{"id":19885,"date":"2018-03-28T08:30:21","date_gmt":"2018-03-28T12:30:21","guid":{"rendered":"http:\/\/www.l-a-k-e.org\/blog\/?p=19885"},"modified":"2018-03-28T08:33:58","modified_gmt":"2018-03-28T12:33:58","slug":"why-bezos-started-amazon","status":"publish","type":"post","link":"http:\/\/www.l-a-k-e.org\/blog\/2018\/03\/why-bezos-started-amazon.html","title":{"rendered":"Why Bezos started Amazon"},"content":{"rendered":"

\r\nJeff Bezos sent his biographer to find the graphs; that’s when I learned about this.\r\n\r\nThe Everything Store: Jeff Bezos and the Age of Amazon<\/a>,\r\nPaperback, August 12, 2014, by Brad Stone\r\n(PDF<\/a>,\r\ngoogle book<\/a>)\r\n

\r\n

\r\nIntrigued by Shaw’s conviction about the inevitable importance of\r\nthe Internet, Bezos started researching its growth. A Texas-based\r\nauthor and publisher named John Quarterman had recently started the\r\nMatrix News<\/em>, a monthly newsletter extolling the Internet and\r\ndiscussing its commercial possibilities. One set of numbers in\r\nparticular in the February 1994 edition of the newsletter was\r\nstartling. For the first time, Quarterman broke down the growth of\r\nthe year-old World Wide Web and pointed out that its simple,\r\nfriendly interface appealed to a far broader audience than other\r\nInternet technologies. In one chart, he showed that the number of\r\nbytes—a set of binary digits —transmitted over the Web\r\nhad increased by a factor of 2,057 between January 1993 and January\r\n1994.\r\n

\r\n\r\n<\/a>\r\n
\r\n\r\nInternet Resource Discovery Services by Bytes<\/a>,\r\nJohn S. Quarterman, Matrix News 4.2, MIDS, February 1994.\r\n<\/p>\r\n

Another graphic showed\r\n\r\n the number of packets—a single\r\nunit of data—sent over the Web had jumped by 2,560 in the same\r\nspan.8<\/a><\/sup><\/small>\r\n<\/p>\r\n

\r\n\r\n<\/a>\r\n
\r\n\r\nInternet Resource Discovery Services by Packets<\/a>,\r\nJohn S. Quarterman, Matrix News 4.2, MIDS, February 1994.\r\n<\/p>\r\n

\r\nBezos interpolated from this that Web activity overall had gone up\r\nthat year by a factor of roughly 2,300—a 230,000 percent\r\nincrease. “Things just don’t grow that fast,” Bezos\r\nlater said. “It’s highly unusual, and that started me\r\nthinking, What kind of business plan might make sense in the context\r\nof that growth?”9<\/a><\/sup><\/small>\r\n(Bezos also liked to say in speeches\r\nduring Amazon’s early years that it was the Web’s “2,300\r\npercent” annual growth rate that jolted him out of\r\ncomplacency. Which makes for an interesting historical footnote:\r\nAmazon began with a math error.)\r\n<\/p>\r\n

8<\/a><\/sup><\/small> John Quarterman, Matrix News.\r\n

9<\/a><\/sup><\/small> Jeff Bezos interview, Academy of Achievement, May 4, 2001.\r\n<\/blockquote>\r\n

\r\nI’m also notoriously bad at computing percentages.\r\n

\r\nNote this part:\r\n“Matrix News<\/em>, a monthly newsletter extolling the Internet and\r\ndiscussing its commercial possibilities.”\r\nIndeed, we were producing that newsletter (the first one ever distributed\r\nprimarily over the Internet) to promote growth and commercialization\r\nof the Internet, because it had become clear that the potential was\r\nlarger than governments could support alone.\r\nI had also been peripherally involved in the beginnings of the first\r\ntwo commercial Internet Service Providers (ISPs).\r\n

\r\nAlthough we knew many movers and shakers were subscribers, I don’t recall Bezos\r\namong those names, and the newsletter was passed around quite a bit.\r\nSo it was only a decade later that I learned that in our goal of\r\npromoting the economic possibilities of the Internet we had succeeded\r\nbeyond our wildest dreams.\r\n

\r\nHere’s a bit of irony:\r\n

\r\n

\r\nBezos concluded that a true everything store would be\r\nimpractical—at least at the beginning. He made a list of\r\ntwenty possible product categories, including computer software,\r\noffice supplies, apparel, and music. The category that eventually\r\njumped out at him as the best option was books. They were pure\r\ncommodities; a copy of a book in one store was identical to the same\r\nbook carried in another, so buyers always knew what they were\r\ngetting. There were two primary distributors of books at that time,\r\nIngram and Baker and Taylor, so a new retailer wouldn’t have to\r\napproach each of the thousands of book publishers individually. And,\r\nmost important, there were three million books in print worldwide,\r\nfar more than a Barnes & Noble or a Borders superstore could\r\never stock.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nAround that same time a few of us were discussing how to turn some\r\nof this research into a startup company.\r\nOne idea proposed was drop-shipping books.\r\nI shot that down as being too specialized and too few people would want it.\r\nWell, you have to hand it to Bezos for seeing there was a market.\r\n

\r\nAnd according to Bezos, it was Matrix News<\/em> that showed him\r\nthe world wide web on the Internet was the way to reach that market.\r\n

\r\nBezos was wrong about this part:\r\n“Things just don’t grow that fast.”\r\nWell, the Internet itself did, back in 1987 and 1988,\r\nas a number of factors came together (I’ve written about that elsewhere).\r\nInternet growth, and later world wide web growth,\r\nsettled down to more steady exponential growth;\r\nsee\r\n\r\nA Naive Projection of the Growth of the Internet<\/a>.\r\nSince then we’ve seen mobile phones and even faster smart phones go from first appearing ten years ago to most people have one in their pocket.\r\n

\r\nAnd U.S. solar power\r\n\r\ncontinues to double every two years<\/a>,\r\nwith similar exponential growth rates in the rest of the world.\r\n\r\nSolar power will win like the Internet did<\/a>.\r\n

\r\n -jsq\r\n<\/p>\r\n

Investigative reporting costs money, for open records requests, copying, web hosting, gasoline, and cameras, and with sufficient funds we can pay students to do further research. You can donate to LAKE today<\/a>!<\/p>\r\n","protected":false},"excerpt":{"rendered":"Jeff Bezos sent his biographer to find the graphs; that’s when I learned about this. The Everything Store: Jeff Bezos and the Age of Amazon, Paperback, August 12, 2014, by Brad Stone (PDF, google book) Intrigued by Shaw’s conviction about the inevitable importance of the Internet, Bezos started researching its growth. A Texas-based author and […]","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_links_to":"","_links_to_target":""},"categories":[132,24],"tags":[2397,8853,8701,788,507,8741,1058,2498,8702,12,7,10233,25,8713,8714,6,10231,10232],"class_list":["post-19885","post","type-post","status-publish","format-standard","hentry","category-internet-access-speed","category-solar","tag-amazon","tag-books","tag-georgia","tag-growth","tag-internet","tag-internet-access-speed","tag-jeff-bezos","tag-jon-wellinghoff","tag-lake","tag-lowndes-area-knowledge-exchange","tag-lowndes-county","tag-matrix-news","tag-moores-law","tag-renewable-energy","tag-solar","tag-valdosta","tag-world-wide-web","tag-www"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p585fK-5aJ","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts\/19885","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/comments?post=19885"}],"version-history":[{"count":3,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts\/19885\/revisions"}],"predecessor-version":[{"id":19888,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts\/19885\/revisions\/19888"}],"wp:attachment":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/media?parent=19885"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/categories?post=19885"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/tags?post=19885"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}