- In July, Amazon turned 25 and saw its market value (again) exceed $1 trillion.
- Getting its start in founder Jeff Bezos‘ Bellevue, Washington garage, the company has a market cap of nearly a trillion dollars.
- Here’s how Bezos started a company that survived the dot-com boom to define the world of online commerce.
- Visit Business Insider’s homepage for more stories.
With a market cap of over $1 trillion, Amazon is one of the most valuable brands in the world.
The story of how Amazon got there is one of single-minded focus.
Thanks to the leadership of founder and CEO Jeff Bezos, and a willingness to look totally out there to investors and customers alike, Amazon was able to weather the dot-com bubble burst and turn online shopping into a matter of habit for consumers all over the globe.
On July 5, Amazon celebrated its 25th birthday.
Here's how Amazon stopped at nothing to go from Jeff Bezos' garage to international mega-brand in 25 years.
Jeff Bezos, a huge "Star Trek" fan, had a love of technology from a young age. He would go on to major in computer science at Princeton before accepting a job with hedge fund D.E. Shaw, where he became a senior vice president after only four years.
Bezos got to play the role of a Starfleet official in the film "Star Trek Beyond" (2016).
Sources: Wired, Business Insider, CNBC
In 1994, Bezos read an article about how this newfangled "Internet" thing had grown 2,300% in just one year. Deciding that he'd regret missing out on the Dot-Com Boom if he didn't do something, he realized that tackling the bookstore market — then ruled by chains like Barnes & Noble — was his best way into creating an online store. The idea would fully form during a drive from Texas to Seattle.
Sources: Business Insider, CNBC, Wired, Forbes
Bezos kicked around a lot of names for the new bookstore: MakeItSo.com, based on Captain Picard's catchphrase in 'Star Trek: The Next Generation," was one. Another was "Cadabra," to evoke a sense of magic. In fact, the company was first registered as Cadabra in 1994. But the name got changed when people misheard it as "Cadaver."
Source: The Everything Store, New York Times, Business Insider, & Business Insider
Even before the company was incorporated, Bezos started talking to Shel Kaphan about Amazon. Kaphan was the company's first employee, and worked closely with Bezos during the company's early days.
Source: Business Insider
The name "Amazon" was eventually selected for a bunch of reasons: It shows up first in alphabetical order, it's one of the world's longest rivers, and it was "exotic and different," just like the young company wanted to be. Amazon got its start in Bezos' garage in Bellevue, Washington, right in Microsoft's backyard.
Source: Business Insider, Curbed, The Telegraph
Amazon.com finally launched in 1995. Most brick-and-mortar bookstores and even catalogues often only had 200,000 titles, but Amazon.com could offer more — a lot more.
https://twitter.com/OnlyInBOS/status/1147120441552703489?ref_src=twsrc%5Etfw
Sources: Business Insider, Entrepreneurial Marketing
The first book ever sold on Amazon.com was Douglas Hofstadter's "Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought," sold while the company was still based in Bezos' garage. Within two months, Amazon was doing $20,000 of sales every week. You can also see Amazon's first logo on the invoice here.
Sources: The Atlantic, Inc.
Amazon's early headquarters was in a modest building in Seattle. The office building located at 1516 Second Avenue was next to a wig parlor and "porno store."
Source: CNBC
Amazon's fast growth led it to go public less than two years later, on May 15th, 1997. Shares were initially priced as $18. If you had invested $100 in Amazon right after this IPO, you would have upwards of $120,000 today.
Source: CNET, Investopia
But after Amazon went public, the world got its first look at Bezos' business plan for the company. At the time, shareholders were really nervous about Bezos' plan to defer profitability for as many as five years while the company built up its infrastructure. In November of 1997, Amazon opened the first of its legendary warehouse fulfillment centers, in Delaware.
Sources: TechCrunch, Quartz
But Amazon's growth was unstoppable. In 1997, Jeff Bezos hand-delivered Amazon's one millionth order to a customer in Japan. He had purchased a biography of Princess Diana and a Microsoft Windows NT manual.
#TBT to 1997 when Jeff Bezos flew to Japan to deliver a package to Amazon's millionth customer. #AmazonPrime10 pic.twitter.com/LAK1naGCfI
— Amazon (@amazon) February 5, 2015
Source: Wired
In 1998, Amazon moved into a much bigger headquarters: Seattle's Pacific Medical Center building, now known as Pacific Tower.
In 1999, Time named Jeff Bezos "Person of the Year" for bringing online shopping to the masses. Just a year later, Amazon's competitors in online shopping started to go bust when the dot-com bubble burst.
📷 Cover of @Time’s Person of the Year from 2️⃣0️⃣ years ago. #tbt
📲 “It doesn’t matter to me whether we’re a pure internet player; what matters to me is to provide the best customer service… Internet, shm-internet” - @JeffBezos, in a 1999 interview on @amazon. (@CNBC) pic.twitter.com/ofAzJc21JS
— Nasdaq Exchange (@NasdaqExchange) February 28, 2019
Source: Time
By 2000, Amazon's transition from "bookstore" to "everything store" was well underway, with the online retailer selling music, movies, video games, home improvement supplies, and a little of everything else. To better reflect this shift, Amazon switched to the "Smile" logo that it still uses today. Note how it goes from A to Z.
Source: Mashable
Amazon bolstered its product selection even more in 2000 with the introduction of Amazon Marketplace, which let people (and small businesses) sell their used books directly to customers.
Source: Bloomberg
Amazon's growth was helped by some seriously savvy moves from Bezos and company. From 2001 to 2011, Target farmed out control of its website to Amazon, essentially ceding its online presence to its rival for ten years. And until June 2006, going to ToysRUs.com just brought you to Amazon's toy store section.
Source: GeekWire, Business Insider
Of course, there were some lemons, too. Bezos was personally very excited when Amazon became the leading online retailer of Segway personal transports, but they didn't exactly change the world.
Souce: Wall Street Journal
On the other hand, some ideas worked out really well. In 2001, the first version of Amazon Web Services was introduced, essentially letting software developers rent out servers from Amazon's massive, nondescript data centers to run their apps at high volumes. Amazon Web Services hit over $7 billion in revenue in the Q4 of 2018.
Sources: CNBC, The Guardian
In 2005, Amazon introduced Amazon Prime, its "All-You-Can-Eat" shipping plan where you pay a flat fee and get access to unlimited 2-day shipping for a year. When it first launched, it was $79 per year, but in 2018 it went up to $120 per year. Today, it includes streaming movies, music, and other perks.
Source: Washington Post, Amazon
In 2006, Amazon's online video service Unbox launched, complete with a Tivo partnership. Unbox would evolve into Amazon Instant Video, and then Amazon Prime Video. Amazon invested heavily in Instant Video with the 2010 launch of Amazon Studios, an original TV production studio. In 2015, the show "Transparent" became the first program from an online video service to win a Golden Globe for best series. In 2017, "Manchester by the Sea" was the first film from a streaming service to be nominated for Best Picture at the Academy Awards.
Source: Amazon, Vulture, Variety
Over the years, the "Harry Potter" books kept setting — and then breaking — Amazon's ordering records, as people turned to the online shop to make sure their copies arrived right on release day. In 2007, the final book, "Harry Potter and the Deathly Hallows," became the all-time Amazon bestseller.
Source: Amazon
In 2007, Amazon introduced the Kindle electronic book reader. It wasn't the first eBook reader by any means, but it was the first to become popular in the mainstream — Amazon's relationships with book publishers, plus built-in free cellular Internet service in the first versions of the device, meant that people could get books anywhere.
Sources: Wired, New York Times, The Register
In fact, 2007 saw Amazon build out a bunch of other new businesses, like MP3 music downloads and the AmazonFresh grocery service in Seattle.
In 2010, the growing Amazon started to move out from its Pacific Tower headquarters and into its urban campus in South Lake Union, Seattle urban campus — it basically feels like a city neighborhood, not an office.
A plaque near a door in the Day 1 building features a quote from Jeff Bezos:
"There's so much stuff that has yet to be invented. There's so much new that's going to happen. People don't have any idea yet how impactful the internet is going to be and that this is still Day 1 in such a big way."
Source: Curbed, The Guardian
In 2011, Amazon really doubled down on its hardware business with the launch of the Kindle Fire, which ran a custom version of Android called FireOS. At $199, it was the cheapest tablet around, turning it into a smash hit.
Sources: Hollywood Reporter, Lifewire
Over this period, Amazon just kept growing — so its approximately 50 warehouses nationwide had to push to meet the demand, which led to reports of inhospitable working conditions: workers had strict quotas to meet, and at one center, employees reportedly had to work in 114 degree heat.
Sources: GeekWire, Gawker, Business Insider
In 2012, Amazon bought a startup called Kiva Systems and used its technology to build robots to help manage the tremendous demand.
Source: PitchBook
In 2013, President Barack Obama chose to give an economic policy speech at one of Amazon's warehouse fulfillment centers, praising the company for providing jobs to middle-class workers.
Source: Business Insider
But Amazon has also come under scrutiny for its business practices, both in the warehouse and in the office.
In 2013 and 2014, Amazon warehouse union workers in Germany had a series of strikes to protest what they said were low wages.
In 2015, a New York Times report highlighted criticism from current and former Amazon employees regarding the company's intense workplace culture.
Amazon has also had some flops. In 2014, Amazon introduced the Fire Phone, its first-ever smartphone, trying to extend the popularity of the Kindle Fire tablets into a new market. But it was a famous flop, with Amazon soon clearing them out for a penny a pop.
But it might try again.
Source: Business Insider
In 2014, Amazon debuted its Echo smart speaker speaker, with its virtual assistant Alexa.
Source: Business Insider
In 2015, Amazon overtook Walmart to become the most valuable retailer in the world.
Source: Business Insider
Amazon opened its first brick-and-mortar bookstore in 2015 in Seattle.
Source: Business Insider
In June 2017, Amazon acquired the Whole Foods supermarket chain for $13.7 billion.
Source: Business Insider & Business Insider
Bezos hit the number one spot in the Forbes billionaire rankings as the richest person in the world for the first time in July 2017.
Source: Forbes
September 2017 marked the beginning of Amazon's controversial search for the so-called HQ2, a second headquarters for the retail giant.
Cities submitted extensive proposals - 238 total - to woo Amazon. In November 2018, the company selected two locations: Arlington, Virginia and New York City. In February 2019, Amazon pulled out of its New York City plans after pushback from local politicians. Still, Amazon plans to boost its New York office space footprint.
Source: New York Times, Wall Street Journal, Business Insider
In September 2018, Amazon briefly became the second-ever $1 trillion company, following Apple. Its stock price has since wobbled around that line.
Source: Business Insider
Amazon raised minimum wage for its workers to $15 per hour on November 1, 2018.
Source: Business Insider
Bezos announced his divorce from his wife of 25 years, MacKenzie Bezos, in January 2019.
— Jeff Bezos (@JeffBezos) January 9, 2019
Shortly after Bezos announced the divorce, the National Enquirer reported that the CEO had been having an affair with former news anchor Lauren Sanchez, and included leaked text messages between the two.
Ultimately, MacKenzie Bezos got to keep 25% of their stake in Amazon.
Source: Business Insider & Business Insider
Amazon turned 25 years old on July 5, 2019.
Twenty-five years is an impressive milestone, especially considering Amazon's humble origins. But according to Bezos, his company won't be eternal: "Amazon is not too big to fail ... In fact, I predict one day Amazon will fail."
Source: Business Insider
Amazon's market value rose above $1 trillion again on July 11, 2019.
Needless to say, Amazon is going strong, for now.
Source: CNBC