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The ENTIRE History of Amazon in 20 Minutes — Transcript

by Built On You · 3,057 words · 454 segments · language en · Watch on YouTube

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0:00Open the tracking page on an Amazon
0:02order tonight and you won't see a store.
0:04You'll see a dot, a small dot crawling
0:08across a map, out of a warehouse you
0:10will never visit, onto a plane you will
0:12never board, into a van that turns onto
0:15your street before you have finished
0:16wondering where it is. Behind that dot
0:19is a building bigger than a dozen
0:21football fields, a robot lifting a
0:23shelf, a person scanning a box at 3 in
0:26the morning. You see none of it. That is
0:29the whole trick. Amazon is not a store
0:32that has warehouses. Amazon is a
0:35warehouse that grew a store. And the
0:38scale breaks your brain. When Amazon
0:41went public in 1997, the entire company
0:44was valued at about $438 million. Today,
0:48it takes in that much money in less than
0:505 hours. It employs around 1.5 million
0:54people, more than the entire active duty
0:57United States military. And unlike the
0:59military, it can get a phone charger to
1:02your door by Thursday. In August 2026,
1:05its market value passed $3 trillion.
1:09Here is what should be impossible.
1:12Borders is gone. Circuit City is gone.
1:15Sears, whose catalog once reached
1:17millions of American homes, collapsed
1:19into bankruptcy. Pets.com and Web Van,
1:23darlings of the internet boom, are long
1:25gone. Amazon is still here. Same name,
1:29same founders letter, same obsession.
1:32For most of its first decade, it was
1:34called a joke. The joke is now worth
1:37more than most countries produce in a
1:39year. So, how did a book seller in a
1:42garage outlive the giants of American
1:44retail? Why did a company that lost
1:47money year after year become one of the
1:49most valuable businesses on Earth? And
1:52why right now does the biggest store in
1:54the world make most of its profit from
1:56something you will never put in a
1:58shopping cart? This is the story of a
2:01lawyer who misheard a name and
2:02accidentally saved a brand. Of a stock
2:05that fell more than 90% and kept going
2:08anyway. Of a sketch on a napkin. A bell
2:11nobody could stand and a cancel button
2:14named after a Greek epic. Of a bookstore
2:17that built the device that made paper
2:19books optional. A story of boxes, of
2:22bonds, and of patience running out.
2:25Every company is built on something.
2:28Amazon was built on you. To understand
2:31any of it, we have to go back further
2:33than the garage, further than the
2:35website, to a cattle ranch in South
2:37Texas and a broken bulldozer. The story
2:40starts in January 1964 in Albuquerque,
2:44New Mexico with a mother who was only 17
2:47years old. Her name was Jacquine and the
2:50father of her baby was Ted Jorgensson, a
2:52teenage unicyclist who performed with a
2:54local troop and later ran a bicycle
2:56shop. The marriage fell apart within a
2:59couple of years. Jorgensson did not
3:01learn who his son had become until
3:03decades later when a journalist found
3:06him behind the counter of that bike
3:07shop. When the boy was four, Jacquine
3:10remarried. Her new husband was Miguel
3:12Bessos called Mike. As a teenager, he
3:16had come from Cuba alone through
3:17Operation Pedroan, a program that flew
3:20more than 14,000 Cuban children to the
3:23United States. He arrived with almost
3:25nothing, learned English, and worked his
3:28way into an engineering job at Exxon. He
3:31adopted Jeff, and Jeff took his name.
3:33The surname, now attached to one of the
3:35largest fortunes in history, came from a
3:38refugee kid with a suitcase. Every
3:41summer from about age 4 to 16, Jeff went
3:44to his grandfather's ranch in Cula,
3:46Texas. Lawrence Preston G had once
3:49worked on advanced defense research for
3:51the government, and he ran the ranch
3:53like an engineering problem. Most kids
3:55spend the summer at camp. Jeff spent his
3:58vaccinating cattle, fixing windmills,
4:00and once repairing a broken bulldozer by
4:03ordering giant gears through the mail
4:05and building a crane to lift them. He
4:08took one lesson home. A problem that
4:10looks impossible is usually a long list
4:13of small problems. Hold on to that. He
4:16studied electrical engineering and
4:18computer science at Princeton and at De
4:21Shaw, a hedge fund built on computers,
4:23he became the youngest senior vice
4:25president at 26. Then in the spring of
4:291994, he read a number. Use of the
4:32worldwide web was growing at around
4:342,300%
4:36a year. He made a list of 20 products
4:39that could be sold online and picked
4:41one. You may have heard he chose books
4:43because he loved them. The truth is far
4:46less romantic. Every copy of a title is
4:49identical, so nobody needs to touch it
4:51before buying. And there were millions
4:54of titles in print. The biggest
4:56bookstores of the day held maybe
4:58150,000. A website could list every
5:01single one. His boss took him on a long
5:04walk through Central Park and told him
5:06it was a good idea, but a better idea
5:08for someone who did not already have a
5:10good job. It may be the most expensive
5:13walk in the history of that park. Bezos
5:16pictured himself at 80 and asked which
5:18he would regret more, trying and failing
5:21or never trying at all. He called it a
5:24regret minimization framework. He quit.
5:28In the summer of 1994, Jeff and his wife
5:30McKenzie borrowed his father's Chevy
5:32Blazer and drove northwest. She drove.
5:36He sat in the passenger seat, typing
5:37revenue projections into a laptop. They
5:40chose Seattle for its software talent,
5:42for a giant book distributor's warehouse
5:44a short drive away in Oregon, and for a
5:47small state population, which meant
5:49collecting sales tax from fewer
5:50customers. On July 5th, 1994, the
5:54company was incorporated. Its name was
5:57Kadabra, as in Abracadabra.
6:00You may have heard Amazon's first name
6:02was Relentless. Bezos did register
6:05Relentless.com, and typing it into a
6:07browser still sends you to Amazon today.
6:10But the first name was Kadabra, and it
6:13died within months because a lawyer on
6:15the phone heard it as Kadaavver. Amazon
6:18came within one bad phone line of being
6:20a bookstore named after a corpse.
6:22Remember that lawyer? The replacement
6:25was the largest river on Earth for what
6:27he hoped would be the largest store on
6:30Earth. And in an age when websites were
6:32often listed alphabetically, it started
6:35with A. The office was the garage of a
6:37rented house in Belleview near Seattle,
6:40heated by a potbelly stove. The first
6:43employee was a programmer named Shell
6:45Cafe. The desks were wooden doors from a
6:48hardware store with 2x4s bolted on as
6:50legs. If you worked for the future titan
6:53of global commerce in 1995, your
6:56computer sat on something designed to
6:57keep drafts out of a hallway. For years
7:00afterward, Amazon handed out an award
7:02for frugal thinking, and the prize was,
7:05of course, a door desk. Money was the
7:08real problem. Bezos's parents put in
7:11about $245,000.
7:14Before they did, he told them there was
7:16roughly a 70% chance they would lose all
7:18of it. remember that number. He pitched
7:21around 60 outside investors and raised
7:24about $1 million from roughly 20 of
7:27them. On July 16th, 1995, the website
7:30went live. The first book was ordered by
7:33a computer scientist named John
7:35Waywright. A title called Fluid Concepts
7:38and Creative Analogies. In the garage, a
7:41bell had been wired to ring with every
7:43order. In the first days, everyone
7:46stopped to listen. Within weeks, it rang
7:49so often they switched it off. Remember
7:51that bell? The team packed every order
7:54by hand, kneeling on concrete. One day,
7:58Bezos said his knees were killing him
8:00and they needed knee pads. An employee
8:02suggested packing tables instead. Bezos
8:05later called it the smartest idea he had
8:07ever heard. A room full of future
8:10millionaires had invented the table.
8:12From that floor onward, every inch
8:15between a click and a box was a problem
8:17to be solved. On May 15th, 1997, Amazon
8:21went public at $18 a share. Remember
8:25that share. That year, Bezos wrote his
8:28first letter to shareholders, warning
8:30them he would make long-term decisions
8:32that might look terrible in the short
8:33term. He attached that letter to every
8:36annual letter for more than two decades.
8:39Then, growth turned violent. music,
8:42videos, toys, electronics, Britain and
8:45Germany. Barnes & Noble sued and a
8:48business magazine called the company
8:50Amazon.combomb.
8:52In 1999, Time named Bezos its person of
8:55the year, and the stock passed $100.
8:58That same year, Amazon won a patent on
9:01one-click ordering. Save your card once,
9:04and every purchase after that takes a
9:06single press of a button. For nearly two
9:08decades, rivals had to pay Amazon or
9:11make you click at least twice, which
9:13gave your brain just enough time to
9:15realize you probably did not need a
9:17third inflatable kayak at midnight.
9:20Apple paid. Then the bubble burst.
9:23Between late 1999 and late 2001, the
9:27stock fell from over $100 to around six.
9:31A chart that looks less like an
9:32investment and more like a ski slope. An
9:35analyst named Ravi Surya warned that
9:37Amazon could run out of cash. Amazon
9:40laid off 1,300
9:42people. What saved it was timing that
9:45looks almost accidental. In February
9:482000, weeks before the crash began, it
9:50had borrowed $672 million from investors
9:54in Europe. When the money vanished for
9:56everyone else, Amazon already had its
9:58cushion. You may have heard Amazon never
10:01made money in those years. In the fourth
10:03quarter of 2001, it posted its first
10:06quarterly profit, about $5 million. The
10:09deeper truth is that Amazon could often
10:12have been profitable. It kept choosing
10:14to pour every dollar back into lower
10:16prices and faster shipping. Remember
10:19that 70% chance of losing everything?
10:22The company still behaved as if the odds
10:24had never changed. And that is the
10:27secret of Amazon. Most stores are built
10:30around a product. Some are built around
10:32a place. Amazon was built around a gap.
10:36The gap between wanting something and
10:38having it. Around that time, Bezos drew
10:41it on a napkin as a circle. Lower prices
10:44bring more customers. More customers
10:46attract more sellers. More sellers mean
10:49more selection and fuller warehouses,
10:51which lower costs, which allow lower
10:53prices, which bring more customers. Push
10:57once and the wheel barely moves. Push
10:59for years and it spins on its own. In
11:03business language, it is a flywheel and
11:05every turn widens the moat. Arrival can
11:08match a price in an afternoon. Nobody
11:11has ever matched a habit in an
11:13afternoon. Notice where the circle
11:16starts, not with a product, with you. In
11:202000, Amazon let outside sellers list
11:23their goods right beside its own,
11:25sometimes cheaper. It was handing shelf
11:28space to its competitors, but every
11:30seller pushed the wheel. And today,
11:32those independent sellers account for
11:34more than 60% of the units sold on the
11:37site. In February 2005 came Prime for
11:41$79 a year, unlimited 2-day shipping.
11:45Finance people inside the company feared
11:47the heaviest shoppers would bleed it
11:49dry. They were right. That was the
11:51point. Prime turned a purchase into a
11:54habit and a habit into a membership. The
11:57impatience Amazon had been feeding was
11:59now a subscription. Then came the
12:02strangest move of all. You may have
12:05heard AWS was born from spare servers
12:07sitting idle after Christmas. Amazon's
12:10own chief technology officer calls that
12:12a myth. Amazon's engineers were so tired
12:16of their own internal chaos that they
12:18rebuilt everything into a giant set of
12:20digital building blocks so departments
12:23could stop begging each other for help.
12:25Then Andy Jasse and his team looked at
12:27the blocks and asked an obvious
12:29question. Why only play with them
12:31yourself when you can charge rent to
12:33everyone else who wants to build a
12:35castle? In 2006, Amazon Web Services
12:38opened for business. Remember the ranch?
12:42A problem that looks impossible is a
12:44long list of small problems. AWS was
12:47that lesson sold by the hour. This was a
12:51company that banned slide presentations
12:53from senior meetings and replaced them
12:55with six-page memos read in total
12:57silence so that some of the most
12:59powerful executives in technology spent
13:02the start of every meeting quietly
13:04reading paper like a study hall. In
13:06November 2007, the Kindle went on sale
13:09for $399
13:11and sold out in 52 hours. The company
13:15built on shipping paper books, had built
13:17the device designed to make them
13:19unnecessary.
13:20From here, the years fly. 2011, Borders,
13:24which had once handed its own website to
13:27Amazon to run, is liquidated. 2012,
13:30Amazon buys KA Systems, a robot maker,
13:33for $775 million.
13:37Remember those knees on the concrete?
13:39Now, the shelves drive themselves to the
13:41people. 2014, Amazon tries to build a
13:45smartphone. The Firephone has four front
13:48cameras, so the screen can tilt in 3D, a
13:51feature nobody asked for at the same
13:54price as an iPhone. It fails so
13:56completely that Amazon writes down $170
13:59million of unsold phones. Months later,
14:03Amazon shrugs and convinces millions of
14:05people to put a microphone that listens
14:07for its name next to their refrigerator.
14:10Her name is Alexa. 2017, Amazon buys
14:14Whole Foods for 13.7 billion, and on the
14:18first day, it cuts the price of bananas
14:20and avocados. The warehouse that grew a
14:23store is now buying stores. 2018, it
14:27becomes only the second American company
14:29to touch 1 trillion dollars in value
14:31while 238 cities and regions compete to
14:34host its second headquarters. One
14:37Georgia city offered to rename part of
14:39itself Amazon. July 5th, 2021, Bezos
14:43steps down as chief executive 27 years
14:46to the day after incorporating Kadabra.
14:49Andy Jasse, the man who built AWS, takes
14:52over. 2022. On Staten Island, a former
14:56warehouse worker named Christian Smalls,
14:58organizing from a tent beside a bus
15:00stop, wins the first successful union
15:02vote at an American Amazon facility.
15:052023, a lawsuit from the Federal Trade
15:08Commission describes a prime
15:09cancellation process of four pages, six
15:12clicks, and 15 options. Amazon's
15:15internal name for it was Iliad, the
15:17Greek epic about a war that drags on for
15:2010 years. Nobody at Amazon has explained
15:23the name. Nobody needed to. A later
15:26version of the same lawsuit alleges a
15:28secret pricing algorithm called Project
15:30Nessie, which the government says pulled
15:32more than $1 billion out of shoppers.
15:35Amazon says those claims are wrong.
15:382025, Amazon deploys its 1 millionth
15:42robot, begins about 30,000 corporate job
15:45cuts, and agrees to a $2.5 billion
15:48settlement over Prime. That same year,
15:51its satellite internet project is
15:52renamed Amazon Leo. Remember the lawyer
15:55who heard cadaavver? The name his
15:57mistake forced into being is now going
16:00into orbit. Early 2026, it closes every
16:04Amazon Go and Amazon Fresh store. Which
16:07brings us to right now. On July 30th,
16:10Amazon reported $200.6 billion in sales
16:14in a single quarter, the first time it
16:16had ever crossed 200 billion in 3
16:19months. Its cloud business grew 37%, its
16:23fastest pace in 18 quarters. And here is
16:26the paradox. Retail still brings in most
16:29of the money. But AWS with about 21% of
16:33revenue produced around 60% of operating
16:36profit. The store out front gets the
16:38attention. The profit comes from the
16:41landlord business out back renting
16:43computers to customers from Netflix to
16:45the CIA. The biggest store on Earth is
16:48financially speaking a landlord with a
16:51very large gift shop. On August 3rd, its
16:54market value passed $3 trillion. As
16:57October begins, it has slipped back to
17:00around 2.7 trillion. And remember that
17:02$18 share from 1997. After four stock
17:06splits, it has become 240 shares worth
17:10around $60,000.
17:12In September, Amazon borrowed in Europe
17:14again, raising 4.25 billion pounds in
17:17its first ever sterling bond sale.
17:20Remember the money from Europe that
17:21saved it in 2000? This time, nobody
17:24needed saving. But September was hard.
17:28On September 6th, a cargo jet flying for
17:30Amazon Air overran a runway in Miami and
17:34five people died. It was the first fatal
17:36crash in Amazon's air network since
17:382019. A week later, Amazon paused its
17:42work with the airline that operated it.
17:44And this month, the Prime settlement
17:46entered a new phase. More than $845
17:49million has already gone back to
17:52customers. The maximum refund has risen
17:54from $51 to $200. And on October 1st,
17:58automatic payments began reaching people
18:00who never even filed a claim. On October
18:0329th, Amazon reports its next results.
18:06And the government's monopoly case is
18:08scheduled for trial on March 29th, 2027,
18:11though Amazon has said it will ask to
18:13push that date back again. So why does
18:16any of this matter? Because Amazon's
18:18oldest bet is now the thing on trial,
18:21not a product. You. Before Amazon,
18:24waiting a week for a package was normal.
18:27Now 2 days can feel slow and every
18:30retailer on Earth has been forced to
18:32chase a standard set on a concrete floor
18:34in Belleview. The regulators argue the
18:37habit was engineered, that the wheel was
18:39spinning not just for customers, but
18:41against them. Amazon answers that
18:44customers keep coming back because they
18:45want to. Either way, the flywheel did
18:48not just spin inside Amazon. It spun
18:51inside you. And the people who carried
18:53its weight were real. The packers on
18:56their knees in 1995. The warehouse
18:59workers counting their steps. The pilots
19:01and drivers moving the dot across your
19:04map. A company built on your impatience
19:07is also built on their labor. In July
19:101995, a bell rang in a garage every time
19:13a stranger bought a book until nobody
19:16could stand to hear it. Tonight, that
19:18bell would ring millions of times.
19:21Nobody listens anymore. They just
19:23watched the dot. A garage could not hold
19:26it. A market collapse could not kill it.
19:28The giants that laughed at it could not
19:31outlast it. Amazon was never really
19:33built to sell you things. It was built
19:36to make waiting feel unbearable. The
19:38only question left is who decides how
19:41long you have to wait. Thanks for
19:43building this story with us. From a bell
19:46in a garage to a dot on your map. If it
19:48clicked, like and subscribe for the full
19:50story of more companies, one founder at
19:53a time. And tell us in the comments what
19:55was the first thing you ever ordered
19:57from Amazon. See you at the next build.

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