"I have this fantasy of being a bartender," Bezos said. "I pride myself on my craft cocktails." That said, Bezos admitted he's very slow. In his fantasy bar, there would be a sign saying, "Do you want it good or do you want it fast?"
Bezos said everyone has two options for creating their "life story." Either you go for a life of "ease and comfort" or a life of "service and adventure." Bezos is clear about which is the right choice: He said you'll be prouder of living an adventurous life when you're 80 years old.
It goes back to Bezos' "regret minimization framework," which he mentioned at the Summit Series. In an oft-cited interview, which appears to have been conducted by the Academy of Achievement, Bezos described his decision to found Amazon:
"I knew that when I was 80, I was not going to regret having tried this. I was not going to regret trying to participate in this thing called the Internet that I thought was going to be a really big deal. I knew that if I failed, I wouldn't regret that.
"But I knew the one thing I might regret is not ever having tried. I knew that that would haunt me every day."
Mathias Döpfner, the CEO of Business Insider's parent company, Axel Springer, recently sat down with Amazon CEO Jeff Bezos to talk about the early days of creating Amazon, what he's learned since then, how he funds his rocket company, Blue Origin, and what it's like when the president of the United States is your biggest critic.
The sit-down interview happened in Berlin, where Bezos received the Axel Springer Award 2018.
Mathias Döpfner: Jeff, welcome to Berlin.
Jeff Bezos: Thanks. It's great to be here.
Döpfner: When we were sitting in the first row just a couple of minutes ago, waiting for the award ceremony, you looked at me: "Mathias, are you nervous?" And I said, "Yes, I'm always nervous on occasions like this." And you said, "So am I." And I said, "Really?" The richest person in the world is nervous … ."
Jeff, you used to work in New York as an investment banker. So, an investment banker is actually the exact opposite of an entrepreneur. He's not taking risks himself — he is taking advantage of risks that other people take. How did you dare to think that you should become an entrepreneur and really launch a company?
Bezos: I think I always wanted to do it, even since I was a kid. I had the idea. I was one of those people who every time I looked at something it looks like it could be improved — there's something wrong with it. So I'd go through, like, how could this restaurant be better? So I've always had that kind of idea.
By the way, before we really get into this: How about this amazing production that you and your team have put together? This is truly incredible for its originality. These boxes that you were filming live - that's just crazy cool. So, thank you.
I think the great thing about humans in general is we're always improving things. And so if entrepreneurs and inventors follow their curiosity and they follow their passions, and they figure something out and they figure out how to make it. And they're never satisfied. You need to harness that. In my view, you need to harness that energy primarily on your customers instead of on your competitors. I sometimes see companies - even young, small startup companies or entrepreneurs who arrived — is that they start to pay more attention to their competition than they do to their customers. And I think that in big mature industries, that can or might be a winning approach that some cases they kind of close follow. They let other people be the pioneers and, you know, go down the blind alleys. There are many things that a new, inventive company tries that won't work. And those mistakes and errors and failures do cost real money.
And so maybe in a mature industry where growth rates are slow and change is very slow, but, as you see in the world more and more, there aren't that many mature industries. Change is happening everywhere. You know, we see it in the automobile industry with self-driving cars, but you can go right down the line of every industry and see it.
Döpfner: But do you have any idea of where your ambition really comes from — what was driving you?
Bezos: I really don't know. I have been passionate about certain things forever, and I fell in love with computers in fourth grade. I got very lucky: My elementary school had a teletype that was connected to a mainframe computer that some business in downtown Houston donated a little bit of computer time to. You can picture these teletypes: They had the punch tape and they had a 300-baud modem. You would dial up the phone and put it in the cradle, and so we had some time-sharing on that mainframe computer, and none of the teachers knew how to use it, so me and two other kids stayed after school and sort of figured out how to do it, and kind of taught ourselves programming from books. I think one thing is, I got very lucky early in my childhood.
Look, we all get gifts, we get certain things in our life that we're very lucky about. And one of the most powerful ones is who your early role models are, you know it could be...
Döpfner: Your grandfather.
Bezos: It was — in a big sense. My mom and my dad and my grandfather too. My mom had me when she was 17 years old, and she was still in high school, in Albuquerque, New Mexico, and this is in 1964. I can assure you that being a pregnant teenager in high school was not cool in Albuquerque, New Mexico, at that time. And so it was very difficult for her. My grandfather went to bat for her, and then they tried to kick her out of school, and they're incredible, so the gift I had was I that had this incredible family.
Döpfner: Could you describe a little bit the role of your grandfather? It seems he was particularly important to you.
Bezos: He was super important for me, and I spent an unusual amount of time with my grandparents, and especially with my grandfather on the ranch. He had a ranch in South Texas, and I would spend my summers there, from age 4 to 16. When I was 4, they were taking me for the summer to kind of give my parents a break. I was so young, and it was useful. I was a handful, I'm sure. Anyway, he created the illusion for me when I was 4 years old that I was helping him on the ranch. Which, of course, cannot have been true. But I believed it. And by the time I was 16, of course, I was actually helping on the ranch. I could fix prolapsed cattle; we did all our own veterinary work. Some of the cattle even survived. [Laughs] And we fixed windmills, and laid water pipelines, and built fences, and barns, and fixed the bulldozer that you guys talked about. And so one of the things that's so interesting about that lifestyle and about my grandfather is he did everything himself. You know, he didn't call a vet if one of the animals was sick; he figured out what to do himself.
Döpfner: So, the lesson was, if it really matters, there is no delegation?
Bezos: Being resourceful. If there's a problem, there's a solution. And of course as you get into the business world and anything you do on a team, you very quickly realize that it's not just about your own resourcefulness and that it's about team resourcefulness. And how does that work? But that attitude of my grandfather's — he was full of wisdom. And as John mentioned the story about the words my grandfather gave me at one point that "It's harder to be kind than clever."
That story — the slightly longer version of that story, because this is really powerful wisdom — is that I made my grandmother burst into tears. The way I did it was we were driving on a long road trip, and she was a chain-smoker. And this was — I was probably 10 years old — so this was around 1974, and we was in a period of time where there were heavy anti-smoking radio advertisements trying to convince people to stop smoking. One of the advertisements had this figure in it that said something like, "Every puff of a cigarette takes so many minutes off your life." I think it was two minutes but can't remember.
So, I sat in the back of the car on this long car ride and calculated how many years she had taken off of her life. In my 10-year-old mind, I had been extremely clever to do this, and so when I was finished with my arithmetic, I proudly announced to her how many years she had taken off of her life. And I got a reaction I did not expect, with her bursting into tears. So my grandfather stopped the car and he took me out of the car. And I had no idea what was about to happen, because he had never said a cross word to me. I thought, he might actually be angry with me. But he wasn't. He took me out so that we had some privacy from her and he said these incredible words. He said, "You're going to figure out one day that it's harder to be kind than clever."
Döpfner: Wonderful. And how about your brother? Is it true that he's still a firefighter?
Bezos: He is. He's a volunteer firefighter in Scarsdale, New York. He's also the funniest person I know. When I'm with him I'm just laughing continuously. First of all, I'm a good audience — I mean, I laugh easily. But he is really very funny, and my sister too. We're all very close. And I have my mother to thank for that because she worked hard to make sure as we grew up so that we stayed close together. She takes all the grandkids for one week every summer so that me and my sister and our spouses can go on a trip together. So we end up spending a lot of time together.
Döpfner: For me, the most moving image that we saw tonight was the one that John Elkann showed, where you and MacKenzie are constructing that famous office table. It is very moving because it shows how you really started from scratch, like two classmates. It illustrates, symbolically, that the launch of Amazon was really something that you did together. Could you describe a little bit what MacKenzie's role was?
Bezos: Well, first of all, MacKenzie, you know, she had married this stable guy working on Wall Street, and a year after we got married, I went to her and said I wanted to quit my job, move across the country, and start this internet bookstore. And MacKenzie, of course, like everybody I explained this to, her first question was: "What's the internet?" Because nobody knew. This was 1994.
But even before she could say "What's the internet?" she said, "Great — let's go!" Because she wanted to support it and she knew that I had always had this passion for invention and starting a company. And so again, I think, you know, MacKenzie is an example of this, what I was talking about with my mom and my dad, who's a Cuban immigrant, and he came to the US when he was 16 in a refugee camp in the Everglades. They are so loving and supportive. When you have loving and supportive people in your life, like MacKenzie, my parents, my grandfather, my grandmother, you end up being able to take risks. Because I think it's one of those things, you know, you kind of know that somebody's got your back. And so if you're thinking about it logically, it's an emotional thing.
Döpfner: So you think that unconditional love — if you feel and experience unconditional love — it helps you to take risks in life?
Bezos: I think it helps you take … By the way I think that's probably true for all kinds of risks in life, not just for starting a business. Life is full of different risks. And I think that, when you think about the things that you will regret when you're 80, they're almost always the things that you did not do. They're acts of omission. Very rarely are you going to regret something that you did that failed and didn't work or whatever. But the acts of omission. And again, I'm not just talking about business things — it's, like, "I love that person and I never told them," and, you know, 50 years later you're, like, "Why didn't I tell her? Why didn't I go after it?" So that's the kind of life regret that is very hard to be happy about when you're telling yourself in a private moment that story of your life. I have been — I've won that lottery, of having so many people in my life who have given me that unconditional love, and I do think that MacKenzie's definitely one of those. So, we moved, and then MacKenzie, who basically has no skill in this area at all — I mean, really, you're the least suited person for this. But she did our accounting for the first year. Was it the first year?
MacKenzie Bezos: Yeah.
Bezos: Something like that. And she did it well. That's what's amazing. My wife is a novelist. She's won the American Book Award. Toni Morrison, the Nobel Prize-winning author, who was MacKenzie's teacher at Princeton, said on the "Charlie Rose" show that MacKenzie was her best student ever. So MacKenzie is a very talented novelist, but she is not an accountant. But she pulled it off. And again, we all got done what we needed to get done.
Döpfner: Did she, being an author, suggest that you focus on the book business at the beginning?
Bezos: No, I picked books. It is true that she's a big reader and I'm a big reader. But that's not why I picked books. I picked books because there were more items in the book category than in any other category. And so you could build universal selection. There were 3 million in 1994 when I was pulling this idea together — 3 million different books active in print at any given time. The largest physical bookstores only had about 150,000 different titles. And so I could see how you could make a bookstore online with universal selection. Every book ever printed, even the out-of-print ones was the original vision for the company. So that's why books.
Döpfner: And when did you know that Amazon was going to be successful?
Bezos: Well, I knew that the books, strangely — I was very prepared for this to take a really long time. I knew that the books business was going to be successful in the first 30 days. I was shocked at how many books we sold. We were ill-prepared. We had, like, only 10 people in the company at that time. And most of them were software engineers. So, everybody, including me and the software engineers were all packing boxes. We didn't even have packing tables. We were down on our hands and knees on a concrete floor, packing the boxes. At about 1 or 2 in the morning, I said to one of my software-engineering colleagues — I said, "You know, Paul, this is killing my knees. We need to get knee pads." And Paul looked at me and he was, like, "Jeff, we need to get packing tables." [Laughs] And I was, like, "Oh, my God, that is such a good idea." The next day I bought packing tables, and it doubled our productivity, and probably saved our backs and our knees too.
Döpfner: But Amazon had serious crises. You went almost bankrupt. What went wrong?
Bezos: We had so many; there have been so many. I haven't had any existential crises — knock on wood — I don't want to jinx anything. But we've had a lot of dramatic events. I remember, early on, we only had 125 employees, when Barnes & Noble, the big United States bookseller, opened their online website to compete against us, barnesandnoble.com. We'd had about a two-year window. We opened in 1995; they opened in 1997. And at that time all of the headlines — and the funniest were about how we were about to be destroyed by this much larger company. We had 125 employees and $60 million a year in annual sales — $60 million with an "M." And Barnes & Noble at that time had 30,000 employees and about $3 billion in sales. So they were giant; we were tiny. And we had limited resources, and the headlines were very negative about Amazon. The one that was most memorable was just "Amazon. toast." [Laughs]
And so I called an all-hands meeting, which was not hard to do with just 125 people. We got in a room, and because it was so scary for all of us, this idea that now we finally had a big competitor. That literally everybody's parents were calling and saying, "Are you OK?" It's usually the moms calling and asking their children are you going to be OK? So, and I said, "Look, you know, it's OK to be afraid, but don't be afraid of our competitors, because they're never going to send us any money. Be afraid of our customers. And if we just stay focused on them, instead of obsessing over this big competitor that we just got, we'll be fine." And I really do believe that. I think that if you stay focused and the more drama there is and everything else, no matter what the drama is. Whatever the actionable distraction is, your response to it should be to double down on the customer. Satisfy them. And not just satisfy them — delight them.
Döpfner: Amazon is employing 566,000 people. You're probably the biggest job creator of recent times. At the same time, you are aggressively criticized by unions, and by the media for paying low wages, for inappropriate working conditions. How do you deal with these accusations?
Bezos: Well, first of all, with any criticism ... my approach to criticism and what I teach and preach inside Amazon — is when you're criticized, first look in a mirror and decide, are your critics right? If they're right, change. Don't resist.
Döpfner: Are they right?
Bezos: No. Not in this case. But we've had critics be right before, and we changed. We have made mistakes. And you know, I can go through a long list. One of the early, most painful ones is so stupid, it's hard to believe how we ever did it. But early on with the Kindle, either the first year of the Kindle or the second year of the Kindle, we had accidentally illegally sold —or given away I guess — copies of the famous novel "1984." Because it had a complicated copyright history, it was in copyright in the US and not in the UK, or something strange like this, so it was in the public domain, but only in certain geographies. And we had screwed that up. And somehow, and this is the kind of mistake that only a corporation can make, an individual can't make this mistake because somehow it happens at the intersections of the different teams, so you've got the legal department saying, "Oh crap, we've made this mistake" and you've got the books team … And anyway, the answer the company came up with was to — and we did this without warning — just electronically go into everybody's Kindle who had downloaded that book and just disappear it. [Laughs] So, it'd be as if we'd walked into your bedroom in the middle of the night, found your bookshelf, and just took that book away. And so we were rightly criticized for that, and we responded to that.
On the issue of working conditions, I'm very proud of our working conditions and very proud of the wages we pay. You know, in Germany we employ 16,000 people, and we pay at the high end of the range for any comparable work.
Döpfner: So, is it a union fight, because the union wants to make sure you are unionized, or what is the real substance of the conflict?
Bezos: It's a good question. And this is in my longer version of how to deal with critics.
There are two kinds of critics. There are well-meaning critics who are worried it's not going to work, but they do want it to work. So it could be — I can give you an example — customer reviews would be one of those. When we first did customer reviews 20 years ago, some book publishers were not happy about it because some of them were negative so it was a very controversial practice at that time, but we thought it was right and so we stuck to our guns and had a deep keel on that and didn't change. But there's a second kind of critic, which is the self-interested critic, and they come in all shapes and sizes. So they can be any kind of institution, competitors, of course. And so when you are doing something in a new way, and if customers embrace the new way, what's going to happen is incumbents who are practicing the older way are not going to like you. And they're going to be self-interested critics.
And so you do need, as you're looking at yourself in the mirror, to try and tease those two things apart. In our view, we have workers' councils, of course, and we have very good communications with our employees. So we don't believe that we need a union to be an intermediary between us and our employees but, of course, at the end of the day, it's always the employees' choice. And that's how it should be. But for sure we would be very naïve to believe that we're not going to be criticized. That's just part of the terrain. You have to accept that. One thing that I tell people is if you're going be, if you're going to do anything new or innovative, you have to be willing to be misunderstood. If you cannot afford to be misunderstood, then for goodness' sake, don't do anything new or innovative.
Döpfner: Maggie Thatcher said, "Leadership is not to be pleased by the moment."
Bezos: Perfect.
Döpfner: But your most prominent critic at the moment is the president of the United States. People are even saying that he may be willing to prepare initiatives to break up Amazon, because it's too big, it's too successful, it's too dominant in too many sectors, or for varied other reasons, including the fact that he doesn't like The Post. Is this break-up scenario something that you take seriously, or do you think it's just a fantasy?
Bezos: For me, again, this is one of those things where I focus on and ask our teams to focus on what we can control, and I expect, whether it's the current US administration or any other government agency around the world, Amazon is now a large corporation and I expect us to be scrutinized. We should be scrutinized. I think all large institutions should be scrutinized and examined. It's reasonable. And one thing to note about is that we have gotten big in absolute terms only very recently. So we've always been growing very fast in percentage terms, but in 2010, just eight years ago, we had 30,000 employees. So in the last eight years we've gone from 30,000 employees to 560,000 employees.
You know, in my mind, I'm still delivering the packages to the post office myself. You see what I'm saying? I still have all the memories of hoping that one day we could afford a forklift. So obviously my intellectual brain knows that's just not the case anymore. We have 560,000 employees all over the world. And I know we should be scrutinized and I think it's true that big government institutions should be scrutinized, big nonprofit institutions should be scrutinized, big universities should be scrutinized. It just makes sense. And that's, by the way, why the work at The Washington Post and all other great newspapers around the world do is so important. They are often the ones doing that initial scrutiny, even before the government agencies do.
Döpfner: The general sentiment concerning the big innovative tech companies has changed. Facebook, Google, Amazon, Apple: They used to be seen as the nice guys in T-shirts who are saving the world. Now they are sometimes portrayed as the evil of the world. And the debate about the Big 4 or the Big 5 is heating up: Professors like Scott Galloway and The Economist are suggesting a split-up, other powerful people like George Soros are giving very critical speeches at Davos, and the EU Commission is taking pretty tough positions here. Do you think that there is a change in the mindset of society, and how should the big tech companies, how should Amazon deal with that?
Bezos: I think it's a natural instinct. I think we humans, especially in the Western world, and especially inside democracies, are wired to be skeptical and mindful of large institutions of any kind. We're skeptical always of our government in the United States, state governments, and local governments. I assume it's similar in Germany. It's healthy, because they're big, powerful institutions — the police, the military, or whatever it is. It doesn't mean you don't trust them, or that they're bad or evil or anything like that. It's just that they have a lot of power and control, and so you want to inspect them. Maybe that's a better word. You kind of want to always be inspecting them. And if you look at the big tech companies, they have gotten large enough that they need and are going to be inspected. And by the way, it's not personal. I think you can go astray on this if you're the founder of a company — one of these big tech companies, or any other big institution. If you go astray on this, you might start to take it personally. Like, "Why are you someone inspecting me?" And I wish that people would just say, "Yes, it's fine."
Döpfner: The whole attitude toward data protection and privacy has always been different between Europe and the United States, but it is also at the moment — in the context of events like Cambridge Analytica — changing in the United States. Is this criticism hysterical or is it appropriate? And what are the consequences for a company like Amazon?
Bezos: I think this is one of the great questions of our age. I think of the internet like this big, new, powerful technology. It's horizontal. It affects every industry. And if you think of it even more broadly, it's tech and machine learning, big data, and all these kinds of things. These are big, horizontal, powerful technologies. And in my view the internet is quite old at this point; we've been around a long time. But that scale has only been around 10 or 15 years. You know, go back in time 20 years and it was tiny. And so that scale has only been around 10 or 15 years. And so we haven't learned as a civilization and a human species how to operate that yet. We as a civilization are still figuring all of that out. It gives us fantastic capabilities. The fact that I can look up almost anything on Wikipedia in five seconds is an unbelievable capability that just simply didn't exist 20 years ago. And so on and so on. But we're also finding out that these powerful tools enable some very bad things, too, like letting authoritarian governments interfere in free democratic elections in the world. This is an incredibly scary thing.
Döpfner: So you are advocating a balance of, say, entrepreneurs who are really moving their businesses forward, politicians and regulators who are defining a certain framework, society and journalists who are asking unpleasant questions?
Bezos: My view on Amazon's role in this, which is what you asked me. I think, first of all, we have a duty on behalf of society to try and help educate any regulators, to give them our point of view sincerely, without any cynicism or skepticism. This is what we believe. But it's not ultimately our decision, so we will work with any set of regulations that we're given. Ultimately, society decides that. We will follow those rules regardless of the impact they have on our business. And we will find a new way, if need be, to delight customers.
What you have to worry about and the problem I would not want to see happen is that you don't want to block innovation and invention. One of the unintended consequences often of regulation is that it really favors the incumbents. Now, Amazon at this point is an incumbent, so maybe I should be happy about that. But I wouldn't be because I think for society, you really want to see continued progress. To the degree that we have regulation, we want to be sure that it is incenting innovation and not blocking it, while at the same time, regarding data security, privacy, and encryption — how do you safeguard people's physical safety against terrorists and bad actors all over the world, and how do you balance that against privacy? These are very challenging questions. And we're not going to answer them, even in a few years. I think it's going to be an ongoing thing for quite a while.
Döpfner: Data security and privacy are going to be competitive advantages for companies or a disadvantage for those who are not dealing respectfully and responsibly with data.
Bezos: I 100% agree with this. I think with customers one of the reasons we have been able to extend into new business areas and pursue new product categories. Going way back, we just sold books, and then we started selling music and DVDs and electronics and toys and so on, and then we extended into electronic reading with Kindle. The reason customers have been receptive in large part to our new initiatives is because we have worked hard to earn their trust with them. Earning trust with customers is a valuable business asset. And if you mistreat their data, they will know, they will figure it out. Customers are very smart. You should never underestimate customers.
Döpfner: You're preparing a second headquarter. It's going to be in the US. Why didn't you consider doing it in Europe?
Bezos: I wanted it in a time zone either in Canada, the US, or Mexico.
Döpfner: So it's not an anti-Europe decision?
Bezos: No, absolutely not.
Döpfner: When you bought The Post there were people saying, "Well, that's just a personal toy — he wants to have some political influence in Washington." Other people thought it was a new long-term element of your strategy. So what was it?
Bezos: You can explain things to people, but you can't understand things to people. All I can do is say really what my thought process was. I was not looking to buy a newspaper. It had never even crossed my mind. So when the opportunity came up, because I had known Don Graham at that point for 15 years. And any of you who are lucky enough to know Don know that he is the most honorable gentleman that you'll ever meet. You know him very well. He's a remarkable guy. He so loved The Post that he believed, even if this was a huge personal sacrifice for him, because it had been in his family for so long, that he needed to find a new home for it.
I think there were certain purchasers he was hoping would not end up buying The Post, because he wanted it to remain independent. So when he approached me with this I said, "You know, I'm the wrong guy, because I don't know anything about the newspaper business." And he said, "That's OK, because we have