Surfing the Amazon (or e-business 101)

"Work hard, have fun, make history." -Jeff Bezos

If you are thinking about starting up your own e-business and need some inspiration or ideas what better place to start than the top. Amazon.com was and is an amazing success story, if we follow the history of the company and look at what procedures the founder, Jeff Bezos, put into place we'll have some pretty rock solid foundations on which to build a stable and profitable e-business of our own.

The story goes that Jeff Bezos wrote the business plan for Amazon.com in 1994. He did so whilst driving across the US from New York to Seattle, his wife behind the wheel as he tapped out the business plan on his laptop.

From what I could gather there are suggestions that Bezos never had a business plan but just "tinkered" with the idea for the first year the company was in business. Although the business plan for Amazon is touted as revolutionary, some journalists have doubted the early existence of the plan.

Note to self: Regardless whether Bezos had a plan to begin with he did write a business plan eventually. All businesses, large or small, should have a business plan to strategise where they intend going over the next four to five years.

Bezos did do his research though. He decided that before he could revolutionize the book business he had to learn something about it. So, in September 1994, he attended an introductory four-day course (in Portland, Oregon) on bookselling that had been sponsored by the American Booksellers Association. Interestingly, the course covered topics like "Developing a Business Plan", "Selecting Opening Inventory", "Ordering, Receiving, Returning" and "Inventory Management".

Note to Self: Research is an essential element to any business plan. Find out what the competitors are doing, what type of money is being spent in the market you are aiming for and by what target audience.

Bezos devised a Multimedia Marketing push that became a virtual blueprint for Internet Retailing. He peppered the airwaves and consumer magazines with amusing, self-effacing ads; established a ubiquitous presence on web sites (both big and small) to attract web shoppers, and to give consumers a satisfying, convenient shopping experience, unparalleled online or off. One element of this marketing push was the "branding" of the name Amazon.com. It became a common sight on the Internet, almost overnight. There are now more than 60,000 other web sites linked to Amazon.com. It is also, important to note that none of this was "paid" marketing, just word of mouth marketing.

Note to Self: Marketing will make or break an e-business. Viral marketing is a top idea for getting your site name "out there".

Bezos made a list of products that could be sold on the Web. Settling on books because of the relative absence of huge competitors and the sheer number of titles in circulation. He quit his job as a senior vice president at a Wall Street hedge fund and made the famous drive westward with his wife. At the time, he didn't even know where to tell the movers to ship his furniture. Eventually, he settled on Seattle because of its proximity to the Roseburg, Oregon, warehouse of book-distribution giant Ingram. Before the truckload of his belongings had arrived, he and four software designers had set up shop in his garage to create the foundations of their company's Web site.

Note to Self: Define, very early on, the span of products/services to be sold and don't forget to research your competitors.

Before "opening" its doors for business on the Internet Bezos and his team spent a year developing database programs and creating the web site, which sells books, music and videos on the Internet.

Note to Self: E-businesses don't happen "overnight". A lot of time needs to be spent defining and developing the site.

"First of all, you have to remember that originally, we did not expect to ever be in the position that we find ourselves in today. Four years ago when we were working in my garage in Bellevue, we expected that selling books online, the odds-on bet was that that wouldn't work. I told all of our original investors that they would lose their money for sure." Bezos, J.

Bezos apparently raised $300,000 in the first round of financing, mainly from friends and relatives. He then raised another $700,000. Then, once up and operating and growing very rapidly, $8 million was raised from Kleiner Perkins. Amazon.com was incorporated in July of '94, and the $8 million was not raised until May of '96.

Note to Self: Financing is important. Time and research needs to be done to acquire such financing.

Summary:

So what have we learnt from Jeff Bezos:-

1. Have a business plan.
2. Research.
3. Choose your marketing carefully.
4. Define your product span and Research again.
5. Plan your website carefully.
6. Get your business plan to future investors.

About the teacher:
Julie is a native of Perth, Australia who began her computer career back in 1980 as a system support specialist and has seen many changes come and go since her early days in the industry. Julie finally ended up as a core instructor in the CTOS/UNIX environment before leaving it all behind to take on the more demanding job of parenthood, with her daughter, Madeleine. After a few years off work Julie decided she needed to brush up her skills so she studied for and obtained a Bachelor of Science Degree in Interactive Multimedia Technologies. When not keeping busy with her Cyber Aspect activities and assisting at Website Designs, she can usually be found taking care of Madeleine, reading a book, listening to music, or updating her Web site.