LAUNCHING AMAZON.COM
After graduating from Princeton University with degrees in electrical engineering and computer science, Jeff Bezos began working on Wall Street. Bank-er's Trust hired him to develop electronic fund management systems. Eventually, he left there to begin working for hedge fund firm D.E. Shaw & Co., where he became the youngest senior vice president. Despite his success, the 30-year-old Bezos left his job at Shaw in 1994 to pursue his dream of creating an Internet retailer. He moved to Seattle, Washington, and began working on a business plan that would allow him to capitalize on what many analysts were predicting to be explosive growth in Internet use. After researching 20 different products he believed could be sold via the Internet, including magazines, CDs, and computer software, Bezos settled on books, guessing that this sizable market, with its wide range of purchase choices, would be well served by electronic searching and organizing capabilities. Books also were relatively inexpensive, and Bezos concluded that consumers would be more likely to make their first purchase online if the risk was minimal. In addition, the small size of most books made for easier distribution. Bezos liked the fact that market share was distributed among many leading publishers. In fact, industry leader Barnes & Noble held less than 12 percent of the $25 billion book retailing market. He believed this market fragmentation left room for fledgling companies.
Bezos decided to set up shop in Seattle, where he would be close to the warehouse of Ingram, a leading U.S. book distributor, as well as to a large pool of technology professionals. He hired four employees and began working in the garage of his new home to build the software that would operate his online site. Although he initially planned to call his new business Cadabra, Bezos eventually settled on Amazon, believing the name of the largest river in the world conveyed Amazon's potential to reach vast numbers of customers. In July of 1995, Bezos launched Amazon.com, a World Wide Web site that offered books at low prices and allowed visitors to search for books by author, title, subject, or keyword. Once a customer placed an order, Amazon requested the title or titles from the appropriate publisher, who shipped them to Bezos' home. At first, Bezos packaged the orders himself and took them to the post office. Typically, customers received their books within five days of placing an order. Books were shipped to all 50 states and 45 countries throughout the world.
In October, three months after its inception, Amazon achieved its first 100-order day. Shortly thereafter, the site became so busy that the beep heard at the office each time a customer completed an order was turned off because its tone became continual. Throughout Amazon's first year, Bezos worked to continually update the site to increase its user friendliness and customer service options. Many of these options also were designed to garner repeat business for Amazon. For example, customers could choose to sign up for e-mail messages that would let them know when their favorite author released a new title.
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