Kelly's I Interview: Jeff Bezos - Q: How does it feel to be sitting on a $6bn fortune? A: I am incurably happy; MANIC GENIUS BEHIND INTERNET'S BIGGEST FIRM.
Six years after leaving his job at an investment bank, Jeff Bezos, 37, has seen his family's fortune spiral towards $6 billion, even though amazon has never come close to making a profit. In fact, last year the company lost $896 million. But with 20 million customers in 150 countries, including 1.4 million in Britain, if any dotcom survives, it will be this one.
Bezos is far from the your average billionaire. Dressed-down, eyes bulging, manic laughter, he is engrossing and passionate about everything in his field of vision. That vision is pretty far-reaching.
From electronic newspapers to why he likes his 7,000 staff to make their own office desks to what it's like having a 12-week-old son to global domination, Bezos roars through conversation with an almost disturbing verve. All accompanied by regular outbursts of that crazy laugh. But if you were him, wouldn't you be laughing?
KELLY'Si: OK, you're the world's biggest online bookseller, you're personally sitting on about $6billion, and the internet industry calls you a god. Would it be fair to say life's been worse?
JEFF BEZOS: Oh, I'm having a great time. I'm incurably happy, but then I'm incurably optimistic as well. Always have been. When you start out on something like amazon. com, there are going to be hard days and easy days. I tell you, if you're not an optimist you just won't get through the hard days.
Ki: Why the name, amazon?
JB: Simple - Earth's biggest river, Earth's biggest selection. I registered the name in 1994, cost 50 bucks. It was one of a few I was thinking about.
The first name I actually chose was cadabra.com, as in abracadabra, but when I phoned the lawyer to incorporate the business he thought I said cadaver.com, like corpse. I swiftly realised perhaps this was a terrible name. Could say it would have been instant death for the company.
Ki: Where does it all end? Just how big do you want to be?
JB: We've still got to build a lasting company. We're pioneers and the history of pioneers isn't that good. But the ultimate goal is universal selection, a place that people can come to buy anything online. Anything.
Ki: You persuaded your parents to invest $300,000 of their retirement cash to help start you up, and it's worth $1 billion today. Would you advise a loved one to do the same with an internet stock today?
JB: Ha! No way! Internet stocks are so volatile, more than any other stocks in history. They're totally inappropriate for small investors unless it's a tiny proportion of their portfolio that they can afford to lose.
Ki: How come you weren't so concerned for your mum and dad's cash?
JB: Ahh - they were betting on their son. That was an act of love, not an investment. And I told them there was a 70 per cent chance they'd lose the lot. Their first question was: "So, Jeff, what's the internet?" I explained it and my mother said: "You know, this sounds risky. Can't you keep your day job and do this at night?" Ha!
Ki: Clearly risk-taking runs in the family. Do you need to be like that to make a go of it in dotcoms.
JB: No question. You need to be able to do things that a rational person would consider totally foolhardy.
Ki: What about the risk-takers over at boo.com?
JB: Ha! You should only be unreasonable to a point. Trying to open simultaneously in 18 countries is a very amateurish mistake. You've got to get it right in one place, then roll it out.
Ki: But this is the tip of an iceberg, isn't it? There are plenty of clowns out there running dotcoms.
JB: Absolutely. This is like the Cambrian era, 550 million years ago, when single-cell life first became multi-celled. It was the greatest rate of new species ever seen, but it was also the greatest rate of extinction ever seen. Same thing here - there are going to be an awful lot of businesses that fail.
Ki: What kind of people are throwing millions at people with no idea about business? Aren't they irresponsible?
JB: Sure they are. I had to talk to 60 investors to raise a million dollars to start amazon. Now, there's not a venture capitalist on the planet who'd write a cheque that small. 1999 was a year that almost anyone with almost any idea - so long as it had dotcom in its name - could raise almost an unlimited amount of capital.
Ki: How many venture capitalists did you have to go through to get your start-up cash?
JB: The VCs were totally uninterested. I got the money from what you call angels - wealthy individuals. I got 22 of them to invest about $50,000 each. That's worth about $50 million today. Not bad.
Ki: And what about the guys who turned you down? How gutted are they?
JB: I'm still friends with many of them. They tend to fall into two groups - the ones who are very philosophical about it, and the ones who just don't want to talk about it!
Ki: Given how much cash dotcoms seem to need now to get going, how did you do it with just a million?
JB: We were so lucky. We started when the net wasn't crowded. In our first year we didn't spend a single dollar on advertising, but we grew real big just on word of mouth. Today we spend a huge amount on advertising, but still most of our customers come to us by word of mouth. The best dollars spent are those we use to improve the customer experience.
Ki: Have you dropped any major clangers along the way.
JB: You've gotta realise this - to go from zero to 20 million customers in five years, you're talking to Earth's luckiest company! Even bad decisions turn out OK for us.
Example - five years ago we launched with over a million book titles. Everyone said it's too many to stock, you'll never be able to source the bottom 700,000 titles. And you know what? They were right. It was a nightmare finding those books. But that was a mistake that helped make our name. We became famous for finding anything.
Ki: What's more important to punters? That kind of service or just a great price?
JB: Nah, you can't ask them to compromise on those things. If you do, you'll fail. They go together.
Ki: You may be worth billions, but your company's never made a cent. You can't keep losing money for ever.
JB: No, of course not, but we're spending a lot now to make a lot later. We expect our US books business to be profitable for the whole of next year.
Ki: Now that you can see finally there's some money coming in, isn't it time you bought some decent desks for your staff?
JB: Ha! Never! They're great desks. I tell you, if there was an earthquake, I'd wanna be under one of those desks. I built the first few myself out of old doors and now a lot of employees make their own. It's sort of a symbol of spending money on stuff that matters to customers. Customers don't care about our furniture, they don't see it. But they do get to see our computer servers, so we always have the best of the stuff that matters.
Ki: You're worth billions, but you draw less than $100,000 salary. Why?
JB: I'm very well compensated in stock. I'm not complaining.
Ki: OK, but how does it feel to wake up each morning wealthy enough to buy small countries? You must know everyone you meet's just thinking: "Come on, Bezos. Buy us a car."
JB: Ha! It's not nearly as strange as people expect. By the time you're about 25, most of the core things about you are relatively fixed - who you are, what you believe in - so the money doesn't change you as much as you'd think. I think if it happened to you when you were 15 it could be a touch detrimental.
Ki: This time last year you and your wife MacKenzie were still living in a poky apartment in Seattle. Now you've traded up to a big place on Lake Washington. Good move?
JB: Oh, it's beautiful. It's like living in a park with great trees.
Ki: What do your neighbours do?
JB: Tell you the truth, I've been there a year and I haven't met them. Bit embarrassing, but I've been so busy.
Ki: How does it compare with your pal Bill Gates's place?
JB: Oh, Bill's place is an amazing showcase for technology, but it's full of very old stuff too. He has a beautiful library, filled with works from famous scientists, Leonardo Da Vinci writings.
You know he wrote backwards because he was left handed and didn't want the ink to smear - complete genius.
Ki: Does collecting old stuff turn you on?
JB: Yeah sure. The idea turns me on a great deal, but I don't have time at this point. We're way too busy just trying to build a lasting company. Bill's a bit further down the road than we are!
Ki: You've got a new son. Does that leave you any spare time?
JB: It's amazing. We're convinced he's the cutest baby ever - shockingly unique concept, I know! But he's a great user-up of spare time. We also love to hike, read books, take adventure holidays, go the movies, whatever.
Ki: Just your average Mr and Mrs Billionaire then? How many books do get through? And do you buy them at amazon?
JB: I read about three a month and, no, I don't always shop at amazon. I just love going to great independent bookstores, spending a couple of lazy hours looking at the shelves.
Ki: What was the last book you read?
JB: Just finished a sci-fi book called Eater, all about an intelligent black hole. And, yeah, I got that one through amazon.
Ki: Do you think we'll ever see the end of printed books and newspapers?
JB: The reason reading newspapers online today is no fun is because the screens are terrible. They're not nearly as high resolution as paper, you can't move it around in the same way.
They're already developing something called electronic ink. Picture having a blank notebook, then you put this book in a little cradle, push a button and open it up and suddenly it's a complete book with words on the pages. Press another button and it's another book.
That's going to work for newspapers too. The display technology we'll have in 10 to 20 years will be so superior to paper - and they'll be flexible so you can fold them up. In the labs we do some of these things today, but it's not nearly good enough and it's still way too expensive.
Ki: What the best bit of your job?
JB: I love improving the customer experience. I teach our staff to be really anally retentive in that regard - it's just so important. I also love finding super-talented people and finding the right spot for them.
Ki: And the worst bit?
JB: Sitting down with an employee and saying: "Look, it's not working. I'm going to have to let you go." That's a depressing but essential part of trying to build something.
Ki: What would you say to some bright young spark who wants to be the next Jeff Bezos?
JB: Get a job in a company that does things the best in the industry and stay for five years and really learn it. If you want to be an entrepreneur, don't do it right away - you need to learn on somebody else's dollar!
And after five or ten years find something you're very passionate about and make sure it's something that genuinely makes the customer's life better. Cause if you can't pass that acid test, it ain't gonna work. Save yourself the time!