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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

August 8, 2013 at 10:47 AM

Bezos the businessman, a primer CEO Jeff Bezos (Photo by Andy Rogers / The Associated Press) CEO Jeff Bezos (Photo by Andy Rogers / The Associated Press)

NOAA reported that Arctic sea ice is disappearing at an unprecedented rate, but the story that has dominated the week’s news is the purchase of the Washington Post by Jeff Bezos, the head of In the news business, we love to write about ourselves and this is indeed an important turning point. In addition, we’re dealing with the self-centered and blithely corrupt place rendered with wicked accuracy in Mark Leibovich’s new book, This Town. Two of the best pieces come from Pulitzer Prize-winner David Cay Johnston and an open letter to Bezos by Kara Swisher of All Things D. But this is more than a media story or a D.C. tale. So here is a primer for the Other Washington about the Seattle titan who is suddenly much a part of its life, based on my years of Amazon watching and what sources have told me.

1. Bezos is a data guy. It was data that caused him to see both the coming exponential growth of online retail and the niche for selling books online. And everything from there has been founded on his genius for seeing through the noise and identifying the right metrics. Among his critical insights has been using customer data to build relationships and brand loyalty. This makes him brilliant at turning vision into execution, the rocks upon which many good ideas by other entrepreneurs have been smashed.

2. Bezos knows Wall Street. Before driving west to found Amazon, he worked for the hedge fund D.E. Shaw (former Treasury Secretary Larry Summers is another alum). He knows how the playerz and investors think. So even though Amazon has razor-thin margins in many areas and keeps turning in disappointing profits, Bezos has persuaded investors of a big payoff to come. The stock has responded accordingly.

3. He’s a tech guy. Everything Bezos does, including at Amazon, has a super geek quality to it. Technology — making leaps and leveraging the advanced systems already available — is behind everything Amazon does, from its own sales and providing a platform for other sellers to cloud computing and fighting IBM, the embodiment of the establishment, over a contract with the CIA worth as much as $600 million. When most Americans think of Seattle and technology, they think of Bill Gates. Today, Jeff Bezos is the leading tech visionary in town, and perhaps, with the death of Steve Jobs, in America.

4. He’s a supply chain guy. Amazon uses the 10,000-mile supply chain of globalization with great expertise. In addition, it is building its own massive supply chain in the United States with distribution centers, ever-faster delivery, and preparing to expand its convenient Amazon Fresh grocery delivery service. Big and granular — that’s Bezos. Delivering the product, whether in physical form or digitally, faster, better, smarter and cheaper is critical.

5. He is not an “online retailer.” That’s so 2004. Instead, Bezos is building a 21st century conglomerate. Unlike its clunky predecessors (steel and insurance!), has employed its “get big fast” strategy in organic and connected ways. Retail is now only part of the company and its future. See No. 3 above.

6. Don’t misunderstand his patience. True, Bezos has shown a welcome willingness to build for the long term rather than dance to the tune of quarterly earnings looting. But nobody who works for him, whether in an executive capacity or in the grueling warehouse jobs at “fulfillment centers” would consider him a patient person. Bezos is an empire builder, a man in a hurry, and so far he has made few stumbles — and is quick to jettison mistakes. He is into wealth creation, not mere short-term profits. So he employs a strategic patience, after his fashion. Behind it, always, is getting bigger, becoming more dominant. He is a demanding boss and can be a micromanager.

7. He’s a word guy. Not only does he read newspapers, but he prefers concise memos to PowerPoint presentations. His wife is the novelist Mackenzie Bezos. This is an unusual grounding for a technologist and a welcome one. At the Washington Post, perhaps he will see the newsroom not as a cost center, but as the news organization’s most important intellectual property. That doesn’t mean they will have an easy time. See No. 6 above.

8. He is careful with his image. Bezos rarely talks to journalists. He’s not out evangelizing at every trade show or analyst conference call. He almost seems a throwback to the era when a gentleman wants to see his name in the newspaper only when he marries and dies. But this also is a calculated way to maintain the Amazon mystique. He talks to the right people, those with influence. When he does give speeches, he’s funny and charismatic. But never overexposed. Mystery is useful when your stock is closing in on $300 a share.

9. He’s an opportunist, admire it or hate it. Or maybe he’s just a realist. Bezos spent years fighting collecting sales taxes, using Amazon’s tax advantages to beat the brains out of independent and chain bookstores (and, yes, they all sell my novels). This even though tax-supported research laid the foundation for the Internet upon which Bezos’ business depends. Then, when the time was right, he made peace over the tax issue — but to his advantage. Similarly, in a world of giants, he wants Amazon to be the biggest. Wal-Mart? It may already be in Amazon’s rearview mirror. Whether this world of cartels and monopolies is good for the public interest or adds to inequality is not his problem. He has an invaluable skill of a CEO: He sees the world as it is, not as he wishes it to be — then presses for advantage.

10. As you might have read in the Seattle Times series Behind the Smile, Bezos and Amazon are not traditional civic stewards. This is a very big deal in Seattle, which has thrived in part by the willingness of its billionaires and big companies to give back. On the other hand, he has placed the headquarters of one of the world’s most important companies in South Lake Union, adjacent to downtown (built by Paul Allen’s Vulcan). If this isn’t a civic gift, I don’t know what is. But it is imminently practical, helping attract young talent to an energetic city. Classic Bezos.

And Don’t Miss: So why is the administration trying to look a smidge more aggressive going after banks? | Naked Capitalism

Today’s Econ Haiku:

Muni bond jitters

Are imported from Detroit

Driving the market




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