5 Reasons Why Jeff Bezos & Amazon Are What They Are

1994: The Vice President of D.E. Shaw & Co., a Wall Street company, leaves his employment and moves to Seattle to work on a business plan of what would eventually become the world’s biggest online retail store. They say that, for a while, he worked out of his garage.

July, 1995: Amazon sells its first book online.

1997: Jeff Bezos issues his IPO.

Late 1990s: Amazon was running out of an old brick building that shared its block with a needle exchange and a defunct pawnshop. Jeff Bezos flaunted his frugality. He was driving a Honda and was living in a small downtown apartment even as his company had gone public and, on paper, he was worth US$500 million.

Today, his net worth is about US$30 billion and he lives like a mogul but has some thoroughly unconventional methods that have made Amazon what it is today: a cheetah pursuing gazelles.

“Conserve money for things that matter.”

Jeff Bezos is a decidedly non-corporate personality. He wears a uniform of faded blue shirt over denims. He is bald as a retiree and lanky as a teen and he still uses the desk he made for himself in the initial days; a cheap wooden door supported on a metal frame. In fact, all of Amazon’s desks are fashioned the same way.

The Two-Large-Pizzas Rule

This one is quite famous. The rule simply dictates that no team should be bigger than what can be fed with two large pizzas. This means that all of Amazon’s taskforces comprise of 5-7 members only. For a company that thrives on creativity, this rule makes perfect sense. Teams are free to test their ideas without too many onlookers, guarded against group thinking. This is the rule that is responsible for some of the quirkiest and most innovative features on Amazon’s site: Gold Box and Bottom of the Page Deals.

“No, communication is terrible!”

Amazon is a decentralized, disentangled company where small groups work on their visions independently. There is no group communication, to speak of, even as it must have initially frightened the living daylights out of Amazon’s managers.

Have Backbone; Disagree and Commit.

This is one of Amazon’s 11 Leadership Principles:

Leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting. Leaders have conviction and are tenacious. They do not compromise for the sake of social cohesion. Once a decision is determined, they commit wholly.

Some of the most successful entrepreneurs and leaders are a disagreeable lot. At Amazon, the love of debate is courted over the comfort of consensus.

Only what is absolutely necessary. Nothing more.

Amazon’s deal with Melville House established Jeff Bezos’ reputation as the Godfather: say no more than what is important and make an offer they cannot refuse. The floor where Amazon’s Kindle team works is called “Area 51.” Unless you are directly involved with the product, you are not allowed.

Bottom Line

World’s greatest entrepreneurs have a lot to teach but the thing that they all have in common is that they ditch convenience. Jeff Bezos left a comfortable Wall Street career, worked out of a garage, created a giant of a company without flying too high and – well – here he is.