Amazon Unbound: Jeff Bezos and the Invention of a Global Empire

by Brad Stone

State legislatures recognized that the growing flood of tax-free sales over the internet was depleting their coffers, and they passed legislation requiring online retailers to pay sales taxes, closing a loophole that had been created before the internet age for mail-order companies. Bezos was prepared to fight to protect a significant price advantage over offline rivals, and even backed a California ballot initiative to undo a new state law that would force online retailers to collect sales tax. But in the middle of the fight, he changed course; sales tax avoidance had tied the company in knots, requiring it to limit where it opened facilities and even where employees could travel. By agreeing to collect sales tax, Bezos surrendered his prized advantage. Instead, he took the longer view, making it possible for Amazon to open up offices and fulfillment centers in more populous states, much closer to its customers, laying the groundwork for one of the largest expansions in business history.

Characteristically secretive, Amazon has never revealed the name of the voice artist behind Alexa. I learned her identity after canvasing the professional voice-over community: Boulder-based singer and voice actress Nina Rolle. Her professional website contained links to old radio ads for products such as Mott’s Apple Juice and the Volkswagen Passat—and the warm timbre of Alexa’s voice was unmistakable. Rolle said she wasn’t allowed to talk to me when I reached her on the phone in February of 2021. And when I asked Amazon to speak with her, they declined.

But many Tyto employees were skeptical of his vision for smartphones. No one was sure the 3D display was anything more than a gimmick and a major drain on the phone’s battery. Bezos also had some worrisome blind spots about smartphones. “Does anyone actually use the calendar on their phone?” he asked in one meeting. “We do use the calendar, yes,” someone who did not have several personal assistants replied.

One of Amazon’s first moves in India was to try to entice its two famous alumni back. Four years after striking out on their own, Binny Bansal and Sachin Bansal had built Flipkart into a nationally recognized brand that sold not only books but mobile phones, CDs, and DVDs. Amit Agarwal met his former employees at the upscale ITC Maurya hotel in central Delhi to discuss an acquisition. Feeling confident about their progress, the Bansals asked for $1 billion. Agarwal scoffed at the amount, and the talks fell through. After the Bansals thumbed their noses at Amazon, Agarwal started to build a team to compete against them. He prowled headquarters in South Lake Union, zealously pitching a “once-in-a-lifetime opportunity” to impact Amazon and “change the trajectory” of Indian democracy itself. His target was native Indian Amazonians who understood both the company and the cultural peculiarities and varied languages of the vast Indian market.

In October 2014, a few weeks after Jeff Bezos returned from his first trip to India, former Microsoft CEO Steve Ballmer appeared on the talk show Charlie Rose and threw serious shade at his company’s crosstown rival. “I don’t know what to say about Amazon. I like Amazon. Nice company. [But] they make no money, Charlie! In my world, you’re not a real business until you make some money.” Amazon’s performance at the time seemed to merit Ballmer’s assessment. The company had lost $241 million that year, and over the holiday season it logged its slowest growth in sales since the disastrous days of the dot-com bust. By December 31, 2014, after declining 20 percent over the previous twelve months, Amazon’s market capitalization sat at a meager $143 billion. Which is why 2015 was such a critical year for the company and its CEO: it marked the true beginning of Amazon’s climb toward the lofty altitudes beyond a trillion dollars in market capitalization.

None of those bets had yet borne fruit. But in 2015, an earlier wager finally started to pay off. In its April earnings report, Amazon revealed for the first time the financial health of its ten-year-old cloud business, Amazon Web Services, and shocked Wall Street with its underlying sales growth and profitability. Then in June, Amazon copied a competitor in China and introduced the first Prime Day, capitalizing on a decade of growth from its two-day shipping program. Both Wall Street and the media began to show a newfound interest in Amazon, and shortly after the twentieth anniversary of its launch, the company came under a new kind of scrutiny commensurate with its growing size. That August, an explosive newspaper article in the New York Times turned Amazon’s combative corporate culture into the subject of national attention. Over the course of that eventful year, 2015, Amazon stock more than doubled. Because he owned about 18 percent of the company, Bezos was vaulted into the ranks of the top five wealthiest people in the world, according to Bloomberg’s Billionaire’s Index. It turned out that Steve Ballmer’s broadside against Amazon was a perfect contrarian indicator; it would mark almost precisely the start of one of the most dramatic increases in corporate value and personal wealth in the entire history of capitalism.

In the years after the introduction of its first products in 2006, AWS was used mostly by startups and university labs that needed extra processing power and signed up with a credit card to run their software over the internet on Amazon’s servers. When engineers inside corporations and governments wanted to run their computing experiments via AWS, they often quietly routed around their organizations’ stringent procurement processes. Like many other technology revolutions, cloud computing was first the provenance of geeks, and then spread outward. The first companies to embrace AWS became its beta testers and evangelists. Silicon Valley startups like Uber, Airbnb, Dropbox, and the photo-sharing site SmugMug ran their operations on AWS and could quickly order up more servers as their businesses grew at unprecedented rates. It was one of the greatest enablers of the post-recession technology boom—arguably more important than even the iPhone, though outsiders understood very little about it. NASA’s Jet Propulsion Lab in Pasadena, California, signed up in 2009 and used AWS to store and stream images from the Curiosity Rover on the surface of Mars. “I still have the presentation I gave to colleagues,” said Tom Soderstrom, JPL’s chief technology officer. “They thought I was talking about earth science, literal clouds.”

Even some of AWS’s earliest executives had little sense for cloud computing’s enormous potential. “This business could be really big someday, maybe even $1 billion in revenue,” product manager Matt Garman once told an incredulous fellow Amazon newbie, Matt Peterson, his former business school classmate, over lunch in 2006. “Are you kidding, there is no way this will be a billion dollars. Do you know how big that would be?” Peterson responded. Garman is now an AWS vice president and member of the S-team; Peterson is an Amazon corporate development director; and AWS generated $45.4 billion in sales in 2020.

Nevertheless, that January, Amazon signaled that it would report AWS’s financial results in its quarterly report for the first time, and investors girded in anticipation. Many analysts predicted that AWS would be revealed as just another Amazon “science project”—a lousy, low-margin business that was sapping energy from the company’s more advanced efforts in retail. In reality, the opposite was true. That year, AWS had a 70 percent growth rate and 19.2 percent operating margin, compared to the North American retail group’s 25 percent growth rate and 2.2 percent operating margin. AWS was gushing cash, even as it rapidly consumed most of it to build even more computing capacity and keep up with the fast-growing internet companies like Snapchat that were piling onto its servers. This reporting was a huge surprise for the analysts and investors who monitored and scrutinized Amazon, and likely even a bigger one for Microsoft, Google, and the rest of the enterprise computing world. Analyst Ben Thompson facetiously called that April 2015 earnings report “one of the technology industry’s biggest and most important IPOs.” After the reveal, Amazon’s valuation jumped almost 15 percent in a day, crossing the $200 billion mark for the first time and laying to rest the myth of Amazon as a perpetually money-losing machine.

In 2019, Wulff took a sabbatical from the company and went to visit family in North Carolina. She had grown up with four older brothers, in a family with financial hardships. In an unguarded moment, she used some of that Amazon-style critical feedback on her adored mother, who responded quietly, “Please stop using the leadership principles in our relationship.” As if a heavy fog had suddenly lifted, Wulff started to think about her time at Amazon in a new light. She was grateful for the experience but conflicted about it. She loved the “beautiful collaboration machine,” how she had learned about operational discipline and made lasting friendships. At the same time, she also felt like she had “given more than I got back” and didn’t like who she was becoming as a leader or a person. Wulff started to ask herself: Was the overall impact of Amazon’s customer obsession on local businesses, the climate, and warehouse workers worth it? Why weren’t there more women and underrepresented minorities on the S-team? Why was the work environment so punishing, and why was she perpetuating it? As an Amazonian, she had to earn the trust of her colleagues and superiors every day she had worked at Amazon. Had Jeff Bezos, she wondered, earned her trust?

By that point, the marketplace division was losing its influence on the S-team. Sebastian Gunningham, who had reported directly to Bezos for years, was moved underneath Jeff Wilke, a former peer, after Wilke and Andy Jassy were promoted to CEOs of the retail and AWS divisions in a 2016 company-wide reorganization. In 2018, Gunningham left Amazon and, ruining his streak of working for visionary tech leaders, headed to the ill-fated office-sharing startup WeWork.

UPS and FedEx tried to mitigate Amazon’s corrosive effects by levying surcharges and capping its use of their air freight networks over the holidays. Amazon executives didn’t appreciate that. Four employees from that time told me they heard Clark and other senior Amazon executives gripe about FedEx and say that its founder, Fred Smith, “surrounds himself with sycophants and has completely off-the-charts arrogance.” The obvious irony, even to Clark’s employees, was that this could describe Amazon’s senior leaders too.

In the year after the Bezos-Sanchez tabloid melee, Amazon continued its dazzling ascent. With its market value drifting ever closer to the $1 trillion troposphere, the company announced that it would upgrade its shipping guarantee for U.S. members from two days to one, further strengthening the case for shopping online. Following the finalization of his divorce from MacKenzie in July 2019, Bezos’s personal net worth had dropped from $170 billion to $110 billion. Yet such was the buoyancy of Amazon’s stock price that he retained the title of richest person alive and recovered all of that surrendered ground within twelve months. His personal wealth was larger than the gross domestic product of Hungary; larger than even the market capitalization of General Motors.

Still, none of the perennial challenges in India or elsewhere seemed to impede Amazon’s overall business performance. On January 30, after Bezos returned to the U.S., the company announced a gangbuster holiday financial report. The move to deliver packages to Prime members the day after they ordered, instead of two days, had turbocharged sales, and the continued strength of AWS and durable bounty of advertising, the gold mine in the backyard, had minted $3.3 billion in profit, well above Wall Street’s expectations. Amazon also announced that there were 150 million Prime members worldwide, up from 100 million two years before, and that it employed around eight hundred thousand people, solidifying its position as the second largest private employer in the U.S., behind only Walmart. In the wake of the quarterly earnings announcement, investors bid up Amazon’s stock; its market capitalization leapt over the magical threshold of a trillion dollars and a few weeks later, finally remained there for good. It almost felt like the whole story could have ended right here, with Jeff Bezos worth an astounding $124 billion and Amazon’s aura of invincibility looking more impervious than ever. But it was at this exact moment executives got their first glimpse of the mythological black swan—the rare and unforeseen calamity—spreading its wings over the charred landscape that would soon describe the year 2020.

Bezos remained consumed with identifying promising new business opportunities that could significantly improve his company’s already robust fortunes. He also continued to cede more authority over the older divisions to key deputies, like Andy Jassy and Dave Clark. And on February 2, 2021, in a historic announcement, Amazon disclosed that he would also cede something else: his job as CEO. Atop its quarterly financial report, the company announced that later in the year, Bezos would transition to executive chairman and hand over the chief executive role to Jassy, the longtime leader of AWS, who long ago was his first full-time technical advisor. The move heralded a formal changing of the guard at Amazon and the evident end of one of the most epic runs in modern business history. Over the course of two and a half decades, Bezos had taken an idea to sell books on a new medium called the Web, and through invention, the unencumbered embrace of technology, and the ruthless pursuit of leverage, spun it into a global empire worth more than one and a half trillion dollars.

But with its fourteen sacrosanct leadership principles, interlocking business units, and overwhelming momentum, Bezos had seemingly set up Jassy and the company to flourish well after he stepped aside. In this respect, his life’s work, at Amazon at least, was arguably done. Still looming, of course, was a definitive answer to a perennial question that even now is almost impossible to resolve: Is the world better off with Amazon in it? Or perhaps, in the wake of Amazon’s evolution into a trillion-dollar empire and Jeff Bezos’s graduation into the annals of business history, it simply no longer makes sense to ask. The company is now woven inextricably into our lives and communities, hooking customers on the convenience of ordering from home and posing insurmountable challenges for all but the nimblest local retailers. It calls to mind Bezos’s old saying about one-way and two-way doors, and “type one” irreversible decisions. Long ago, we stepped through a one-way door and into the technological society conceived of and built in large part by Jeff Bezos and his colleagues. Whatever you think about the company—and the man—that controls so much of our economic reality in the third decade of the twenty-first century, there is no turning back now.