From Seattle it came: How Jeff Bezos is taking over the world
I’ve been Bezos-ified. Chances are, you have, too.
Jeff Bezos, the founder of Amazon.com, has infiltrated every corner of my day. Before I leave the house, I holler at Amazon’s voice-activated personal assistant, Alexa, who tells me the news and weather and the fastest way to work.
No matter when I arrive at the office, at Harvard Business Review, Bezos is already there in spirit. Our website at work is housed in the cloud thanks to Amazon Web Services, a.k.a. AWS. Our press sells books through Amazon.com. I’ve even started testing a new video conferencing service called Chime, built by no other than Amazon.
Around lunchtime, when I stop to check the news on Facebook, more and more of it comes from The Washington Post — which Bezos owns.
By the time I return home, white vans with smiley logos have been trolling through my neighborhood all day, constantly delivering packages. Many of them are addressed to me, especially since we started sticking little branded Wi-Fi buttons around our house to make ordering stuff like Bounty a snap.
You get the point. If my Bezos-ification has reached these depths, how far gone will I be a year from now? Even as I was talking with a Globe editor about this very piece, Alexa kept interrupting me: “Hmm, I can’t seem to answer your question.”
I’m not alone in this Bezos bubble. As the prolific entrepreneur has plowed cash into everything from the Post to virtual grocery stores, along with the physical and virtual infrastructure to zoom it all to your door, we’ve become captive Bezos consumers, relying increasingly upon his technology to anticipate what we’ll want to watch, gift, like, and wear.
His empire now threatens big name companies as diverse as The New York Times and Walmart. And the list of rivals keeps expanding. Amazon has gone head to head with Hulu, Netflix, and HBO with original television and movie production. When the rapacious company announced that it needed to increase shipping capacity, UPS and FedEx were quickly put on high alert. There seems to be no limit to Bezos’s desire to grow — his space-exploration company, Blue Origin, envisions Amazon-style delivery to the moon — and that means that countless other companies may no doubt find themselves in Amazon’s crosshairs.
As his empire and his ambitions swell, Bezos looks like a new kind of competitor on the global scene: someone with essentially bottomless pockets, an ever-expanding cache of data, and a willingness to keep investing in insurgent businesses until the rest of the world recognizes the value in them. Ironically, in an economy fixated on short-term results, exceptional patience pays off.
Massive growth was always Bezos’s plan. When he left Wall Street for Seattle in 1994 to start selling books online, Bezos famously chose the name “Amazon” because he wanted to connote the exotic and gigantic. Books were always just a gateway to his mega-retailing ambitions, and he was unrelenting with his growth strategy: invest in the brand and steal market share at any cost.
In many ways, Amazon was an anti-Walmart. Bezos focused on expanding his customer base and never seemed to make a dime. Walmart, on the other hand, scrimped together lots of dimes to make its profit.
But eventually Bezos’s philosophy won out. He’s now worth about $71 billion, putting him in the top five of the Forbes billionaires club. Bezos is using his ample capital to fund ever new and more daring ventures and innovations. Not everything is a huge success — to wit, the Kindle Fire tablet device never blazed much in sales. But missteps don’t stop Amazon from launching new efforts like the Echo and its personal assistant, Alexa, which was a huge hit this past holiday season.
More surprising was his push into the newspaper business. Bezos purchased the Post for about $250 million from Don Graham, the scion of Katharine Graham, who had built the paper into a powerhouse during the 1970s and ’80s. By 2013, when Bezos scooped up the paper, it had been ravaged by an ever-receding print advertising market.
Bezos went right to work running his same old plays: He invested in the brand and began undercutting and outmaneuvering the competition. Despite its national profile, the Post was still a local D.C. paper. But now, thanks to Bezos, it has become a global player, competing in a different league for readers and ad dollars.
The early signs show that the approach just might be working. The Post is expanding its footprint at a ferocious pace. While it’s a private company and not required to report its numbers, the Post has claimed more than 80 million unique visitors per month, and says that it’s seen massive growth of online subscriptions. From the outside, it looks like something rare: a growing newspaper.
All of this has clearly caught the attention of the top brass at The New York Times. Rivalries between big media companies are nothing new. But what makes this one so intriguing is that Bezos is an interloper who is leveraging his tech background to catapult the Post onto a global stage.
Bezos’s approach has a big advantage in the world of newspapers — most of which are struggling to pay reporters and photographers, let alone duke it out for developers on par with a Facebook or Google.
But Bezos can, in fact, afford both, and he has the fortitude to try new things that might rankle industry stalwarts. Last year, the Post launched Heliograf, an artificial-intelligence engine that can create stories with just a little help (today) from human editors. The new technology, which was piloted with the Rio Olympics, allows an editor to create a template that the computer then fills out using data from digital sources.
The outcome is that the Post can create a vast sea of stories and push them out digitally, offering news on a local, national, and international level. In an interview with Wired, chief information officer Shailesh Prakash described the Post’s approach like this: “It’s the Bezos concept of the Everything Store.”
The Post has been aggressive in its use of Facebook Instant Articles, a format that the social-networking giant promotes to reduce download times. Other publishers have stood on the sidelines, fearful of giving away their content to yet another digital behemoth, but under Bezos the Post can afford to take more risks. As it seeks to expand its reach in the Donald Trump era, the Post has also positioned itself as the paper of resistance and adopted a stark new slogan — “Democracy Dies in Darkness.”
It’s too early to say if Bezos’s approach at the Post will succeed, but his long-term (really long-term) investment strategy is striking.
Bezos’s most insidious products, however, might be the ones you don’t see. Amazon Web Services owns about 45 percent of the market for cloud computing — the remote servers that host websites and store and process data on behalf of client companies. Amazon’s share of this vast and growing industry is larger than those of Google, IBM, and Microsoft combined. To limit its reliance on Amazon, Apple recently moved some of its cloud storage off AWS to its smartphone rival Google.
Cloud services are important because they hold the key to how all of our devices will be interconnected one day. Here, again, Bezos is playing the long game, accumulating key puzzle pieces that may form a picture of dominance one day in the future. While Alexa may seem like a novelty at first, the code behind it is impressive, and Amazon is making it available for use by other companies. Ford, for example, plans to embed Alexa into car operating systems. (If so, maybe voice-enabled commands will actually work.)
Variations of the Amazon story are playing out around the world. Bezos has been battling for years in markets like India — where an upstart player called FlipKart took an early lead in e-commerce, only to watch it erode over time because of Amazon’s persistence and deep pockets.
So, it would seem we are heading for total Bezos-ification. Imagine riding around town in your self-driving vehicle, and hearing Post stories served through the cloud and read by Alexa, who will also have your favorite movies and television shows — all courtesy of Amazon. If you’ve forgotten an important anniversary, don’t worry: Alexa will have flowers delivered by drone to that special someone before you even make it home. Bezos-ification sure is convenient.
It’s also influenced the business world in powerful ways. When a company like Snap warns, on the cusp of a multibillion-dollar public offering, that it may never turn a profit, its founders are echoing Jeff Bezos. Companies like Uber and Airbnb are following in Bezos’s footsteps, too, as they burn through cash to make their brands into household names. Can they sustain it?
And can Bezos? While the Amazon Echo was a hit for sure, many of these new holiday purchases were promptly returned as fearful consumers worried about Amazon listening in on their conversations. On privacy matters, Bezos and his fellow tech entrepreneurs are encountering real resistance, especially in Europe, which has been clamping down on tech companies for some time now. The United States might follow suit — yes, even in the pro-business, antiregulation Trump era.
Another challenge might be one of focus. Bezos’s empire is already sprawling, and he’s now taking on even further-flung pursuits like space travel.
Still, back here on Earth, people like me will keep getting more Bezos-ified by the day. What’s next? Will his package-delivering drones eventually soar? Will his Amazon delivery trucks be self-driving? Will his artificial-intelligence bots tell us what to buy? Will he construct a virtual Amazon world for 24/7 shopping?
If you’re not quite ready to sign up for this level of Bezos-ification, that’s perfectly fine.
Bezos can wait.
Josh Macht is group publisher for Harvard Business Review and head of product innovation for Harvard Business Publishing.