The Everything Store: Jeff Bezos and the Age of Amazon

by Brad Stone

  Jorgensen says that he always wanted to reconnect with his son—whatever his occupation or station—but he blames himself entirely for the collapse of his first marriage and is ashamed to admit that, all those years ago, he agreed to stay out of his life. “I wasn’t a good father or a husband,” he says. “It was really all my fault. I don’t blame Jackie at all.” Regret, that formidable adversary Jeff Bezos worked so hard to outrun, hangs heavily over the life of his biological father.

  When I left Jorgensen and his wife after dinner that night, they were wistful and still in shock and had decided that they weren’t going to tell Linda’s sons. The story seemed too far-fetched.

  But a few months later, in early 2013, I got a phone call from the youngest son, Darin Fala, a senior project manager at Honeywell who also lives in Phoenix and who spent his teenage years living with Jorgensen and his mother.

  Jorgensen, Fala told me, had called a family meeting the previous Saturday afternoon. (“I bet he’s going to tell us he has a son or daughter out there,” Fala’s wife had guessed.) In dramatic fashion, Jorgensen and Linda explained the unlikely situation.

  Fala described the gathering as wrenching and tear-filled. “My wife calls me unemotional because she has never seen me cry,” Fala says. “Ted is the same way. Saturday was the most emotion I’ve ever seen out of him, as far as sadness and regret. It was overwhelming.”

  Jorgensen had decided he wanted to try to reach out to the Bezos family and reestablish contact, and Fala was helping him craft his letters to Bezos and his mother. They would send those letters via both regular mail and e-mail in February of 2013, and would end up waiting nearly five months for a response. Bezos’s silence on the topic of his long-lost biological father is unsurprising: he is far more consumed with pressing forward than looking back.

  During the phone call, Fala related a discovery of his own. Curious about Bezos, he had watched several clips on the Internet of the Amazon CEO being interviewed, including one from The Daily Show with Jon Stewart. And Fala was startled to hear Bezos’s notorious, honking laugh.

  It was the same unrestrained guffaw that had once echoed off the walls of Fala’s childhood home, though over the past few years it had gradually been inhibited by emphysema. “He has Ted’s laugh!” Fala says in disbelief. “It’s almost exact.”

  * * *

  Bezos undoubtedly received and read Jorgensen’s e-mail—colleagues say that, with his personal assistants, he reviews all the messages sent to his widely known e-mail address, jeff@amazon.com. In fact, many of the more infamous episodes inside Amazon began with unsolicited e-mails from customers that Bezos forwarded to the relevant executives or employees, adding only a question mark at the top of the message. To the recipients of these e-mails, that notation has the effect of a ticking time bomb.

  Within Amazon, an official system ranks the severity of its internal emergencies. A Sev-5 is a relatively inconsequential technical problem that can be solved by engineers in the course of the workday. A Sev-1 is an urgent problem that sets off a cavalcade of pagers (Amazon still gives them to many engineers). It requires an immediate response, and the entire situation will later be reviewed by a member of Bezos’s management council, the S Team.

  Then there’s an entirely separate kind of crisis, what some employees have informally dubbed the Sev-B. That’s when an e-mail containing the notorious question mark arrives directly from Bezos. When Amazon employees receive one of these missives, they drop everything they are doing and fling themselves at whatever issue the CEO is highlighting. They’ve typically got a few hours to solve the problem and prepare a thorough explanation for how it occurred in the first place, a response that will be reviewed by a succession of managers before the answer is presented to Bezos himself. The question mark e-mails, often called escalations, are Bezos’s way to ensure that potential problems are addressed and that the customer’s voice is always heard inside Amazon.

  One of the more memorable recent episodes at Amazon began with such an escalation in late 2010. It had come to Bezos’s attention that customers who browsed—but didn’t buy—in the lubricant section of Amazon’s sexual-wellness category were receiving personalized e-mails promoting a variety of gels and other intimacy facilitators. Even though the extent of Bezos’s communication to his marketing staff consisted of a single piece of punctuation, they could tell—he was pissed off. Bezos believed the marketing department’s e-mails caused customers embarrassment and should not have been sent.

  Bezos likes to say that when he’s angry, “just wait five minutes,” and the mood will pass like a tropical squall.1 When it comes to issues of bungled customer service, though, that is rarely true. The e-mail marketing team knew the topic was delicate and nervously prepared an explanation. Amazon’s direct-marketing tool was decentralized, and category managers could generate e-mail campaigns to customers who had looked at certain product categories but did not make purchases. Such e-mails tended to tip vacillating shoppers into buying and were responsible for hundreds of millions of dollars in Amazon’s annual sales. In the case of the lubricant e-mail, though, a low-level product manager had clearly overstepped the bounds of propriety. But the marketing team never got to send this explanation. Bezos was demanding a meeting to discuss the issue.

  On a weekday morning, Jeff Wilke, Doug Herrington, Steven Shure (the vice president of worldwide marketing and a former executive at Time Inc.), and several other employees gathered and waited solemnly in a conference room. Bezos glided in briskly. He started the meeting with his customary “Hello, everybody,” and followed that with “So, Steve Shure is sending out e-mails about lubricants.”

  Bezos didn’t sit down. He locked eyes with Shure. He was clearly fuming. “I want you to shut down the channel,” he said. “We can build a one-hundred-billion-dollar company without sending out a single fucking e-mail.”

  There was an animated argument. Amazon’s culture is notoriously confrontational, and it begins with Bezos, who believes that truth springs forth when ideas and perspectives are banged against each other, sometimes violently. In the ensuing scrum, Wilke and his colleagues argued that lubricants were available in grocery stores and drugstores and were not, technically, that embarrassing. They also pointed out that Amazon generated a significant volume of sales with such e-mails. Bezos didn’t care; no amount of revenue was worth jeopardizing customer trust. It was a revealing—and confirming—moment. He was willing to slay a profitable aspect of his business rather than test Amazon’s bond with its customers. “Who in this room needs to get up and shut down the channel?” he snapped.

  Eventually, they compromised. E-mail marketing for certain categories such as health and personal care was terminated altogether. The company also decided to build a central filtering tool to ensure that category managers could no longer promote sensitive products, so matters of etiquette were not subject to personal taste. E-mail marketing lived to fight another day.

  The story highlighted one of the contradictions of life inside Amazon. Long past the era of using the editorial judgment of employees to drive changes to the website, the company relies on metrics to make almost every important decision, such as what features to introduce or kill. Yet random customer anecdotes, the opposite of cold, hard data, also carry tremendous weight and can change Amazon policy. If one customer has a bad experience, Bezos often assumes it reflects a larger problem and escalates the resolution of the matter inside his company with a question mark.

  Many Amazon employees are all too familiar with these fire drills and find them disruptive. “Why are entire teams required to drop everything on a dime to respond to a question mark escalation?” an employee once asked at one of the company’s all-hands meetings, which by 2011 were being held in Seattle’s KeyArena, a basketball coliseum with more than seventeen thousand seats.

  “Every anecdote from a customer matters,” Jeff Wilke answered. “We research each of them because they tell us something about our metrics and processes. It’s
an audit that is done for us by our customers. We treat them as precious sources of information.”

  Amazon styles itself as highly decentralized and promises that new employees can make decisions independently. But Bezos is capable of stopping any process dead in its tracks if it creates a problem for even a single customer. In the twelve months after the lube crisis, Bezos made it his personal mission to clean up the e-mail channel. Employees of that department suddenly found themselves in the hottest possible spot at Amazon: under the withering eye of the founder himself.

  Despite the scars and occasional bouts of post-traumatic stress disorder, former Amazon employees often consider their time at the company the most productive of their careers. Their colleagues were smart, the work was challenging, and frequent lateral movement between departments offered constant opportunities for learning. “Everybody knows how hard it is and chooses to be there,” says Faisal Masud, who spent five years in the retail business. “You are learning constantly and the pace of innovation is thrilling. I filed patents; I innovated. There is a fierce competitiveness in everything you do.”

  But some also express anguish about their experience. Bezos says the company attracts a certain kind of person who likes to pioneer and invent, but former employees frequently complain that Amazon has the bureaucracy of a big company with the infrastructure and pace of a startup, with lots of duplicate efforts and poor communication that makes it difficult to get things done. The people who do well at Amazon are often those who thrive in an adversarial atmosphere with almost constant friction. Bezos abhors what he calls “social cohesion,” the natural impulse to seek consensus. He’d rather his minions battled it out in arguments backed by numbers and passion, and he has codified this approach in one of Amazon’s fourteen leadership principles—the company’s highly prized values that are often discussed and inculcated into new hires.2

  Have Backbone; Disagree and Commit

  Leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting. Leaders have conviction and are tenacious. They do not compromise for the sake of social cohesion. Once a decision is determined, they commit wholly.

  Some employees love this confrontational culture and find they can’t work effectively anywhere else. The professional networking site LinkedIn is full of executives who left Amazon and then returned. Inside the company, this is referred to as a boomerang.

  But other escapees call Amazon’s internal environment a “gladiator culture” and wouldn’t think of returning. There are many who last less than two years. “It’s a weird mix of a startup that is trying to be super corporate and a corporation that is trying hard to still be a startup,” says Jenny Dibble, who spent five months there as a marketing manager in 2011, trying, ineffectively, to get the company to use more social-media tools. She found her bosses were not particularly receptive to her ideas and that the long hours were incompatible with raising a family. “It was not a friendly environment,” she says.

  Even leaving Amazon can be a combative process—the company is not above sending letters threatening legal action if an employee takes a similar job at a competitor. It’s more evidence of that “fierce competitiveness” mentioned by Faisal Masud, who left Amazon for eBay in 2010 and received such a legal threat (eBay settled the matter privately). This perpetual exodus of employees hardly seems to hurt Amazon, though. The company, aided by the appeal of its steadily increasing stock price, has become an accomplished recruiter of new talent. In 2012 alone, Amazon’s ranks swelled to 88,400 full-time and part-time time employees, up 57 percent from the year before.

  The compensation packages at Amazon are designed to minimize the cost to the company and maximize the chances that employees will stick around through the predictable adversity that comes with joining the firm. New hires are given an industry-average base salary, a signing bonus spread over two years, and a grant of restricted stock units over four years. But unlike other technology companies, such as Google and Microsoft, which spread out their stock grants evenly, Amazon backloads the grant toward the end of the four-year period. Employees typically get 5 percent of their shares at the end of their first year, 15 percent their second year, and then 20 percent every six months over the final two years. Ensuing grants vest over two years and are also backloaded, to ensure that employees keep working hard and are never inclined to coast.

  Managers in departments of fifty people or more are required to “top-grade” their subordinates along a curve and must dismiss the least effective performers. As a result of this ongoing examination, many Amazon employees live in perpetual fear. A common experience among Amazon workers is a feeling of genuine surprise when one receives a good performance review. Managers are so parsimonious with compliments that underlings tend to spend their days anticipating their termination.

  There is little in the way of perks or unexpected performance bonuses at Amazon, though it has come along since the 1990s, when Bezos refused that early suggestion to give employees bus passes because he didn’t want them to feel pressure to leave at a reasonable hour. Employees now get ORCA cards that entitle them to free rides on Seattle’s regional transit system. Parking at the company’s offices in South Lake Union costs $220 a month and Amazon reimburses employees—for $180.

  Still, evidence of the company’s constitutional frugality is everywhere. Conference-room tables are a collection of blond-wood door-desks shoved together side by side. The vending machines take credit cards, and food in the company cafeterias is not subsidized. When a new hire joins the company, he gets a backpack with a power adapter, a laptop dock, and some orientation materials. When someone resigns, he is asked to hand in all that equipment—including the backpack. The company is constantly searching for ways to reduce costs and pass on those savings to customers in the form of lower prices. This also is embedded in the sacrosanct leadership principles:

  Frugality

  We try not to spend money on things that don’t matter to customers. Frugality breeds resourcefulness, self-sufficiency and invention. There are no extra points for headcount, budget size or fixed expense.

  All of this comes from Bezos himself. Amazon’s values are his business principles, molded through two decades of surviving in the thin atmosphere of low profit margins and fierce skepticism from the outside world. In a way, the entire company is scaffolding built around his brain—an amplification machine meant to disseminate his ingenuity and drive across the greatest possible radius. “It’s scaffolding to magnify the thinking embodied by Jeff, to the greatest extent possible,” says Jeff Wilke when I bounce that theory off him. “Jeff was learning as he went along. He learned things from each of us who had expertise and incorporated the best pieces into his mental model. Now everyone is expected to think as much as they can like Jeff.”

  Bezos’s top executives are always modeling Bezos-like behavior. In the fall of 2012, I had dinner with Diego Piacentini at La Spiga, his favorite Italian restaurant in Seattle’s Capitol Hill neighborhood. He graciously insisted on picking up the tab, and after paying, he almost theatrically tore up the receipt. “The company is not paying for this,” he said.

  The rhythms of Amazon are the rhythms of Bezos, and its customs are closely tuned to how he prefers to process information and maximize his time. He personally runs the biannual operating review periods for the entire company, dubbed OP1 (done over the summer) and OP2 (done after the holiday season). Teams work intensely for months preparing for these sessions, drawing up six-page documents that spell out their plans for the year ahead. A few years ago, the company refined this process further to make the narratives more easily digestible for Bezos and other S Team members, who cycle through many topics during these reviews. Now every document includes at the top of the page a list of a few rules, called tenets, the principles for each group that guide the hard decisions and allow them all to move fast, without constant supervision.

  Bezos is like a chess master playing count
less games simultaneously, with the boards organized in such a way that he can efficiently tend to each match.

  Some of these chess games get more attention than others. Bezos spends more time on Amazon’s newer businesses, such as Amazon Web Services, the company’s streaming-video initiative, and, in particular, the Kindle and Kindle Fire efforts. (“I don’t think you can even fart in the Kindle building without Jeff’s approval,” quipped one longtime executive.) In these divisions, stress levels are high and any semblance of balance between work and home falls by the wayside.

  Once a week, usually on Tuesday, various departments at Amazon meet with their managers to review long spreadsheets of the data important to their business. Customer anecdotes have no place at these meetings. The numbers alone are a proxy for what is working and what is broken, how customers are behaving, and, ultimately, how well the company overall is performing.

  The meetings can be intense and intimidating. “This is what, for employees, is so absolutely scary and impressive about the executive team. They force you to look at the numbers and answer every single question about why specific things happened,” says Dave Cotter, who spent four years at Amazon as a general manager in various divisions. “Because Amazon has so much volume, it’s a way to make very quick decisions and not get into subjective debates. The data doesn’t lie.”

  The metrics meetings culminate with the weekly business review every Wednesday, one of the most important rituals at Amazon, run by Wilke. Sixty managers in the retail business gather in one room to review their departments, share data about defects and inventory turns, and talk about forecasts and the complex interactions among different parts of the company.