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You tell him that you’re planning to spend years, or really decades, building up technological infrastructure and warehouse capacity, focusing relentlessly on customer experience — you’ll even call the company “Relentless.com” to capture that ferocious customer-centricity. Sure, you’ll have to discount prices to gain market share, and take a hit on delivery, but in time you’ll have the phenomenal scale to sell “Anything?…?with a capital ‘A’?” — to everyone. You’ll be “earth’s biggest store.”
The VC stirs a bit. When he asks you for some hard-number projections, you don’t bat an eye: You and your investors will bleed cash, of course, before you go public. Then you’ll lose gobs more, going 17 straight quarters in the red. You’ll be in the hole about $3bn in your first nine years as a going concern — and when you do eventually turn a profit, the margins will be razor thin for a decade or more, averaging about 2 percent.
As elevator pitches go, this one would almost certainly end on the first floor. Except it didn’t. The story of Amazon.com — Jeff Bezos did indeed toy with the name “Relentless.com” before changing his mind (Go ahead: Type it in your browser) — is now engraved into the corporate mythos. The backer was the legendary John Doerr of Kleiner Perkins, who invested an initial $8m in the company in 1996, and who three years later would back another ludicrously ambitious startup called Google.
What Doerr saw in Bezos (and in Larry Page and Sergey Brin, for that matter) wasn’t just a grand business vision but also the maniacal tenacity to see it through. Others saw it too: In 1999, Morgan Stanley analyst Mary Meeker, a prominent Amazon bull on Wall Street, brushed off concerns of the company’s “aggressive” investment in its infrastructure, calling the strategy “rational recklessness.” Bill Miller, the former Legg Mason fund manager whose 15-year market-beating streak remains unmatched, invested early and heavily in Amazon — and then doubled down on the stock as it careened from triple digits to six bucks a share (after 9/11) and up again. It’s now trading above $1,600, a 106,669-percent gain over the split-adjusted closing-day price of its 1997 IPO.
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