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Background


Education


After graduating from high school, Bezos decided to follow in the footsteps of Stephen Hawking and enroll in the physics program at Princeton University. He soon realized, however, that the subject was too difficult for him, so he switched to a double major in electronics and computer science. Then he discovered he excelled at creating software programs. In 1986, he graduated with highest honors and, earning degrees in electrical engineering and the still new field of computer science.

Career


Bezos turned down several job offers from large corporations and instead took a position with a newly formed fiber optic startup company, Fitel, helping the company build a computer network specifically for international finance. In 1988, he took a job developing systems for managing investment funds at Banker's Trust in New York City. After two years, he moved to the Wall Street investment firm of D. E. Shaw & Company as a computer specialist. And two years later, at age twenty-eight, he became Shaw's youngest ever vice president. Despite DE Shaw's protests, Bezos quitted to start Amazon. He couldn't get over the fact that the Internet was growing 2,400% per year. He decided he'd rather try and fail at a startup than never try at all.

Amazon


Bezos founded Amazon.com in July 1994 after making a cross-country drive from New York to Seattle, writing up the Amazon business plan on the way. He initially set up the company in his garage. He came up with the idea of a “everything store”. He drew up a list of 20 potential products he thought might sell well via the Internet, including software, CDs and books. After reviewing the list, books were the obvious choice, primarily because of the sheer number of titles in existence, low cost and universal demand.

MVP (July 1995)


In July 1995, Amazon.com opened its virtual doors, calling itself "Earth's Biggest Book Store," with more than 1 million titles to choose from.

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Customer Problem


When Amazon started the business, there were significant book distribution problems in the US. At that time, there were only 2 distributors in the entire country which limited the distribution and sale of books. Also, Jeff realized though there were huge number of titles in books available in print, even the largest superstores could stock only a few hundred thousand of them, a mere fraction of what is available, a "virtual" bookstore could offer millions of titles.

Customer Segment


The initial target customers were mostly friends and friends of friends of Bezos. Before the actual launch of the site, he sent an e-mail to all of his friends who had taken part in the test of the website telling them that Amazon.com would open for business in July and asking them to tell their friends as well. During the first month, they were able to reach customers in all 50 states of the US and in 45 countries who bought the books from Amazon.com.

Value Proposition


The initial value proposition was the chance of being able to buy books online from a large selection (one million titles) at prices that were lower than those charged by regular bookstores. Customers also add the opportunity to search their desired books by title, author, subject, publication date or keyword, and be notified when any book that they wanted became available or when their favourite author released a new title.

Customer Discovery


Jeff did not do much customer discovery. Only before the launch of website, he asked dozens of his friends, totalling as many as 300, to test the Amazon.com over several week, by having them use their web browsers to search for books on the website and pretend to buy them. Then after getting their feedback of the test and making sure that 98 percent of glitches/bugs are removed, he launched the site in July 1995.


MVP (April 1997)


By April 1997, Amazon was still calling itself the "Earth's Biggest Book Store," but customers had now more than 2.5 million titles to choose from.

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Customer Problem


The problem was still reasonably the same, being able to buy books that bricks and mortar bookstores were not carrying or were charging too much.

Customer Segment


The target customer was now avid book readers across the US and abroad.

Value Proposition


The value proposition was now more advanced, as it allowed customers to buy new books ("1.5 million books in print") as well as used books ("1 million out-of-print books").