September 17, 2024, 7:59 am | Read time: 6 minutes
With Amazon, Jeff Bezos has created one of the largest sales platforms in the world – partly because he recognized the opportunities of online retail early on. But his intuition does not stop there.
Born in 1964, Jeff Bezos demonstrated an early aptitude for technology and finance. Before founding today’s global corporation Amazon in 1994, he worked at the Taiwanese mobile phone company FITEL, the New York asset management company Bankers Trust, and D. E. Shaw & Co. Originally, Amazon was an online bookstore. It also received the odd, funny order in the early years, which Bezos still remembers with a laugh today.
The development of Amazon from a book business to one of the largest online sales platforms shows Bezos’ business acumen and good instincts. He already had big plans for the fledgling company in the 1990s. In an interview with talk show host Charlie Rose in 1999, he spoke about his vision and the future of e-commerce. BusinessInsider has summarized the predictions Bezos made back then. But how accurate were they? TECHBOOK evaluates the predictions below.
Overview
1. Amazon will be the first port of call for online shoppers
“We want to try to build a place where people can find and discover anything they might want to buy online” – a quote from Bezos’ Charlie Rose’s 1999 talk show appearance. This vision has become a reality, with many online shoppers using Amazon as their first port of call – even before searching for an item on Google or other platforms. At least, this is what a survey conducted by US news channel NPR in 2018 found.
In fact, according to Statista, Amazon has a market share of almost 40 percent in North America (as of September 2020). Amazon is also the largest provider of the European market, with a 9.8 percent share. Worldwide, the company can claim 9.2 percent. According to data from Statista, Amazon was only behind Taobao and Tmall, both of which belong to the Chinese Alibaba Group, in the ranking of the most popular online marketplaces in 2022. In a survey, a whopping 79% of respondents in Germany stated that they had shopped on Amazon in the past 12 months. Amazon was, therefore, the most popular online store in Germany, ahead of eBay and Otto. The survey covered the period from July 2022 to June 2023.
2. Smart home is the future
“I’m a fan of the idea of some kind of household appliances, that there are lots of little things that are connected to the internet […] There will be a bunch of things that are somehow connected to the network.” Also, in the Charlie Rose interview, Jeff Bezos predicted the smart home. Amazon itself has followed this vision with its smart Echo devices, which cover more and more household appliances. The company now offers not only speakers but also displays, power plugs, and door locks. Amazon has even equipped cars, microwaves, glasses, and headphones with the Alexa voice assistant.
3. Amazon will sell more than just books
Before the turn of the century, it was not foreseeable that Amazon would become the online sales platform it is now. In 1999, the company was still competing directly with the US bookstore chain Barnes & Noble.
However, in a 1999 portrait article, Bezos told Wired magazine at the time: “I bet they [Barnes & Noble] don’t see us as a direct competitor a year from now. They certainly do now, but we’re on different paths […] We’re trying to invent the future of online retail, and they’re just defending their territory.”
More than 20 years later, it is clear that Bezos was right. While Amazon has risen to become the largest e-commerce company in the world, Barnes & Noble has remained primarily a bookseller with physical stores. Amazon has also outplayed Barnes & Noble in the eBook market, with Kindle e-readers selling significantly better than Barnes & Noble’s “Nook.”
Wired also reported on Bezos’ vision to expand Amazon into an online store for “everything” by 2020. According to this, Bezos wants people to buy basic foodstuffs, paper products, cleaning products, and the like online – instead of in stores.
Amazon has not been able to establish itself as the primary provider of household products. However, the COVID-19 pandemic, in particular, has given Amazon a major boost in this area. The company is also trying to establish itself in the growing food delivery market by purchasing the Whole Foods supermarket chain and expanding Amazon Fresh.
4. Targeted advertising is the future
Today, personalized advertising is ubiquitous on the Internet. A large part of the business model of companies such as Facebook and Google is based on recognizing the interests of users. This enables other companies to display more relevant advertising in a targeted manner.
Bezos said in 1999: “Advertising is also a valid model on the web. They will be able to make their advertising more relevant to their customers by targeting their advertising. Something that is difficult to do with television.”
Amazon is now at the forefront of the world’s major advertising companies, as the Wall Street Journal reports. With a market share of just under 10 percent, it is only behind Google and Facebook.
5. Computers will only have a short boot time
“There’s nothing more frustrating than waiting two minutes for your computer to boot […] So I think this is an important technology. And people are working on it. It will happen eventually.”
In 1999, at the time of the interview with Charlie Rose, Microsoft Windows 98 and Mac OS 9 were fresh on the market. Back then, you could just make yourself a cup of coffee or a sandwich during the boot process. But even back then, Bezos was convinced that computers would soon have an instant-on function and would, therefore, be ready for use as soon as they were switched on.
Computers took a while before this function actually became a reality. It was only with flash memory in the form of SSDs and newer operating systems that instant-on really became established around 2010. But before that, smartphones had already demonstrated how instant wake-up could work. Today, waiting another two minutes after pressing the power button for a device to be ready for use is practically unthinkable.
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Bezos no longer CEO of Amazon
Jeff Bezos is no longer the head of Amazon. The entrepreneur and founder relinquished his role as CEO in the fall of 2021. His position has now been filled by Andy Jassy, who has been responsible for the management and development of Amazon since then. However, Bezos remains the most important individual investor, holding 64,588,418 shares and a 12.7 percent stake in Amazon as of September 2023. With an estimated fortune of 152.6 billion US dollars, Bezos is now the third richest person in the world. Only Bernard Arnault (through luxury brands such as Moët Hennessy Louis Vuitton and Dior) and Elon Musk are richer.