The Amazing Mr. Bezos
October 13, 2013 4 Comments
Within Amazon. com there’s a certain type of e-mail that elicits waves of panic. It usually originates with an annoyed customer who complains to the company’s founder and CEO. Jeff Bezos has a public e-mail address, firstname.lastname@example.org. Not only does he read many customer complaints, he forwards them to the relevant Amazon employees, with a one-character addition: a question mark. When Amazon employees get a Bezos question mark e-mail, they react as though they’ve discovered a ticking bomb. They’ve typically got a few hours to solve whatever issue the CEO has flagged and prepare a thorough explanation for how it occurred, a response that will be reviewed by a succession of managers before the answer is presented to Bezos himself. Such escalations, as these e-mails are known, are Bezos’s way of ensuring that the customer’s voice is constantly heard inside the company.
One of the more memorable escalations occurred in late 2010. It had come to Bezos’s attention that customers who had browsed the lubricants section of Amazon’s sexual wellness category were receiving personalized e-mails pitching a variety of gels and other intimacy facilitators. When the e-mail marketing team received the question mark, they knew the topic was delicate and nervously put together an explanation. Amazon’s direct marketing tool was decentralized, and category managers could generate e-mail campaigns to customers who had looked at certain product categories but did not make purchases. The promotions tended to work; they were responsible for hundreds of millions of dollars in Amazon’s annual sales. In the matter of the lubricant e-mail, though, a low-level product manager had overstepped the bounds of propriety. But the marketing team never got the chance to send this explanation. Bezos demanded to meet in person.
At Amazon’s Seattle headquarters, Jeff Wilke, the senior vice president for North American retail, Doug Herrington, the vice president for consumables, and Steven Shure, the vice president for worldwide marketing, waited in a conference room until Bezos glided in briskly. He started the meeting with his customary, “Hello, everybody,” and followed with “So, Steve Shure is sending out e-mails about lubricants.” Bezos likes to say that when he’s angry, “just wait five minutes,” and the mood will pass like a tropical squall. Not this time. He remained standing. He locked eyes with Shure, whose division oversaw e-mail marketing. “I want you to shut down the channel,” he said. “We can build a $100 billion company without sending out a single f—— e-mail.” An animated argument followed. Amazon’s culture is notoriously confrontational, and it begins with Bezos, who believes that truth shakes out when ideas and perspectives are banged against each other. Wilke and his colleagues argued that lubricants were available in supermarkets and drugstores and were not that embarrassing. They also pointed out that Amazon generated a significant volume of sales with such e-mails. Bezos didn’t care; no amount of revenue was worth jeopardizing customer trust. “Who in this room needs to get up and shut down the channel?” he snapped. Eventually, they compromised. E-mail marketing would be terminated for certain categories such as health and personal care. The company also decided to build a central filtering tool to ensure that category managers could no longer promote sensitive products, so matters of etiquette were not subject to personal taste. For books and electronics and everything else Amazon sold, e-mail marketing lived to fight another day.
Amazon employees live daily with these kinds of fire drills. “Why are entire teams required to drop everything on a dime to respond to a question mark escalation?” an employee once asked at the company’s biannual meeting held at Seattle’s Key Arena, a basketball coliseum with more than 17,000 seats. “Every anecdote from a customer matters,” Wilke replied. “We research each of them because they tell us something about our processes. It’s an audit that is done for us by our customers. We treat them as precious sources of information.” It’s one of the contradictions of life inside Amazon: The company relies on metrics to make almost every important decision, such as what features to introduce or kill, or whether a new process will root out an inefficiency in its fulfillment centers. Yet random customer anecdotes, the opposite of cold, hard data, can also alter Amazon’s course.
It’s easy to forget that until recently, people thought of Amazon primarily as an online bookseller. Today, as it nears its 20th anniversary, it’s the Everything Store, a company with around $75 billion in annual revenue, a $140 billion market value, and few if any discernible limits to its growth. In the past few months alone, it launched a marketplace in India, opened a website to sell high-end art, introduced another Kindle reading device and three tablet computers, made plans to announce a set-top box for televisions, and funded the pilot episodes of more than a dozen TV shows. Amazon’s marketplace hosts the storefronts of countless smaller retailers; Amazon Web Services handles the computer infrastructure of thousands of technology companies, universities, and government agencies.
Bezos, 49, has a boundless faith in the transformative power of technology. He constantly reinvests Amazon’s profits to improve his existing businesses and explore new ones, often to the consternation of shareholders. He surprised the world in August when he personally bought the Washington Post newspaper, saying his blend of optimism, innovation, and long-term orientation could revive it. One day a week, he moonlights as the head of Blue Origin, his private rocket ship company, which is trying to lower the cost of space travel.
Amazon has a few well-known peculiarities—the desks are repurposed doors; meetings begin with everyone in the room sitting in silence as they read a six-page document called a narrative. It’s a famously demanding place to work. And yet just how the company works—and what Bezos is like as a person—is difficult to know. Bezos rarely speaks at conferences and gives interviews only to publicize new products, such as the latest Kindle Fire. He declined to comment on this account, saying that it’s “too early” for a reflective look at Amazon’s history, though he approved many interviews with friends, family, and senior Amazon executives. John Doerr, the venture capitalist who backed Amazon early and was on its board of directors for a decade, calls Amazon’s Berlin Wall approach to public relations “the Bezos Theory of Communicating.” It’s really just a disciplined form of editing. Bezos takes a red pen to press releases, product descriptions, speeches, and shareholder letters, crossing out anything that doesn’t convey a simple message: You won’t find a cheaper, friendlier place to get everything you need than Amazon.
The one unguarded thing about Bezos is his laugh—a pulsing, mirthful bray that he leans into while craning his neck back. He unleashes it often, even when nothing is obviously funny to anyone else. And it startles people. “You can’t misunderstand it,” says Rick Dalzell, Amazon’s former chief information officer, who says Bezos often wields his laugh when others fail to meet his lofty standards. “It’s disarming and punishing. He’s punishing you.” Intensity is hardly rare among technology CEOs. Steve Jobs was as famous for his volatility with Apple subordinates as he was for the clarity of his insights about customers. He fired employees in the elevator and screamed at underperforming executives. Bill Gates used to throw epic tantrums at Microsoft; Steve Ballmer, his successor, had a propensity for throwing chairs. Andy Grove, the former CEO of Intel, was so harsh and intimidating that a subordinate once fainted during a performance review. Bezos fits comfortably into this mold. His drive and boldness trumps other leadership ideals, such as consensus building and promoting civility. While he can be charming and capable of great humor in public, in private he explodes into what some of his underlings call nutters. A colleague failing to meet Bezos’s exacting standards will set off a nutter. If an employee does not have the right answers or tries to bluff, or takes credit for someone else’s work, or exhibits a whiff of internal politics, uncertainty, or frailty in the heat of battle—a blood vessel in Bezos’s forehead bulges and his filter falls away. He’s capable of hyperbole and harshness in these moments and over the years has delivered some devastating rebukes. Among his greatest hits, collected and relayed by Amazon veterans:
“Are you lazy or just incompetent?”
“I’m sorry, did I take my stupid pills today?”
“Do I need to go down and get the certificate that says I’m CEO of the company to get you to stop challenging me on this?”
“Are you trying to take credit for something you had nothing to do with?”
“If I hear that idea again, I’m gonna have to kill myself.”
“We need to apply some human intelligence to this problem.”
Some Amazon employees advance the theory that Bezos, like Jobs, Gates, and Oracle co-founder Larry Ellison, lacks empathy. As a result, he treats workers as expendable resources without taking into account their contributions. That in turn allows him to coldly allocate capital and manpower and make hyper rational business decisions, where another executive might let emotion and personal relationships figure into the equation. They also acknowledge that Bezos is primarily consumed with improving the performance and customer service and that personnel issues are secondary. “This is not somebody who takes pleasure at tearing someone a new a–hole,” says Kim Rachmeler, an executive who worked at Amazon for more than a decade. “He is not that kind of person. Jeff doesn’t tolerate stupidity, even accidental stupidity.”
Amazon has a clandestine group with a name worthy of a James Bond film: Competitive Intelligence. The team, which operated for years within the finance department under longtime executives Tim Stone and Jason Warnick, focuses in part on buying large volumes of merchandise from other online retailers and measuring the quality and speed of their services—how easy it is to buy, how fast the shipping is, and so forth. The mandate is to investigate whether any rival is doing a better job than Amazon and then present the data to a committee of Bezos and other senior executives, who ensure that the company addresses any emerging threat.
The company, aided by the appeal of its steadily increasing stock price, is an accomplished recruiter of talent. In its second quarter earnings report in July, Amazon said its ranks had swelled to 97,000 full-time and part-time employees, up 40% from the year before. New hires are given an industry-average base salary, a signing bonus spread over two years, and a grant of restricted stock units spread over four years. Employees typically get 5% of their shares at the end of their first year, 15% their second year, and then 20% every six months over the final two years. There are few perks or unexpected performance bonuses at Amazon, though the company is more generous than it was the 1990s, when Bezos refused to give employees city bus passes because he didn’t want to give them any reason to rush out of the office to catch the last bus of the day. Employees now get cards that entitle them to free rides on Seattle’s regional transit system. Parking at the company’s offices in South Lake Union costs $220 a month, and Amazon reimburses employees—for $180. Conference room tables are a collection of blond wood door-desks shoved together side by side. The vending machines take credit cards, and food in the company cafeterias is not subsidized. New hires get a backpack with a power adapter, a laptop dock, and orientation materials. When they resign, they’re asked to hand in all that equipment—including the backpack.
For a brief period early in his life, before this ordinary if peripatetic childhood, Bezos lived alone with his mother and grandparents. And before that, he lived with his mother and his biological father, a man named Ted Jorgensen. Bezos has said the only time he thinks about Jorgensen is when he’s filling out a medical form that asks for his family history. He told Wired in 1999 that he’d never met the man. Strictly speaking, that’s not true: Bezos last saw him when he was 3 years old. And while Bezos’s professional life has been closely studied and celebrated over the last two decades, this story has never been told. Jorgensen was a circus performer and one of Albuquerque’s best unicyclists in the 1960s. A newspaper picture taken in 1961, when he was 16, shows him standing on the pedals of his unicycle facing backward, one hand on the seat, the other splayed theatrically to the side. The caption says he was awarded “most versatile rider” in the local unicycle club. In high school, Jorgensen started dating Jacklyn Gise, a girl two years his junior whose father also worked at Sandia Base. Their dads knew each other. Her father, Lawrence Preston Gise, known to friends as Preston and to his family as Pop, ran the local office of the U.S. Atomic Energy Commission, the federal agency that managed the nuclear weapons program after Harry S Truman took it from the military following World War II. Jorgensen was 18 and finishing his senior year in high school when Gise became pregnant. She was a sophomore. They were in love and decided to get married. Her parents gave them money to fly to Juárez, Mexico, for a ceremony. A few months later, on July 19, 1963, they repeated their vows at the Gises’ house. Because she was underage, both of their mothers signed the application for a marriage license. The baby was born on Jan. 12, 1964. They named him Jeffrey Preston Jorgensen. The new parents rented an apartment in Albuquerque’s Southeast Heights neighborhood. Jackie finished high school, and during the day, her mother, Mattie, took care of the baby. Life was difficult. Jorgensen was perpetually broke, and they had only one car, his cream-colored ’55 Chevy. Belonging to a unicycle troupe didn’t pay much. The Wranglers divided their fees among all members, with Smith taking a generous cut off the top. Eventually, Jorgensen got a $1.25-an-hour job at the Globe Department Store. Occasionally Jackie brought the baby to the store to visit. I found Ted Jorgensen, Jeff Bezos’s biological father, behind the counter of his bike shop in late 2012. I’d considered a number of ways he might react to my unannounced appearance but gave a very low probability to the likelihood of what actually happened: He had no idea what I was talking about. Jorgensen said he didn’t know who Jeff Bezos was and was baffled by my suggestion that he was the father of this famous CEO. I mentioned Jacklyn Gise and Jeffrey, the son they had during their brief teenage marriage. The old man’s face flushed with recognition. “Is he still alive?” he asked, not yet fully comprehending. “Your son is one of the most successful men on the planet,” I told him. I showed him some Internet photographs on my smartphone, and for the first time in 45 years, Jorgensen saw his biological son. His eyes filled with sorrow and disbelief.
-By Brad Stone