The Everything Store: Jeff Bezos and the Age of Amazon

Overview

The award-winning bestseller: "Stone's book, at last, gives us a Jeff Bezos biography that can fit proudly on a shelf next to the best chronicles of America's other landmark capitalists." -- Forbes

Amazon.com's visionary founder, Jeff Bezos, wasn't content with being a bookseller. He wanted Amazon to become the everything store, offering limitless selection and seductive convenience at disruptively low prices. To do so, he developed a corporate...

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The Everything Store: Jeff Bezos and the Age of Amazon

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Overview

The award-winning bestseller: "Stone's book, at last, gives us a Jeff Bezos biography that can fit proudly on a shelf next to the best chronicles of America's other landmark capitalists." -- Forbes

Amazon.com's visionary founder, Jeff Bezos, wasn't content with being a bookseller. He wanted Amazon to become the everything store, offering limitless selection and seductive convenience at disruptively low prices. To do so, he developed a corporate culture of relentless ambition and secrecy that's never been cracked. Until now.

Brad Stone enjoyed unprecedented access to current and former Amazon employees and Bezos family members, and his book is the first in-depth, fly-on-the-wall account of life at Amazon. THE EVERYTHING STORE is the book the business world can't stop talking about, the revealing, definitive biography of the company that placed one of the first and largest bets on the Internet and forever changed the way we shop and read.

Winner of the 2013 FT Goldman Sachs Business Book of the Year Award

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Editorial Reviews

From the Publisher
"As fine a profile of a secretive, fast-growing company as you are likely to encounter." -- Michael Moritz, Chairman, Sequoia Capital, LinkedIn.com
The New York Times - Michiko Kakutani
…absorbing…Mr. Stone…tells this story of disruptive innovation with authority and verve, and lots of well-informed reporting.
—The New York Times
The New York Times Book Review - Duff McDonald
…[an] engrossing chronicle of the rise of Jeff Bezos and Amazon…Some of his achievements are awesomely complicated…But Stone's long tenure covering both Bezos and Amazon (first at Newsweek, then at The New York Times and now at Bloomberg Businessweek) gives his retelling a sureness that keeps the story moving swiftly, even in passages where Amazon's ever-present (and apparently intentional) internal chaos threatens to spill out onto the pages of the book itself.
Publishers Weekly
10/21/2013
Another ruthless e-mogul bestrides the world in this lively study of the Amazon founder and his quest to sell books and all other conceivable merchandise over the Web. While he doesn't have quite the rabid nuttiness of a Steve Jobs, Bezos in this portrait is cut from the same cloth: a vicious and occasionally unfair competitor; a penny-pinching slave driver of a workforce divided into unhappy employees and super loyalists; and a man full of messianic zeal about the consumer conveniences flowing from the world of e-commerce, brimming with bold initiatives that only sometimes pay off, who largely delivers on his promises to cut costs and increase consumer choice, without registering how profoundly his actions are altering the Republic of Letters and society at large. Stone, a senior writer for Bloomberg Businessweek, explores Amazon's technology breakthroughs with its Kindle e-reader and cloud-computing initiatives, but mainly tells a surprisingly traditional story about monopolistic retail, hinging on price wars over diapers, disputes with toy suppliers, carefully cultivated economies of scale, and the nuts and bolts of getting goods into customers' hands (the book's detailed account of Amazon's maddeningly complex distribution and shipping operations is engrossing). Stone's vivid profiles and lucid analyses of business dynamics make for an entertaining, insightful, behind-the-scenes account of the e-commerce revolution. Photos. (Oct.)
Library Journal
Currently a senior writer for Bloomberg Businessweek who has been covering Amazon and, more broadly, Silicon Valley technology for 15 years, Stone gives a corporate history of Amazon. With a 100,000-copy first printing.
Kirkus Reviews
2013-10-30
Fair-minded, virtually up-to-the-minute history of the retail and technology behemoth and the prodigious brain behind it. Bloomberg Businessweek journalist Stone has covered Amazon, "the company that was among the first to see the boundless promise of the Internet and that ended up forever changing the way we shop and read," and its founder and CEO, Jeff Bezos, among other technology stories, for 15 years, and his inside knowledge of a company ordinarily stingy with information is evident throughout the book. In addition to speaking to Bezos several times over the years, including an interview for this book, Stone also spoke with employees across all levels of the company, from C-level officers and software developers to fulfillment center "associates," including many who have moved on. The author's research, which also included access to volumes of emails and other internal documents, revealed an extraordinarily difficult corporate culture for ordinary human beings to work in, one designed to forge (but not necessarily reward) people able to think like Bezos. The ultimate objective of this culture was to create the illusion for the consumer of a frictionless shopping experience, originally for books but ultimately for every product imaginable. The patented one-click shopping button, which enabled online customers to order, pay for and have shipped any item with a single click of the mouse, was the apotheosis of Amazon's consumer-oriented ethos. But this illusion required an enormous amount of friction behind the scenes. Bezos, a billionaire several times over whose ultimate dream is to blast himself into space from a launch pad he's building on his enormous Texas ranch, is notorious for squeezing as much productivity out of his underpaid employees as is humanly possible. Stone presents a nuanced portrait of the entrepreneur, especially as he sketches in Bezos' unusual family history and a surprising turn it took during the writing of the book. His reporting on the Kindle's disruption of traditional publishing makes for riveting reading. A must-add to any business bookshelf.
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Product Details

  • ISBN-13: 9780316219280
  • Publisher: Little, Brown and Company
  • Publication date: 8/12/2014
  • Pages: 416
  • Sales rank: 246,516
  • Product dimensions: 5.40 (w) x 8.20 (h) x 1.20 (d)

Meet the Author

Brad Stone has covered Amazon and technology in Silicon Valley for more than 15 years, for publications such as Newsweek and the New York Times. He is a senior writer for Bloomberg Businessweek and lives in San Francisco.
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Read an Excerpt

The Everything Store

Jeff Bezos and the Age of Amazon


By Brad Stone

Little, Brown and Company

Copyright © 2013 Brad Stone
All rights reserved.
ISBN: 978-0-316-21926-6


CHAPTER 1

The House of Quants


Before it was the self-proclaimed largest bookstore on Earth or the Web's dominant superstore, Amazon.com was an idea floating through the New York City offices of one of the most unusual firms on Wall Street: D. E. Shaw & Co.

A quantitative hedge fund, DESCO, as its employees affectionately called it, was started in 1988 by David E. Shaw, a former Columbia University computer science professor. Along with the founders of other groundbreaking quant houses of that era, like Renaissance Technologies and Tudor Investment Corporation, Shaw pioneered the use of computers and sophisticated mathematical formulas to exploit anomalous patterns in global financial markets. When the price of a stock in Europe was fractionally higher than the price of the same stock in the United States, for example, the computer jockeys turned Wall Street warriors at DESCO would write software to quickly execute trades and exploit the disparity.

The broader financial community knew very little about D. E. Shaw, and its polymath founder wanted to keep it that way. The firm preferred operating far below the radar, deploying private capital from wealthy investors such as billionaire financier Donald Sussman and the Tisch family, and keeping its proprietary trading algorithms out of competitors' hands. Shaw felt strongly that if DESCO was going to be a firm that pioneered new approaches to investing, the only way to maintain its lead was to keep its insights secret and avoid teaching competitors how to think about these new computer-guided frontiers.

David Shaw came of age in the dawning era of powerful new supercomputers. He earned a PhD in computer science from Stanford in 1980 and then moved to New York to teach in Columbia's computer science department. Throughout the early eighties, high-tech companies tried to lure him to the private sector. Inventor Danny Hillis, founder of the supercomputer manufacturer Thinking Machines Corporation and later one of Jeff Bezos's closest friends, almost convinced Shaw to come work for him designing parallel computers. Shaw tentatively accepted the job and then changed his mind, telling Hillis he wanted to do something more lucrative and could always return to the supercomputer field after he got wealthy. Hillis argued that even if Shaw did get rich—which seemed unlikely—he'd never return to computer science. (Shaw did, after he became a billionaire and passed on the day-to-day management of D. E. Shaw to others.) "I was spectacularly wrong on both counts," Hillis says.

Morgan Stanley finally pried Shaw loose from academia in 1986, adding him to a famed group working on statistical arbitrage software for the new wave of automated trading. But Shaw had an urge to set off on his own. He left Morgan Stanley in 1988, and with a $28 million seed investment from investor Donald Sussman, he set up shop over a Communist bookstore in Manhattan's West Village.

By design, D. E. Shaw would be a different kind of Wall Street firm. Shaw recruited not financiers but scientists and mathematicians—big brains with unusual backgrounds, lofty academic credentials, and more than a touch of social cluelessness. Bob Gelfond, who joined DESCO after the firm moved to a loft on Park Avenue South, says that "David wanted to see the power of technology and computers applied to finance in a scientific way" and that he "looked up to Goldman Sachs and wanted to build an iconic Wall Street firm."

In these ways and many others, David Shaw brought an exacting sensibility to the management of his company. He regularly sent out missives instructing employees to spell the firm's name in a specific manner—with a space between the D. and the E. He also mandated that everyone use a canonical description of the company's mission: it was to "trade stocks, bonds, futures, options and various other financial instruments"—precisely in that order. Shaw's rigor extended to more substantive matters as well: any of his computer scientists could suggest trading ideas, but the notions had to pass demanding scientific scrutiny and statistical tests to prove they were valid.

In 1991, D. E. Shaw was growing rapidly, and the company moved to the top floors of a midtown Manhattan skyscraper a block from Times Square. The firm's striking but sparely decorated offices, designed by the architect Steven Holl, included a two-story lobby with luminescent colors that were projected into slots cut into the expansive white walls. That fall, Shaw hosted a thousand-dollar-a-ticket fund-raiser for presidential candidate Bill Clinton that was attended by the likes of Jacqueline Onassis, among others. Employees were asked to clear out of the office that evening before the event. Jeff Bezos, one of the youngest vice presidents at the firm, left to play volleyball with colleagues, but first he stopped and got his photo taken with the future president.

Bezos was in his midtwenties at the time, five foot eight inches tall, already balding and with the pasty, rumpled appearance of a committed workaholic. He had spent five years on Wall Street and impressed seemingly everyone he encountered with his keen intellect and boundless determination. Upon graduating from Princeton in 1986, Bezos worked for a pair of Columbia professors at a company called Fitel that was developing a private transatlantic computer network for stock traders. Graciela Chichilnisky, one of the cofounders and Bezos's boss, remembers him as a capable and upbeat employee who worked tirelessly and at different times managed the firm's operations in London and Tokyo. "He was not concerned about what other people were thinking," Chichilnisky says. "When you gave him a good solid intellectual issue, he would just chew on it and get it done."

Bezos moved to the financial firm Bankers Trust in 1988, but by then, frustrated by what he viewed as institutional reluctance at companies to challenge the status quo, he was already looking for an opportunity to start his own business. Between 1989 and 1990 he spent several months working in his spare time on a startup with a young Merrill Lynch employee named Halsey Minor, who would later go on to start the online news network CNET. Their fledgling venture, aimed at sending a customized newsletter to people over their fax machines, collapsed when Merrill Lynch withdrew the promised funding. But Bezos nevertheless made an impression. Minor remembers that Bezos had closely studied several wealthy businessmen and that he particularly admired a man named Frank Meeks, a Virginia entrepreneur who had made a fortune owning Domino's Pizza franchises. Bezos also revered pioneering computer scientist Alan Kay and often quoted his observation that "point of view is worth 80 IQ points"—a reminder that looking at things in new ways can enhance one's understanding. "He went to school on everybody," Minor says. "I don't think there was anybody Jeff knew that he didn't walk away from with whatever lessons he could."

Bezos was ready to leave Wall Street altogether when a headhunter convinced him to meet executives at just one more financial firm, a company with an unusual pedigree. Bezos would later say he found a kind of workplace soul mate in David Shaw—"one of the few people I know who has a fully developed left brain and a fully developed right brain."

At DESCO, Bezos displayed many of the idiosyncratic qualities his employees would later observe at Amazon. He was disciplined and precise, constantly recording ideas in a notebook he carried with him, as if they might float out of his mind if he didn't jot them down. He quickly abandoned old notions and embraced new ones when better options presented themselves. He already exhibited the same boyish excitement and conversation-stopping laugh that the world would later come to know.

Bezos thought analytically about everything, including social situations. Single at the time, he started taking ballroom-dance classes, calculating that it would increase his exposure to what he called n+ women. He later famously admitted to thinking about how to increase his "women flow," a Wall Street corollary to deal flow, the number of new opportunities a banker can access. Jeff Holden, who worked for Bezos first at D. E. Shaw & Co. and later at Amazon, says he was "the most introspective guy I ever met. He was very methodical about everything in his life."

D. E. Shaw had none of the gratuitous formalities of other Wall Street firms; in outward temperament, at least, it was closer to a Silicon Valley startup. Employees wore jeans or khakis, not suits and ties, and the hierarchy was flat (though key information about trading formulas was tightly held). Bezos seemed to love the idea of the nonstop workday; he kept a rolled-up sleeping bag in his office and some egg-crate foam on his windowsill in case he needed to bunk down for the night. Nicholas Lovejoy, a colleague who would later join him at Amazon, believes the sleeping bag "was as much a prop as it was actually useful." When they did leave the office, Bezos and his DESCO colleagues often socialized together, playing backgammon or bridge until the early hours of the morning, usually for money.

As the company grew, David Shaw started to think about how to broaden its talent base. He looked beyond math and science geeks to what he called generalists, those who'd recently graduated at the tops of their classes and who showed significant aptitude in particular subjects. The firm also combed through the ranks of Fulbright scholars and dean's-list students at the best colleges and sent hundreds of unsolicited letters to them introducing the firm and proclaiming, "We approach our recruiting in unapologetically elitist fashion."

Respondents to the letters who seemed particularly extraordinary and who had high enough grade point averages and aptitude-test scores were flown to New York for a grueling day of interviews. Members of the firm delighted in asking these recruits random questions, such as "How many fax machines are in the United States?" The intent was to see how candidates tried to solve difficult problems. After the interviews, everyone who had participated in the hiring process gathered and expressed one of four opinions about each individual: strong no hire; inclined not to hire; inclined to hire; or strong hire. One holdout could sink an applicant.

Bezos would later take these exact processes, along with the seeds of other Shaw management techniques, to Seattle. Even today, Amazon employees use those categories to vote on prospective new hires.

DESCO's massive recruitment effort and interview processes were finely tuned to Bezos's mind-set; they even attracted one person who joined Bezos as his life partner. MacKenzie Tuttle, who graduated from Princeton in 1992 with a degree in English and who studied with author Toni Morrison, joined the hedge fund as an administrative assistant and later went to work directly for Bezos. Lovejoy remembers Bezos hiring a limousine one night and taking several colleagues to a nightclub. "He was treating the whole group but he was clearly focused on MacKenzie," he says.

MacKenzie later said it was she who targeted Bezos, not the other way around. "My office was next door to his, and all day long I listened to that fabulous laugh," she told Vogue in 2012. "How could you not fall in love with that laugh?" She began her campaign to win him over by suggesting lunch. The couple got engaged three months after they started dating; they were married three months after that. Their wedding, held in 1993 at the Breakers, a resort in West Palm Beach, featured game time for adult guests and a late-night party at the hotel pool. Bob Gelfond and a computer programmer named Tom Karzes attended from D. E. Shaw.

Meanwhile, DESCO was growing rapidly and, in the process, becoming more difficult to manage. Several colleagues from that time recall that D. E. Shaw brought in a consultant who administered the Myers-Briggs personality test to all the members of the executive team. Not surprisingly, everyone tested as an introvert. The least introverted person on the team was Jeff Bezos. At D. E. Shaw in the early 1990s, he counted as the token extrovert.

Bezos was a natural leader at DESCO. By 1993, he was remotely running the firm's Chicago-based options trading group and then its high-profile entry into the third-market business, an alternative over-the-counter exchange that allowed retail investors to trade equities without the usual commissions collected by the New York Stock Exchange. Brian Marsh, a programmer for the firm who would later work at Amazon, says that Bezos was "incredibly charismatic and persuasive about the third-market project. It was easy to see then he was a great leader." Bezos's division faced constant challenges, however. The dominant player in the space was one Bernard Madoff (the architect of a massive Ponzi scheme that would unravel in 2008). Madoff's own third-market division pioneered the business and preserved its market lead. Bezos and his team could see Madoff's offices in the Lipstick Building on the East Side through their windows high above the city.

While the rest of Wall Street saw D. E. Shaw as a highly secretive hedge fund, the firm viewed itself somewhat differently. In David Shaw's estimation, the company wasn't really a hedge fund but a versatile technology laboratory full of innovators and talented engineers who could apply computer science to a variety of different problems. Investing was only the first domain where it would apply its skills.

So in 1994, when the opportunity of the Internet began to reveal itself to the few people watching closely, Shaw felt that his company was uniquely positioned to exploit it. And the person he anointed to spearhead the effort was Jeff Bezos.

D. E. Shaw was ideally situated to take advantage of the Internet. Most Shaw employees had, instead of proprietary trading terminals, Sun workstations with Internet access, and they utilized early Internet tools like Gopher, Usenet, e- mail, and Mosaic, one of the first Web browsers. To write documents, they used an academic formatting tool called LaTeX, though Bezos refused to touch the program, claiming it was unnecessarily complicated. D. E. Shaw was also among the very first Wall Street firms to register its URL. Internet records show that Deshaw.com was claimed in 1992. Goldman Sachs took its domain in 1995, and Morgan Stanley a year after that.

Shaw, who used the Internet and its predecessor, ARPANET, during his years as a professor, was passionate about the commercial and social implications of a single global computer network. Bezos had first encountered the Internet in an astrophysics class at Princeton in 1985 but hadn't thought about its commercial potential until arriving at DESCO. Shaw and Bezos would meet for a few hours each week to brainstorm ideas for this coming technological wave, and then Bezos would take those ideas and investigate their feasibility.

In early 1994, several prescient business plans emerged from the discussions between Bezos and Shaw and others at D. E. Shaw. One was the concept of a free, advertising-supported e-mail service for consumers—the idea behind Gmail and Yahoo Mail. DESCO would develop that idea into a company called Juno, which went public in 1999 and soon after merged with NetZero, a rival.

Another idea was to create a new kind of financial service that allowed Internet users to trade stocks and bonds online. In 1995 Shaw turned that into a subsidiary called FarSight Financial Services, a precursor to companies like E- Trade. He later sold it to Merrill Lynch.

Shaw and Bezos discussed another idea as well. They called it "the everything store."

Several executives who worked at DESCO at that time say the idea of the everything store was simple: an Internet company that served as the intermediary between customers and manufacturers and sold nearly every type of product, all over the world. One important element in the early vision was that customers could leave written evaluations of any product, a more egalitarian and credible version of the old Montgomery Ward catalog reviews of its own suppliers. Shaw himself confirmed the Internet-store concept when he told the New York Times Magazine in 1999, "The idea was always that someone would be allowed to make a profit as an intermediary. The key question is: Who will get to be that middleman?"
(Continues...)


Excerpted from The Everything Store by Brad Stone. Copyright © 2013 Brad Stone. Excerpted by permission of Little, Brown and Company.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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