Amazon’s Jeff Bezos is never low-profile, but the deca-billionaire is facing one of his biggest public tests yet as he goes before Congress, says Laurence Dodds of the Daily Telegraph
When the future king of the world deigned to meet Simon Murdoch, he led with a threat.
It was 1998 and Jeff Bezos, the head of a fledgling e-commerce company called Amazon.com, had invited the entrepreneur to a duplex hotel suite in Kensington, London, to propose a deal.
Amazon, Bezos explained, would soon be expanding into the UK, which would mean competing with Murdoch’s own company, Bookpages.
But might it not be better for the two firms to work together? Might both make so much more money if Amazon bought Bookpages?
“That was a veiled threat, yes of course,” recalls Murdoch, who now spends his work hours searching for the next Bezos as head of the London-based venture capital firm Episode 1.
“That was one of the key points we took away from the meeting: ‘consider this carefully or prepare to be squashed’. He said that to us not being aggressive or nasty, just being factual… and I know for a fact they talked to at least one of our competitors. He is a very ruthless businessman… he is the smiling assassin.”
Today, Bezos has a net worth of around US$180 billion ($270b) – bigger than the entire market capitalisations of Nike, McDonald’s, Starbucks and Goldman Sachs.
He is still the world’s richest man even after the largest divorce settlement in history (US$38b).
Not that he is satisfied.
Amazon continues to expand relentlessly, ambushing British supermarkets this week with the news that it would start delivering groceries in the UK immediately.
Customers, initially in London and the South East, will be able to buy cheese, baked goods, fresh meat, fruit and vegetables with no delivery fee if they subscribe to its £7.99 a month Prime service.
Like industrialists of yore, Bezos has his own newspaper, The Washington Post, and through his space company Blue Origin he even hopes to shape humanity’s future.
All of which could make today’s appearance before Congress fairly dramatic.
Testifying alongside Facebook’s Mark Zuckerberg, Alphabet’s Sundar Pichai and Apple’s Tim Cook, Bezos will be grilled about accusations that Amazon exploited sales data from companies on its third-party marketplace to devise its own rival products – an accusation it firmly denies.
Bezos cuts a very different figure to his fellow tech barons.
For one thing, he has never testified before, making him an unknown quantity on Capitol Hill.
Whereas Zuckerberg and Cook often use their own products to broadcast their thoughts, he rarely gives interviews, does not appear on TV and does not even join his own earnings calls.
The differences do not stop there: Bezos is not only the oldest at 56 (20 years beyond Zuck) but also the least outwardly geeky.
He does not boast of being an “engineer” or a “coder”, let alone a “hacker”.
His company began with a business plan, not a revolutionary algorithm or an addictive piece of software, and now has a reputation among tech workers for elevating hard-nosed corporate sharks over unkempt eggheads.
And yet for the first 26 years of his life, Bezos too seemed like a typical nerd.
Growing up in Texas and Miami, he built home-made versions of toys he could not afford and appeared in a documentary about gifted children.
Born Jeffrey Jorgenson in 1964, Bezos never knew his biological father. His adoptive father was Mike Bezos, a Cuban refugee.
Later, he studied computer science and worked for technology firms, but at 26 he made the fateful decision to accept a job at a New York hedge fund – albeit one founded by a computer scientist.
Bezos’s four years at DE Shaw may well have changed the world.
It was while managing Shaw’s new internet investments and analysing the nascent e-commerce sector that Amazon began to take shape as an idea.
In 1994 he left, driving across the country to Seattle to be close to a massive book distribution hub.
Simon Murdoch came on board four years later, leading Amazon’s new UK arm.
The 59-year-old Yorkshireman remembers Bezos as an “awesome individual” unfazed by his then net worth of US$4b.
“He seemed very authentic – super smart, very passionate. We instantly felt this was somebody who was charismatic and that we wanted to work with,” Murdoch recalls.
He also remembers the occasional “poisonous” remark and a brutal work schedule which caused some employees (including Murdoch) to burn out.
Mostly, though, he saw the qualities that secured Amazon’s victory: a gift for inspiring employees by building a distinctive office culture, an obsession with recruiting exceptional people, and a willingness to delegate that would later allow Amazon to diversify itself far more than the narrowly-focused Facebook.
Even so, it took another decade and a half for those plans to come to fruition.
Amazon’s share price lagged behind its rapid customer growth as Bezos, in what is now a famous and lauded strategy, ploughed all its profits back into expansion.
“The narrative with Bezos and Amazon then was: ‘what’s wrong with the investment community that they continue to fund a business that loses money with every transaction?’ ” says Steven Weber, a professor of technology and global politics at the University of California, Berkeley.
“[Investors believed] that it was playing the game of the dotcom era – pay the cost to acquire customers, and once we have that market owned we’ll raise profits.”
What changed that, Weber says, was Amazon Web Services (AWS).
Spun off from Amazon’s own internal cloud computing division in 2006, it initially seemed a strange venture.
“Why should a company that has set its heart on being the best e-commerce business also try to become the best in server technology?” Murdoch recalls.
Over the next 10 years AWS became the backbone of the internet, letting smaller companies rent computing power as easily as they might rent electricity.
In 2015 it made its first profit, transforming Amazon’s finances and triggering a gigantic stock rally which made Bezos’s fortune.
For Murdoch, AWS epitomises the audacious Tao of Bezos.
“He doesn’t really care what other people think, and he doesn’t care about Wall Street either,” he says.
The turnaround confirmed Bezos as a cult figure among business strategists, who often cite his regular shareholder letters.
It coincided with a transformation in his personal image, most visible in widely-discussed 2017 photos of his suddenly bulging muscles and his high-profile affair with the actress and TV anchor Lauren Sánchez.
It also seems to have given him the time to return to his teenage space obsession, funding and personally joining an oceanic expedition to recover the sunken rocket engines that threw Neil Armstrong towards the moon.
The deca-billionaire will go before Congress with deep reserves of swagger.
Some members might raise an eyebrow at Amazon’s estimated 38 per cent share of US e-commerce and its 32 per cent share of the cloud computing market – to say nothing of his 1999 statement that “a level playing field” is not desirable “when you’re marching into battle”.
Weber argues that AWS, which is a key vendor to the US state and military, is a political ace in the hole as well as a financial one.
“If I were Bezos I might want to say: ‘the thing I am most proud of is actually AWS’,” he says, imagining the tycoon’s pitch.
” ‘It has lowered the barrier for entrepreneurship in the US, and created the possibility for smaller companies. How many jobs has Facebook created?’…
“Americans love that kind of audacity if it works out. If it doesn’t work you’re a moron and a criminal. If it does work out you’re a genius and a visionary.”
With an average wealth increase of US$12m every hour, it would be hard to argue with the results.