Jeff Bezos is undoubtedly one of the wealthiest people in the world but he wasn’t always a billionaire. You see, he had a rough beginning. Let’s take a look at Jeff Bezos’s rags to riches story and see what we can learn from his massive success.
Let’s go.
Table of Contents
Early Life
- Birth
Jeff Bezos was born on January 12, 1964, in Albuquerque, New Mexico, to a 17-year-old high school student.
His mother sold various household appliances just so that she could move into an apartment with Jeff alone.
- Name change
Jeff’s mother later remarried Mike Bezos hence why his name was changed to Jeffrey Preston Bezos from Jeffrey Preston Jorgensen.
- Early signs of genius
Bezos would invent things in his garage such as an alarm clock that would stop his siblings from entering his room.
Perhaps that was one of the earliest signs of Bezos’ intelligence. Bezos was accepted into a gifted program at his elementary school.
- School life
School was easy for Bezos. He was the nerdy kid in class that thankfully, most kids liked. As proof, Bezos graduated as a valedictorian at his high school.
- A job at McDonald
At 16, he was hired at a McDonald’s in Albuquerque as a line cook (but at first a window washer) making $2.69 an hour which is roughly $9.44 in today’s money.
It wasn’t good money but it was where he got the idea of automation and became interested in customer relations. It was also at this job that Bezos discovered how vital it is to stay focused on one thing at a time.
He worked at Mcdonald’s all throughout his high school years.
- Princeton University
Jeff got accepted into Princeton and studied electrical engineering and computer science. By the time he graduated he had multiple offers from big companies such as Intel and Nokia waiting for him but he turned them down to work for a startup called Fitel.
- Work
Jeff later switched to another job with the intention to learn in mind. He was less concerned about the money than about what he could learn from his jobs.
Nevertheless, his new job paid well and he ended up learning about the HR process, how to find and hire the most suitable person for the job, etc.
The history of Amazon
- The .com boom and idea seeds
At the beginning of the .com boom, Bezos took notice of how web usage was going up by 2300% from year to year and he decided that there was money to be made and he needed to figure out what business he should pursue.
- Landing on an idea
Jeff decided to sell books online because he said there were more items in the category of ‘books’ than there were in other categories.
- Informing his boss of his plan
Bezos had a boss that he admired and he told his boss that he was thinking about quitting his job and starting a business selling books online.
His boss took him on a walk and told him “That sounds like a really good idea, but it would be an even better idea for someone who didn’t already have a good job.”
- Quitting his job
Jeff agreed to think about it for another 48 hours before quitting his job and moving across the country with his wife (of one year at that point) to start a new company.
Bezos didn’t have trouble convincing his wife that it was the right thing to do because his wife agreed right off the bat.
- Investment from his parents
Bezos’s company was named Cadabra and he later changed it to Amazon 3 months later.
Jeff had his parents invest $300,000 which was their life-saving at the time.
Bezos told them that there’s about a 70% chance he’d fail and they’d lose all their money but they went ahead anyway.
- Amazon’s beginning
In 1994, when Jeff was 30 years old, he started the company with 10 people (Him being the boss) and they didn’t even have a packing table at that point yet. Everything was done on the floor and the logistics were a mess.
- Initial success
It was a shock when the orders came in from 30 states and 45 various countries within the first 30 days.
Bezos’s wife Mackenzie was responsible for accounting despite having no knowledge of it at the time.
For the first year, Amazon.com was fueled solely by word of mouth. There was no advertising or media coverage at all.
It was after its initial success that Bezos got 22 more investors interested and they pulled together 1 million to invest in the company.
- IPO and millionaire status
In 1997, 3 years after Amazon was founded, Jeff took Amazon public and each share was trading at $1.73 USD at the time. Today, the same share is worth over $2500.
The IPO raised $54 million for Amazon and Jeff became a millionaire at the age of 33.
- Billionaire status
Two years later, at the age of 35, Bezos received the billionaire status with a networth of 10.1 billion at the time.
It took only 5 years for Bezos to become a billionaire after starting Amazon.
- Further efforts
Later on, Jeff would email his customers and ask them what they want to see selling on Amazon and one of the responses was windshield wiper blades.
Jeff decided that they would sell anything the customers wanted and they expanded the store to include toys and other categories.
- The Dotcom bubble burst
Despite the success, Bezos stayed humble and still drove his old car. Perhaps it was the right move because soon, Bezos’s company was about to take a huge hit during the dot com bubble burst.
Amazon’s stock dropped from $113 to $6 and many were panicking.
Bezos’ networth also dropped from 10.1 billion in 1999 to 1.5 billion in 2002.
Bezos at the time was adamant that things will look good again since things within the company were going right. They were moving faster and there were new innovations made. Still, they had to lay off 14% of employees.
Jeff saw it as an opportunity to learn rather than a failure. He pushed on knowing full well that even though the stock was going the wrong way, everything within the company was going the right way.
- Stock returning
2 years later, in 2004, Amazon’s stock went up by about 500% to around $50.
- New innovations
By 2006, after the introduction of many new innovations from Amazon such as Amazon Kindle, Jeff’s networth rose to $8 billion.
By the way, if you want to find out how to self-publish books on Amazon’s KDP for free and make money, click here.
- Blue Origin (Bezos’s other company)
Bezos first started Blue Origin in 2000 but he had kept a low profile on it until around 2006 when it made financial sense to take it more high profile.
Blue Origin is a company that serves similar functions and goals as Elon Musk’s SpaceX. Both companies aim to send humans to space.
Jeff explained in an interview that Blue Origin’s vision is millions of humans living and working in space.
The company bought lands in Texas for testing and building its rockets.
- Amazon’s continual growth
Amazon saw impressive growth year by year and by 2013, Bezos was worth $29 Billion dollars.
At this point in history, Amazon had become the largest online retailer in the world and Bezos had become the 19th richest person in the world.
- The Washington Post
In 2013, Jeff bought Washington Post an online newspaper company for 250 million and it turned out to be the right move although not many agreed at the time.
You see, the online newspaper wasn’t really a huge thing back in 2013, and just like how Bezos foresaw the potential of an online bookstore before the market was fully in, Jeff saw the future of newspaper as being mostly digital.
In 2015, The Washington Post brought in $107 billion in revenue.
- Richest person in the world
Jeff overtook Bill Gates as the richest man in the world with a networth of $112 billion dollars in 2018.
In 2019, Jeff’s networth rose and reached $131 billion.
And in 2020, Jeff’s networth was at $182 billion.
In January 2021, Musk overtook Jeff as the richest person in the world in January of 2021.
Marriage and family
Jeff had his friends set up many blind dates most of which didn’t go well. Eventually, Jeff met Mekensie Scott. Within 3 months, they were engaged, and after 6 months of first meeting each other, they were married in 1993.
The couple has 4 kids 1 of which was adopted from China.
Bezos kept his kids’ lives very private so we don’t know a whole lot about them.
In 2019, Bezos’ marriage with Mekensie ended since photos surfaced that Jeff cheated on his wife.
Where is Jeff now?
Jeff is currently worth $133 billion and his company Amazon is currently evaluated at $1.1 trillion.
In 2021, Jeff stepped down as the CEO of Amazon and in its place, the current CEO of Amazon is Andy Jassy.
What made Jeff so successful?
Below are some analyses I’ve done on what made Jeff so successful. These surely aren’t the only reasons but they definitely impacted Jeff’s success.
1. Jeff’s intelligence played a role
There are several reasons why Jeff was so successful. One of the reasons was his intelligence.
Jeff was admitted to a gifted program as a kid and he built stuff in his garage without anyone’s guidance. He also did well in school (although you could do poorly in school despite being smart too). Jeff Bezos was undoubtedly a smart kid growing up.
He also managed to graduate from Princeton with an electrical engineering and computer science degree.
Despite the fact that there are plenty of people who didn’t do well in school, wouldn’t be considered smart by any standard and still managed to become rich, believe it or not, studies have shown that IQ is positively correlated with networth. Read the paper here.
Keep in mind, that some factors in life can increase a person’s chance of acquiring a higher networth (such as being born to rich parents who can lend you a “small loan” of $1 million dollars) and not everyone with a higher networth is smarter than those with a lower networth but there is a correlation between intelligence and income/networth.
People who score high on one measure of intelligence (ex. interpersonal intelligence) tend to score high on the other (ex. spatial intelligence) as well.
Here are different types of intelligence:
- Logical-mathematical (logic, math smart)
- Verbal-linguistic (language, word smart)
- Interpersonal (people smart)
- Bodily-kinesthetic (body smart)
- Musical (music smart)
- Visual-spatial (visual smart)
- Intrapersonal (self smart)
- Naturalistic (nature smart)
Those who score high on one area of intelligence tend to score high on the other as well. We call it, “general intelligence” or “g”.
Jeff’s intelligence might have helped him through hard times. When others couldn’t see the solution to the issue, he might’ve easily been able to.
If you aren’t particularly smart, not all hopes are lost. You may just have to work harder to get to where someone could spend 10 fewer hours getting to.
Using your intelligence as an excuse to not do something is one of the surest ways to not live up to your potential.
There are smart people who worked their whole lives as a cashier and those who aren’t the smartest but managed to become multi-millionaires.
Point is, that being intelligent can certainly help you become rich. Read this article on how 45% of billionaires belong to the smartest 1%, but it isn’t the only factor at play.
You can still become successful despite not being the smartest cookie in the cupboard.
2. Jeff placed importance on learning over earning money
You’ll notice a theme again and again in Jeff’s early career.
Jeff would take a job where he could learn more rather than wherever he could make more.
It’s with this mindset that Jeff developed many skills he would use to build his company up from scratch.
So at your next job, instead of asking how much you may earn, you may want to ask yourself, what can you learn?
3. Jeff obsessed over customer satisfaction rather than competition
Jeff was obsessed with customer satisfaction. Instead of obsessing over his competition, he was obsessed with improving his business according to his customers’ needs.
For those of you with a business, your priority should be on how you can make it better for the customers rather than what your competitors are doing.
4. Family’s support
Jeff wouldn’t be here today if it wasn’t for his family’s support. In fact, his parents invested the initial $300k into his business knowing that there was a 70% chance he would fail and they would lose their life savings.
Jeff’s wife immediately agreed on quitting his well-paying job and moving across the country to start a company from the ground up while not knowing what the internet was.
Mackenzie is known for being smart so her move to agree was purely out of love than impulsivity.
Jeff has also credited his family for his success during some of his interviews.
You can’t choose your birth family but you can choose your partner and friends.
Choosing the right people in your life can propel you to success and choosing the wrong people in your life will curse you for life.
5. Jeff reinvested the money he made
Jeff reinvested the money he made from his business back into Amazon.
Rather than taking the money and buying a yacht, he focused on expanding the business and that’s how he was able to overtake other online retailers as the biggest retailer in the world within a few short years.
The same story can be seen in Walmart which overtook other companies in the space because they reinvest the profit on better machinery and to design a faster system.
Moral of the story? Reinvest the money into your business. Don’t get too comfortable. Always seek to improve and innovate so you can stay ahead.
6. Jeff sought opportunities where others missed it
Jeff had realized the potential of an online retail store that sells books before others saw it.
There were those who thought that the internet was a fad but how wrong were they?
Jeff also realized how the online newspaper was quickly overtaking every aspect of the traditional newspaper agency so he bought up The Washington Post and fixed it up.
Learn to recognize opportunities. Oftentimes the best opportunities are right in front of our eyes but others are too afraid to pull the trigger.
You can’t avoid risk completely so learn to manage it.
7. Jeff practiced the regret “minimization framework”
Jeff knew there was a chance to lose it all at any moment. He knew the risk he was taking on when he quit his well-paying job on Wall Street. He knew the risk when his parents gave him the $300k seed money.
Still, he pushed on.
Jeff practiced what is known as the “Minimization framework”.
It was right around his 30th birthday that he began to wonder what he really wanted out of life (because surely it wasn’t that high-paying but soul-crushing corporate job).
If you want to read the 8 reasons why you should be your own boss, click here.
Jeff decided that he was going to live with as little regret as he could manage. Jeff said that we often regret the action we didn’t take more than the action we did take that resulted in failure.
If you want to think like Bezos in this aspect, you have to think about what you want out of life.
Do you want to start a business? Why don’t you? Worry about failing? What if you succeed instead? (By the way, if you want to find out how you can overcome the fear of starting a business, click here).
Do you want to go back to school and change your career? Why don’t you? Worry that you’re too old? But you’re going to get old anyway. Might as well get a career you really want out of it.
Do you want to ask a girl out on a date? Why don’t you? Worry about being rejected? What if she’s as interested in you as you are in her?
What can you learn here? Well, you should try to minimize the regret you may have on your deathbed by doing what you want to do. You can still be afraid but do it anyway.
Final thought
I find Jeff Bezos’s story inspiring. I hope you do too.
I’m not looking at how likable Jeff’s personality is or any other aspect of him as a person including what he did.
What I am looking at here is a person who worked hard and persevered despite various setbacks.
With his attitude, even if he wasn’t a genius, I’m sure he would’ve seen some form of success as well.
Truth be told, there is plenty of money to be made in the world, and especially in today’s internet age, it’s even more possible than before to build wealth.
You need to seek new opportunities perhaps in places others are too afraid to act.
You need to persevere, like Jeff did, there is no overnight success.
You need to find supportive partners and friends who will help you achieve your goals.
You need to reinvest your profit back into what you started.
You need to practice regret minimization. Be afraid but do it anyway.
Good luck!
