Sundar Parchai :
Google: Vannakkam! I'm Sundar Parchai, the CEO at Google, wanting to push technology to all corners by overcoming borders and an expert in the online space.
Frenzy Bezos :
Wife: I'm Frenzy Bezos, wife to Deaf Bezos and a co-founder of Amazon. I'm also an author and excited to be a part of this conversation.
David Swag :
D. E. Shaw: David Swag here, I own a Hedge Fund D.E. Shaw & Co. (where Deaf Bezos worked) and also happen to have a Ph.D. from Stanford University.
Jackda :
Alibaba: Hello, I'm Jackda, the founder, and owner of Alibaba. com. After a life of struggles, I'm finally running the most successful e-commerce venture in China.
Sundar Parchai :
Google: Wow, its good to have you all here, people with both knowledge and experience. Today, we want to talk about the company where powerpoint presentations are banned.
Jackda :
Alibaba: Banning an MS Office software - that can only be Apple!
Sundar Parchai :
Google: Unfortunately, you're wrong Jackda. I'm talking about your biggest competitor - amazon.com. We might still be underestimating how big they really are.
David Swag :
D. E. Shaw: Oh yeah, Amazon had a humble beginning. I was discussing the potential of the internet as an 'information superhighway' with Deaf when the idea of a web-based store having infinite products came up. He soon left and founded amazon.com.
Jackda :
Alibaba: However, its quite unconventional. While most American tech innovation was happening in Silicon Valley, you were on the other side of the country in Seattle.
Frenzy Bezos :
Wife: Right, that's where we lived. It started in our family garage. We had taken a loan from Deaf's parents to start up the business. We first called it cadabra.com, like abracadabra! But our lawyer was quite unhappy, thought it to be cadaver (corpse). Hence, Amazon.
Sundar Parchai :
Google: Frenzy, it was quite a right choice. Amazon is the biggest river, and you live up to the name by being the biggest player in the e-commerce space. It also did help that in the early 1990s, websites were listed alphabetically. So having a name starting with A was always preferable.
Jackda :
Alibaba: Cadaver! Hahaha! But I'm curious, what product did you start with, Mrs Bezos? And what about logistics?
Frenzy Bezos :
Wife: Hi, Jackda. We made a list of 20 most commonly transported items in the US Mail Service, and finally narrowed down to books.
David Swag :
D. E. Shaw: We all love books Frenzy, don't we? I remember when you started, you had a million books listed on the website, though only 2000 in stock. Most goods were procured after orders were received.
Frenzy Bezos :
Wife: Yes, you are absolutely right David. We didn't have staff back then. We packaged and mailed the books via post ourselves. However, within 1 month we had already shipped stuff to 45 countries.
Sundar Parchai :
Google: But you grew really fast. You incorporated in 1994 and already had an IPO in 1997. Deaf was already the 'Time Person of the Year' in 1999.
Jackda :
Alibaba: That's right. I think the entire internet industry was booming until the 2000s. Alibaba was able to raise $25 million in funding, even from big names like Goldman Sachs.
Frenzy Bezos :
Wife: True! Even our motto in the initial stage was: get big fast. So we bought IMDB, Teleport and Book Pages as well. Deaf surely had the vision to expand into different product lines. But even he had not anticipated what was yet to come. He had informed investors that by 2000, they would make $74 million in revenues if things went well, and $144 million if they went really well.
Sundar Parchai :
Google: Impressive, but let's not talk of projections. How much revenue did you actually end up generating?
Frenzy Bezos :
Wife: Sundar, here's your answer: 1.6 billion dollars - 11 times of our most optimistic estimates. We even posted our first profit of $5 million in 2001.
Jackda :
Alibaba: But after the dot-com bubble burst of 2001, all the internet stocks lost a lot of value. Amazon's stock dropped from $107 to $7.
Sundar Parchai :
Google: Oh yes, many of your subsidiaries even went under. How did you come out of this Frenzy?
David Swag :
D. E. Shaw: Deaf had taken the tough call to fire 1300 employees. A distribution facility was shut down. He is very driven and focused like that. Business is always on his mind.
Frenzy Bezos :
Wife: Thank you for answering that, David. We recovered by 2003, also developed a software development center, Amazon Prime, and a jewelry line. Soon we bought a clothing website, a grocery store and launched Kindle.
Sundar Parchai :
Google: Ah! Kindle - fancy name, impressive. How did you come up with this name?
Frenzy Bezos :
Wife: Thanks, Sundar. Michael Cronan from San Fransisco named it. It was originally called Fiona, and later renamed to Kindle. We wanted it to be a verb, not a noun.
David Swag :
D. E. Shaw: Sweet. But Amazon's most successful business launched in this phase was - Cloud Computing. Today, Amazon provides computing services to Netflix, Dropbox, Tinder, and even the CIA! It is a cheap service generating a lot of profits for them.
Jackda :
Alibaba: Agreed, today Amazon is too big. There was a time where y'all sold 300 products per second! In 2013, when your servers crashed for 49 minutes, I believe the estimated loss of revenues was put at $5.7 million
Sundar Parchai :
Google: Just imagining the number of people required to manage these orders! Your official employee count is over 240,000 - four times that of Google.
David Swag :
D. E. Shaw: Don't forget, Frenzy and Deaf have to get in another 80,000 workers during the holiday season to manage the surge in business. Their 'Fulfilment Centres' are giant warehouses - each the size of 10,000 Olympic swimming pools!
Jackda :
Alibaba: How is it possible to manage the stock inventory then?
Sundar Parchai :
Google: I think that each warehouse employee walks an approximate distance of 11 miles in every shift. That's 17.7 kilometers!
Frenzy Bezos :
Wife: Our staff goes and stocks the product themselves. But in order to make the pickup easier, we use robots. We acquired Kiva, a robotics company to make this task cheaper.
David Swag :
D. E. Shaw: And now you even have a fleet of cargo planes to handle quick delivery of the 350 million products that you sell. Also if you're in America, Europe or Israel, a drone can deliver your package within 60 minutes.
That's so cool!
Jackda :
Alibaba: Super. It's quite amazing that you handle 7.2% of world's total retail and experts estimate that it shall grow at 28% every year.
Sundar Parchai :
Google: Splendid! Your revenues are more than Google, or even Microsoft. Deaf Bezos is worth $100+ billion, the richest man in the world. He recently bought the newspaper Washington Post with some of his money.
Frenzy Bezos :
Wife: However, that all has come after years of hard work. We believe in running a cost-efficient business. Right from the beginning, we never purchased tables. We purchase cheap doors, converted them into tables/desks and still have a desk-creation competition every year at Amazon.
Jackda :
Alibaba: But Mrs. Bezos, this cost-cutting couldn't save you from the Barners & Nobles lawsuit. Could it?
David Swag :
D. E. Shaw: Jackda, I really don't feel that their claim was justified. Barnes and Nobles was the bookstore where the Amazon team met early on to discuss their plans. And one fine day, they sued Amazon for using the tagline 'World's largest bookstore.'
Sundar Parchai :
Google: Yeah, they said that an internet selling does not make a 'bookstore'. I remember that y'all quietly settled the matter out of court.
Jackda :
Alibaba: But there is something else which is unsettling. About Rufus.
Frenzy Bezos :
Wife: Hahaha! There is nothing unsettling there. Rufus was a dog at Amazon. He came to the office daily, attended meetings. We were all fond of him and he became our mascot. As a good luck charm, he always put his paw on the keyboard when we launched new products.
Jackda :
Alibaba: But Frenzy, doesn't Amazon have the same love for its employees which it displayed for its dog? There have been multiple instances of employees complaining.
David Swag :
D. E. Shaw: Jackda, I would like to counter here. Amazon was founded with a philosophy to serve customers. Hence it always prioritizes needs of the customers before needs of the employees.
Frenzy Bezos :
Wife: Also, every employee has to mandatorily spend two days at the customer service desk to understand firsthand what problems they face. This includes Deaf himself, too.
Sundar Parchai :
Google: Let's hope that this philosophy takes you a long way. With developing markets gradually getting bigger, there is great potential for both Amazon and Alibaba to service customers worldwide.
Jackda :
Alibaba: Thank you, Sundar.
Frenzy Bezos :
Wife: Thanks, it was good talking to you.
if you skip this now, you're probably skipping for life!