Jeff Bezos has never been about doing things the typical way. The founder of Amazon.com built his business on unconventional business practices and a management strategy that would confound most business management experts. However, it's an approach that's worked incredibly well for him. After being launched in Jeff Bezos's garage less than 20 years ago, Amazon.com is now the world's largest online retailer. It's a rare case of a company that's shown incredible growth and influence while rarely making a profit—a key aspect of Jeff Bezos' unusual business philosophy. It will be interesting to see how much of that philosophy factors into his latest acquisition, the "Washington Post" newspaper.
Amazon.com is famous—or, to some, infamous—for achieving skyrocketing growth over the past two decades while almost never earning a profit. Jeff Bezos is known for investing heavily in ventures that might not mature for many years. Amazon.com actually reported its first profitable quarter shortly after the burst of the dot-com bubble. Jeff Bezos surprised many by claiming that wasn't his intention: he didn't want Amazon.com to make a profit for a few more years. He was focused on reinvesting the money within Amazon.com for maximum growth.
The technical lack of profits in Amazon.com hasn't hurt the bottom line of Jeff Bezos. One of the world’s richest men, his net worth is estimated at $24 billion. Many industry analysts were surprised when he stepped into the traditional publishing world by purchasing the "Post," one of the nation's largest and most influential newspapers. Jeff Bezos, who acquired the "Post" for $250 million, said he will use the management strategy he learned in building Amazon.com in finding a proper business plan for the paper. The newspaper industry has taken a massive nosedive in the past decade due to the availability of free news over the Internet and the rise of digital advertising.
Jeff Bezos said his main goals are to provide his own perspective to the paper's managing staff and to ensure the financial stability of the "Post" while it experiments with ways to be profitable. Though he'll be active in leading the plans for the "Post," he plans to continue living in Seattle and will remain the chairman and chief executive of Amazon.com.
While the "Post" purchase took many by surprise, especially given the state of print journalism, it makes sense within Jeff Bezos' unconventional business philosophy. He has said that Amazon.com management is "willing to be misunderstood for long periods of time." He prefers to be patient and accept losing money for several years if he believes the long-term investment is worth it. He's also known for an approach that puts customers' needs and desires over everything else. Lots of retailers give lip service to that approach, but Amazon.com truly incorporates that philosophy into everything it does.
Jeff Bezos might not do things the traditional way, but many would point to his unconventional approach as the foundation for the incredible growth of Amazon.com. His principles of growth over profit, long-term investment, and prioritizing the customer have made Amazon.com the worldwide online retailing leader. If anyone can find a way to pump new blood into traditional journalism, it might well be him.
(Photo courtesy of renjith krishnan / freedigitalphotos.net)
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