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Brislen on Tech: the rise and rise of Amazon and Jeff Bezos

Paul Brislen, Editor. 05 February 2021, 3:14 pm
Brislen on Tech: the rise and rise of Amazon and Jeff Bezos

From A to Z - the rise and rise of Amazon and Jeff Bezos

It's one of the great success stories of the tech era: a start-up that began life as the underdog competing with giant retail outlets moved from selling digital copies of books to selling everything and so much more, yet Amazon is a tale of two halves and founder Jeff Bezos's legacy will be forever disdained and admired in equal parts.

The Amazon myth is the Jeff started the company in 1994 in his rented house in Washington state and grew it from there. Of course, as with most cool real estate-based success stories it does involve a loan from his parents - US$250,000 - and he wasn't exactly a newcomer to the marketplace. His degree from Princeton, his time working on Wall Street and his understanding of the IT industry all helped immensely but his sheer force of character and vision for what is, in hindsight at any rate, utterly obvious - that people will use the internet for shopping.

Fulfilment

In the 1990s this wasn't quite so obvious. Bezos stood out from the crowd of e-commerce (as we had to call it) start ups in the Dot Com bubble. This was the era that saw Napster, Ask Jeeves, GeoCities and many other seemingly giant companies launch and fail in short order. Household names of today weren't even alive then - Google, Facebook, YouTube and Twitter all came along later.

Even companies operating in the same retail space as Amazon came and went. Apparel company Boo.com launched with great fanfare, raised US$135 million in seed funding and blew the lot in 18 months. Webvan was started by one of the brains behind Borders bookshops and it offered home delivery of groceries in 1999, yet despite US$360 million in funding was dead in the water by 2001.

Locally we saw Flying Pig launch with the intention of taking over the New Zealand retail landscape to no avail, closely followed by Telecom's Ferrit - set up with the express purpose of taking the "busiest website in New Zealand" crown off TradeMe. It did not last the distance.

But Amazon did. It learned to cut its teeth selling books, then digital books, then electronic goods and today, pretty much any consumer item under the sun (including groceries) making it the world's largest online marketplace, and cloud computing platform by revenue, the largest Internet company in the world, the second largest private employer in the United States and one of the world's most valuable companies.

But wait, as they say in retail, there's more. Because along the way Amazon worked out that soon people would want to store all their digital goods online and that companies might want someone else to manage all their processing and data storage and Amazon Web Services (AWS) was born, and is still one of the largest cloud service providers in the world, beating out Microsoft and Google and proving that the guy selling the shovels from the company store will always make more money than those digging for gold.

And make money they have. Jeff Bezos is stepping down as CEO having amassed far more than US$175 billion in wealth, even after the world's most expensive divorce. He's handing the reins of the company (ostensibly at any rate) to Andy Jassy, the man who has built up AWS to a massive 30% market share and now will oversee daily operations while Bezos deals only with those once-in-a-lifetime decisions that will make the company rich enough to buy the planet.

But while the leadership team and Bezos in particular are singled out for having accrued vast wealth (unimaginable levels - equivalent to around US$350 million a day) the company itself is under fire for its appalling work practices at its warehouses, has had to pay NZ$85 million for stealing tips off delivery drivers, has taken over so much of the retail market that suppliers have sued Amazon (Toys R Us), and even complain of having the squeeze put on them, to the point of Amazon copying designs and selling knock-offs of products, as Kiwi shoe maker Allbirds found out the hard way.

When you tally that with refusing to pay tax as only a giant US tech company can, it's hard to feel good about Amazon's achievements or Bezos's grand vision. Despite his championing print media (he bought the Washington Post) or building a space empire (his company Blue Origin hopes to take passengers into orbit later this year) he has nearly a million employees who earn minimum wage and are subject to electronic monitoring and frequently report injuries and even death in the workplace. COVID has been particularly brutal as the company received a massive influx of orders from people forced to stay home and staff refused to come in to work. There's no sign of Bezos paying to vaccinate his staff even though the cost would presumably be minimal to someone with that net worth and would, arguably, encourage staff back to work during a pandemic.

This is the crux of the great debate of our times. On one hand we have digital giants who bring disruption to traditional modes of work and who have made their owners very wealthy indeed. Yet at the same time these companies flout the rules and laws that are designed to help protect employees, suppliers and customers (not to mention the wider citizenry through taxation) and many seem hell bent on rolling back protections to a bygone era where workers were no better than serfs.

Time will tell how much of this ethos the new CEO buys into, and indeed whether the regulators around the world continue to turn a blind eye to abuse of monopoly position or copyright infringements among other issues, but whatever comes of it all it's safe to say Amazon has changed the way we do business for ever.


Comments

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Noel Reid 05 February 2021, 6:09 pm

Hi Paul

I think I'm aligned with your diplomatic comments.

I remember when Jeff B was just starting out, and playing various chasing games etc with his staff. At that stage he seemed to be close to the people who were working with/for him.

Paying so many people the minimum wage, and seeking concessions from States willing to locate his warehouses seems outrageous in an NZ context, esp from such a rich man..


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