Episode 59: Jeff Bezos reflection

Trying to understand Jeff Bezos and what made him the man he is today is a little like trying to nail jell-o to the wall. You might get little parts of the story (and you’ll make a mess along the way) but you’ll never get the whole picture.

There’s just so much of the “out-of-the-ordinary” about him. In a way, we shouldn’t be surprised, considering the typical image of the eccentric millionaire (or billionaire), but there’s something about the dotcom super-rich like Jeff Bezos. They’re often a  unique mix.  One part crazy inventor with two parts serious businessperson. They are enigmatic and don’t fit in any box. They challenge what we think we know about other people through their genius and drive. You don’t have to love what they do, or how they do it, but you do have to admire just how darn good they are at it. 

We spoke about –

1) Overcoming your obstacles

2) Building your skills

3) Start small and pivot

4) Can’t always care about what other people think

5) You’ll have to make tough decisions and

6) You’ll have to be efficient with your time.

Well, these massively successful individuals have ideas that change the world. So much so that in popular slang, people like Jeff Bezos, and companies like Amazon, have become known as unicorns. It’s something that is unbelievably rare, to the point of being unique. Everybody wants to get close to people like that, to see what they’re made of and what makes them different from the rest of us. We’ve come to understand some of what Jeff has done, but there’s still so much more to the story! 20 minutes can’t do it justice.

Venture capitalists, who seek to invest in companies when companies are beginning to really grow, will spend their lives looking for unicorns. They call it a “10x” (or more) investment. It means whatever money they put into the investment, they’ll get ten times the money they put in. These are Facebooks, Apples, and the Amazons. It’s not a coincidence that in the past 20-30 years, the unicorn is usually a “digital” unicorn. Tech is where a lot of these 10x investments have come from. Don’t let people kid you that the “tech bubble has burst” or that a lot of these companies don’t sell physical products and are therefore overpriced. They’re here to stay, and they’ll likely continue to grow too. 

Of course that doesn’t mean I don’t wish I’d bought 50 shares of Amazon stock in 1997 at a dollar fifty a share, of course. Today that original $75 investment would be worth somewhere around $160,000! But, returns like that are not a random event. They demonstrate the value those companies brought to our lives, delivering a quality product that people wanted, on a global scale, and disrupting all the existing ways that consumers interacted with the world in an incredibly short period of time. 

What Jeff Bezos did with Amazon is perhaps the most remarkable example of that. Imagine a store at your local mall where you could buy pretty much anything, but you could also go and sell pretty much anything too, and the prices were almost always lower than at the other stores. And, if they didn’t have an item in stock you’d get it the very next day? It’s incredible but that’s essentially what Bezos did. If I told you that you’d be able to buy anything you wanted from your home, have it the next day and you only needed to go to one place online about 20 years ago, you’d probably have thought I was crazy.

Of course, nothing is ever that simple, and there are other aspects to the Amazon story which are more controversial, or in other words, people have very different opinions on them. For instance, Amazon is known for the very sophisticated way it sets up its company structure in order to do something called tax optimization. Just like people pay tax to the government on their income, companies also pay tax to the government on the money they make. Tax optimization is essentially a legal way of ensuring you pay as little tax as possible – one day maybe we’ll learn more about that on this podcast, because I got stories!! You might not think so, but tax can actually be SUPER interesting! We covered some of it already back in season 6. Go back and check out those episodes if you haven’t already. 

Amazon is very aggressive in its tax optimization, which some people see as good business, while others think it is unethical and everyone should pay their due. The fact is the more money you make, the easier it is to have a really efficient tax setup, because you can afford the experts to advise and maintain it. What do you think? Should everyone pay the same, or is a legal way of paying the minimum possible an ethical choice AND good business? It’s a tricky question!

Thanks for being here. We’ll see you next time on Money with Mak and G!