The Everything Store : Jeff Bezos and the Age of Amazon by Brad Stone Book Summary
The book is about how Jeff Bezos, the founder of Amazon, quit a considerable lucrative job and went ahead to found one of the most successful companies, worldwide. It starts with an introduction of Bezos, specifically how his parents immigrated to the US, his childhood, and his early display of idiosyncrasies and talents. It also describes his early career emphasizing how he thrived at the D.E Shaw & Co. It is while working at D.E Shaw that Bezos learned about the internet phenomenon. This fascinated him to the level of quitting his well-paying job to start an online bookstore (Stone, 2014).
The book interweaves Bezos’s personal life with that of Amazon. It elucidates how his family believed in his idea that they went forward to invest a significant amount of money into Bezos’s startup. In his pathway to creating one of the most successful businesses in the world, Bezos also won the investment of other venture capitals, overcome a lot of hurdles, stayed lean, and kept the startup’s expenses considerably low via staying frugal. Bezos also build the corporation around the customer whereby he focused on customer satisfaction and happiness. Finally, he saw Amazon through an initial public offering (IPO) (Stone, 2014).
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The book also details the company’s survival through the dot com boom and subsequent collapse. It explains that Amazon survived against all odds by embracing innovation and pivoting when necessary. It also describes how Amazon’s diversification helped it to grow from a mere startup to one of the largest businesses in the world. Besides the positives, the book also takes an objective approach to describe how Amazon bullied publishers and its pricing approach, which qualifies as a forceful strategy to acquire other organizations of strategic interest to it (Stone, 2014). Nonetheless, the book tells the story of an entrepreneur with an idea as well as the drive and persistence to actualize the idea exponentially.
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What Jeff Bezos the Entrepreneur did wrong
There are many things that Bezos did right but there were also a few that he did wrong. One of the things that he did wrong is bulling book publishers to accept Amazon terms. Bezos threatened not to let the book publishers sell their books on the Amazon platform if they did not accept offered terms. He also forced the publishers to sell the books via the Kindle e-book platform. Another thing that Amazon did wrong was using bots to scan through the web for cheaper prices. Amazon then accordingly adjusted the pricing of items, sometimes for loss. This strategy was designed to be a forceful tactic to acquire businesses that were of strategic interest to Amazon. One such example is Zappos (Stone, 2014).
What Jeff Bezos the Entrepreneur did Right
Two things among the many that Bezos did right include emphasizing a customer-centric approach and leveraging innovation and pivoting. Bezos insisted on placing the customer at the heart of the organization. The book explains that even during meetings, Bezos insists on leaving one seat empty to represent the customer. It is this desire to keep the customer satisfied and happy that saw Amazon attract new customers and maintain the existing ones to the level of growth from a startup to one of the most successful businesses in the world. Regarding leveraging innovation and pivoting at situations dictated, Amazon was able to thrive even during tough times. During Amazon’s head-to-head with Barnes & Nobles, Amazon overcame the challenge to win the battle by leveraging technology. Moreover, rather than insisting on always sticking to its action plan, Amazon pivoted as situations dictated, which allowed it to thrive despite the challenges (Stone, 2014).
How I Would Have Done Things Differently
A thing that I would have done differently is approaching the book publishers in a friendlier manner. Rather than bulling them to accept offered terms, I would have leveraged effective bargaining skills. According to Druckman (2019), the best negotiation approach is to compromise on both sides to strike a win-win deal. If Bezos would have used this approach he would have fostered a better relationship with the publishers that maybe could have been more profitable for both parties. Another thing that I would have done differently is not to lower the prices to the point of making losses to acquire companies with strategic interest in Amazon. Bezos would have approached the companies and struck better deals with them even if it does not mean acquiring them. Sometimes partnerships that involve sourcing can be more profitable than acquiring companies.
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Economic Principles Used in the Business
An economic principle used in Amazon is opportunity cost. Opportunity cost refers to the cost of a missed opportunity as a result of choosing another alternative (Besanko & Braeutigam, 2020). Amazon was willing to forego short-term profits for long-term success. This is evident in many decisions that Amazon made such as lowering prices to the point of making losses to acquire specific companies. Another principle applied by Amazon is utility maximization. The principle refers to a strategic scheme by an individual or a company to seek to achieve the highest level of satisfaction from their economic decisions (Besanko & Braeutigam, 2020). Amazon strategically ensured that as a company it achieved the highest satisfaction from its economic decisions. For instance, the decision to emphasize keeping the customer at the heart of its operations ensured that the company maintained a competitive edge over its competitors.
Learnings from the Book The Everything Store : Jeff Bezos and the Age of Amazon by Brad Stone
There are many things that I have learned from reading the book. One of them is that when one has an idea they should stop at nothing to see it through. Bezos left his lucrative job at wall-street to focus on a startup. He persisted till the idea became one of the most successful businesses in the world. I also learned the value of being strategic. Bezos did not approach business unplanned or reactionary. He strategized by analyzing various factors hence most of his business decisions were evidence-based. Lastly, I also learned that as an entrepreneur one must be flexible so that they pivot as situations dictate. Notably, these are just among the many things that I learned from Bezos’s approach to business.