As you've probably heard, Jeff Bezos made headlines recently as it was reported that he added a record $13 billion to his fortune in a single day.

In 1997, Bezos signed off his first annual letter to shareholders, and the contents of this letter are truly stunning. Here are the main highlights…

He begins:

“To our shareholders, Amazon. com passed many milestones in 1997: by year-end, we had served more than 1.5 million customers, yielding 838% revenue growth to $147.8 million, and extended our market leadership despite aggressive competitive entry.

He continues:

“But this is Day 1 for the Internet and, if we execute well, for Amazon. com.

Today, online commerce saves customers money and precious time. Tomorrow, through personalisation, online commerce will accelerate the very process of discovery.”

“We believe that a fundamental measure of our success will be the shareholder value created over the long term.

This value will be a direct result of our ability to extend and solidify our current market leadership position.”

“Because of our emphasis on the long term, we make decisions and weight trade-offs differently than some companies…

We will continue to focus relentlessly on our customers.”

Bezos then details this obsession with customers:

“From the beginning, our focus has been on offering our customers compelling value.

We realised that the Web was, and still is, the World Wide Wait.

Therefore, we set out to offer customers something they simply could not get any other way, and began serving them with books.

We brought them much more selection than was possible in a physical store, and presented it in a useful, easy-to-search, and easy-to-browse format in a store open 365 days a year, 24 hours a day.

We maintained a dogged focus on improving the shopping experience, and in 1997 substantially enhanced our store.

We now offer customers gift certificates, 1 click shopping, and vastly more reviews, content and browsing options, and recommendation features.

We dramatically lowered prices, further increasing customer value.

Repeat purchases and word of mouth have combined to make Amazon. com the market leader in online book-selling.”

Overall, this is a classic case of he did it best.

He is notoriously hard on his workers and obsessive about logistics, possibly the most important aspect of eCommerce.

He gets his products to people quicker and more reliably, and he was one of the first eCommerce sites to start selling “everything” and become an online Walmart.

He is simply not a complacent person, could have stopped there but took it a step further with his suite of B2B products like AWS.

Many overlook the fact that he started Amazon at the age of 30.

Before this, he worked on Wall Street at the hedge fund D.E Shaw.

He had worked himself up to senior vice president, one of only four at the firm.

In 1994, Bezos was put in charge of exploring new business opportunities in the burgeoning world of the Internet.

It was while brainstorming ideas in the then-unfamiliar area of electronic commerce that Bezos came to his deceptively simple conclusion: the most logical thing to sell over the Internet was books, largely because two of the country's largest book distributors already had exhaustive electronic lists.

The rest…is history.

Skeptics say “Hey this is how it really works”

  1. Let other people list items on your website

  2. Take data on how well other people's stuff is selling and for what prices

  3. List the items yourself at a lower price until the third parties that you mined the data from are out of business.

  4. Raise price

  5. Vertically integrate to control more and more of the supply chain.

Well, sort of…

Quite simply, Amazon was positioned well to take advantage of the immense shift in lifestyle from 2000-2020.

This is the same reason why many other tech companies have shot up in value – people WANT to consume.

They have fulfilled the vision that Bezos outlined in 1997 and provided these customers with world class service to meet their demand.

Moreover, most of Amazon's profit is from AWS anyway!

There's a lot of criticism at the moment regarding his soaring net worth, however context is important.

Should he pay more taxes? Perhaps.

Is there an element of luck involved? Sure.

But is he a genius who has executed extremely well for decades? Absolutely.

After all, he hasn't derived his net worth from funding both sides of a war or via other illicit means…

Despite what the Forbes List says, he is not the richest person in the world – the Saudis and the Rothschilds are already trillionaires and Putin is probably one too.

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