
you needed computation you would build a
data center and you'd fill that data
center with servers you'd have to
upgrade the operating systems of those
servers and keep everything running and
so on so on none of that added any value
to what the business was doing it was
kind of price of admission
you know undifferentiated heavy lifting
and what we saw at Amazon is we were
doing that we were building data centers
for ourself just like that what we saw
is there was tremendous waste of effort
between our applications engineers and
our networking engineers the ones who
run the data centers and they were they
were having to have lots of meetings and
planning fleet sizes and all these like
non-value-added tasks and we said look
what we can do is develop a set of
hardened api's that allow these two
groups the applications engineers and
the networking engineers to have roadmap
meetings instead of these fine-grained
meetings and then we'll expose those
api's to the applications engineers and
they can just take as much compute
resources they want well and as soon as
we hatched that plan it became
immediately obvious to us we were just
gonna do that for ourselves and as soon
as we did that it was immediately
obvious that every company in the world
was gonna want this
and then something then a business
miracle happened
this never happens this is like the
greatest piece of business luck in the
history of business so far as I know we
faced no like-minded competition for
seven years it's unbelievable and we
like I'll give you it like when I
launched amazon.com in 1995 Barnes &
Noble launched Barnes and noble.com in
1997 two years that's very Clack that's
very typical if you invent something new
we launched Kindle Barnes and Noble
launched No
two years later we launched Eko Google
launched Google home two years later
when you pioneer if you're lucky you get
a two year head start nobody gets a
seven year head start and so that was
incredible because and I think it was a
whole confluence of things I think that
the big established enterprise software
companies did not see Amazon as a
credible enterprise software company and
so we had this long runway to build this
incredible little feature-rich and it's
just so far ahead of all the other
products and services available to do
this work today and the team doesn't let
up there this team led by Andy Jesse and
Teresa's here so we're we're you Teresa
Teresa's everybody here in Washington
knows Teresa but this team is just
they're killers I mean they're they're
just innovating on the product side so
rapidly and they're running everything
so well I'm incredibly proud of them
Amazon itself has virtually no
competition in its online sales so who
is number two to you on online sales
there's virtually nobody our competition
is where cut we where we elbow for
customers is in in the physical world so
in other words our that when people are
choosing between us there were about 40
percent of so of online sales but we're
like I don't know one low single-digit
percentage of retail sales so you know
97 98 percent of sales eighty-five
percent of sales is two or more is still
in the physical world so that's where we
face competition but do you worry that
the u.s. government might come along or
where the European governments say
you're so big you're so powerful that
even though you haven't done anything
that is traditionally monopolistic
you're just too powerful and some
regulatory thing could come and impair
your business
well not here's here's where I think
about that I have I have a couple I get
asked this question frequently and I
thought it was an original question now
sorry you do do that sometimes but
that's not one of them
and my view on this is very simple all
big institutions of any kind are going
to be and should be examined scrutinized
inspected governments should be
inspected government institutions big
educational institutions big nonprofits
big companies they're gonna get scrutiny
it's not personal it's kind of what we
as a society want to have happen so
that's that's one thing and I remind
people internally when when you know
that if they don't take this personally
that will lead you and a lot of wasted
energy this is just normal it's actually
healthy it's good we want to live in a
society where people are worried about
big institutions so that's okay and then
the second thing I think is we are so
inventive that whatever regulations are
promulgated or however it works that
will not stop us from serving customers
so to really you know I mean under all
kind of regulatory frameworks that I can
imagine customers are still going to
want low prices they're still going to
want fast delivery they're still going
to want big selection and so these
things are so fundamental those are the
things that we do so I would say that I
will say one more thing as long as we're
talking about big companies is it's
really important that that politicians
and others not they need to understand
the value that big companies bring and
not demonize or vilify business in
general or especially I'm visiting well
they shouldn't vilify big companies and
they certain to vilify business in
general for sure and the reason is
simple um there are certain things only
big companies can do you know I've seen
this the whole way I know what Amazon
could do when we were 10 people and I
know what we could do was we were a
thousand people and I know we could do
or ten thousand I know we can do today
we're half a million and you know give
you a more vivid example of this I love
you know garage entrepreneurs I invest
in a lot of their company
I know many of them but nobody in their
garage is gonna build an all
carbon-fiber fuel-efficient Boeing 787
it's not gonna happen
you need Boeing to do that if you like
your iPhone you need Apple to do that
you need Samsung to do that these are
things that you know that a
well-functioning they're the
entrepreneurial capitalism does those
kinds of things very well and then there
are market failures where nobody takes
care of the you know this is you know
then you look towards philanthropy and
towards government so you need different
models for different things but you
definitely this world would be really
bad without Boeing and without Apple and
without Samsung and so on so one of your
passions is not just Amazon but its
outer space and space travel yeah lu
origin so you've started Blue Origin a
little bit in secret then you've made it
public you're putting a billion dollars
or more of your own personal capital and
every year next year it'll be more for
the first time all right and what you're
going to get out of it are we going to
have people going into space what is the
yes this is this this is the most
important work I'm doing and I have
great conviction about that it is it's a
simple argument this is the best planet
we have now sent robotic probes to every
planet in this solar system believe me
this is the good one my friends who say
they want to move to Mars
I say look do me a favor move to the top
of Mount Everest for a year first
because that's a garden paradise
compared to Mars and so this gem of a
planet
we're finally as a species big enough to
really impact it and so you know for for
thousands and thousands of years Earth
was really big and humanity was really
small that's not true anymore
and so we faced a choice as we move
forward we're gonna have to decide
whether we want a civilization of stasis
which we could do that's a real that's a
legitimate choice what does it mean it
means we will have to cap population we
will have to cap energy usage per capita
so people don't think about how much
energy they use your metabolic rate as
an animal you use about a hundred watts
of power so use about the same amount of
power as a 100 watt light bulb but your
civilizational metabolic rate as a human
living in the developed world so now
this is a developed world figure is more
than ten thousand watts of power that's
so much you're using when you know just
going about your life all these lights
and driving your cars and your vehicles
and flying across the country and
whatever you're doing that uses energy
you're using on average about 10,000
watts and the in the under the less
developed world by the way they want to
be where we are so there's gonna be a
lot of energy used energy usage for a
long long time has been growing at you
know a few percent a year even as
efficiency has grown very fast so we get
we're always getting more efficient and
even though we're getting more efficient
we keep using more energy and that's a
big part of the reason energy is so
fundamental that's a big part of the
reason that we have the you know we have
the lifestyle we have as the modern
civilization it's it's it takes a lot of
energy and so do you want that to
continue for your grandchildren or your
grandchildren's grandchildren in other
words I want my grandchildren's
grandchildren to be using way more
energy per capita than I am and I would
like to see not have a population cap I
wish there were a trillion humans in the
solar system then there would be a
thousand Einsteins in a thousand
Mozart's but we don't have that long if
you take current baseline global energy
usage and compounded it just a few
percent a year for just a few hundred
years the such is the power of
compounding you have to cover the entire
surface of the earth and solar cells
that is not going to happen so as a
result that we can be sure of that's not
going to happen
so what will that lead to it'll lead to
stasis I don't even think stasis is
compatible with liberty so there's all
sorts of problems that we are about to
face because for the first time in our
civilizational history going back
thousands of years we're now big
compared to the size of the planet we
can fix that problem but we can fix it
in exactly one way
by having by moving out into the solar
system and you know and so my part my
role in that is I want to build reusable
space vehicles that's the heavy lifting
Amazon was able to get started with only
a million dollars in capital and in and
because I got to ride on the back of the
credit card system I got to ride on the
back of the pre-existing transportation
network that could deliver packages the
pre-existing telecommunications network
that could allow people to connect to
our servers all of that all that would
have been hundreds of billions there was
in capex but the heavy lifting was
already in place and that's what allowed
Facebook if you think about it to kids
in a dorm room made this half trillion
dollar market cap company and you know
in an incredibly less than two decades
that's unbelievable
and so but that can't happen in space
there's no way to kids in a dorm room
can start a space company of any
significance because the price of
admission is so high and so I want to
build space infrastructure so that the
next generations of people can use that
infrastructure the same way I use UPS
and FedEx and so on to build Amazon and
that and and and so that's what Blue
Origin is all about so do you ultimately
want that to be your legacy or Amazon
and what would you like to be have as
your legacy world's oldest man that's a
that's a famous line I like but but but
the real thing is I you know it'll be
whatever it's gonna be I'm gonna be
proud of the things I want to I I live
my life in such a way that when I in a
quiet moment of reflection and I'm
thinking back on my life that I have a
few regrets as possible and I don't you
know what what will my legacy be I have
no idea and and I don't even want to
spend a lot of time thank you intend to
give away the bulk of your fortune at
some point your life I tend to give away
I don't know how much of it I'm going to
give away I'm also going to invest a lot
of it in Blue Origin so for me I start
with mission and I think and there are
we have so far figured out three ways if
you have a mission
you can do it with government you can do
it with nonprofit and you can do with
for-profit if you can figure out how to
do it with for-profit that has a lot of
advantages for many reasons one it's
self-sustaining so you know we don't
need you know here's my iPhone the last
thing we need is a company a non-profit
company making phones it turns out
there's a healthy competitive ecosystem
that likes to build these things there's
no market failure here if you like the
Gates Foundation you look at you know
room-temperature vaccines
there's no market for room-temperature
vaccines anybody who can afford a
vaccine you can also afford a
refrigerator and so you have to start
solving problems like that that have no
market solution and then you get to
other things like the court system and
the military and so on you can't even
figure out a non-profit model so the
real answer your question is I'm going
to give away a lot of money in a
non-profit model but I'm also going to
invest a lot of money in something that
any rational investor would say is a
really bad investment which is Blue
Origin but I think it's super important
and if I can't make Blue Origin a
for-profit thing maybe I'll convert it
to nonprofits um at some distant point
in the future but that would be I would
be I wouldn't want that I want I want it
to be a thriving ecosystem is being
healthy how do you stay in shape I
exercise which I enjoy so for me that's
not a not a problem and how do you deal
with the wealth with respect to your
children I mean how do you shield them
from the effects of this enormous wealth
I don't really shield them they're very
very mature they'd you know kids are
smart they know what's going on my
oldest son when he was twelve I asked
him you know do your classmates ever
talk about sure so what do you tell them
I said I told them my life is normal to
me and I thought wow that's so profound
because everybody's life is normal to
them we all have that we all share that
and when you took your oldest son to
college this year you carried his books
up the steps like everybody other yeah I
cared I'd helped to move in
to his dorm and with my wife and it was
bittersweet but son it was also sad I
didn't get sad till the day before well
let's just close with your wife we
haven't mentioned her yeah she's a
Princeton graduate she's a novelist and
she's been supportive of everything
you're doing right and you would like to
say anything else about her I was
waiting for the question okay
we've been married 25 years she also is
a summa laude graduate from
Princeton we didn't meet there we met in
New York City at de Xiang Co where we
worked we got engaged after we got we
dated for three months we were engaged
for three months and then got married so
we our whole kind of dating engagement
period was only six months long its I
also I would like to take a moment to
talk about my parents if that's okay you
didn't ask me but I well I would like to
they're there here in the audience and
my parents are I thank you guys
you know you get different gifts in life
and one of the great gifts I got is my
mom and dad he it's amazing my highest
admiration is withheld for those people
we all know some of them I know several
them who had terrible parents maybe they
were abusive whatever it is and some of
those people who who so admirably break
that cycle and pull out and and make
that all work I did not have that
situation I was always loved my parents
loved me unconditionally and and by the
way it was pretty tough for them you
know she doesn't talk about it that much
but my mom had me when she was 17 years
old she was a high school student in
Albuquerque New Mexico you could ask her
but I'm pretty sure that wasn't cool in
1964 to be a pregnant mom in high school
in Albuquerque New Mexico and in fact my
grandfather who is another incredibly
important figure in my walk in my life
went to bat for her and because the high
school wanted to kick her out you
weren't allowed to be pregnant in high
school there and and my grandfather said
you can't kick her out it's a public
school she gets to go to school and they
negotiated for a while and the principal
finally said okay she can stay and
finish high school but she can't do any
extracurricular activities and she can't
have a locker and I know and then and my
grandfather being a very wise man he was
like done we'll take that deal and so
she finished high school she had me and
then she married my my dad my dad is my
real dad not my biological dad his name
is Mike he's a Cuban immigrant he came
here as part of Operation Pedro Pan and
in fact was put up by a Catholic
Commission not too far from here in
Wilmington Delaware and then got a
scholarship to to college and
Albuquerque which is where he met my mom
so I have a kind of a fairy tale story
and my grandfather possibly because I
mean I'm pretty sure because my parents
were so young starting at age four he
would take me every summer
on his ranch and it was the most
spectacular from age 4 to 16 I basically
spent every summer working alongside him
on the ranch he was the most resourceful
man he would he did all his own
veterinary work he would even make his
own needles he would pound the wire with
a oxy acetylene torch and and drill a
little hole in it and sharpen it and
make a suture like make a needle that he
could suture up the cattle with some of
the cattle even survived and he was a
remarkable man and a huge part of all of
our lives but it is you don't realize
you know you just look back and you know
if you if you don't have these parents
you know it's so important so it's just
a really big deal and my grandfather to
use like a second set of parents for me
well Jeff I want to thank you for a very
interesting conversation and I want to
offer you the first honorary membership
of the Economic Club of Washington I
hope you'll join our club when you
decide ultimately to spend more time
here as we hope you will I'd be
delighted to accept they have a few
gifts for you
this is a copy of the original map of
the district Columbia as designed by
Pierre L'Enfant we hope you'll take this
as a gift we also have a year a
leather-bound copy of the first book
ever sold on Amazon oh wow
fluid concepts in creative analogies
yeah the douglas hofstadter book you got
it right well I'm glad of that and look
at that that's really cool and courtesy
of Ted Leonsis one of the owners of
perhaps the Capitol signed by the
Stanley Cup team nice
so thank you for a great evening a great
conversation thank you he is a super
interviewer thank you