Battle tested. Some people asking if amazon is a monopoly. The question for the widemocracy is, are we okath wione company essentially ingca talism . How do you and jeff think about the call to break yoguys up . Simply because the companys been successful doesnt mean its somehow too bi narrator now on frontline. Domination was very much the idea. Narrator amazon empire. Frontline is madeble by contributions to your pbs station from viewers like you. Thank you. And by the corporation for public broadcasting. Major support is provided by the john d. And catherine t. Macarthur foundation, committed to building a re jus verdant and peaceful world. And by the Ford Foundation g workth visionaries on the frontlines of social change worldwide. On addi support is provided by the abrams foundation, committed to excelle journalism. The park foundation, dedicated to heightening Public Awareness of critical issues. H the john aen glessner family trust. Supporting trustworthy journalism that informs d inspires. The heisingsimons foundation unloing knowledge, opportunity, and possibilities. And by thena frontline josm fund, with major support from jon and jo ann hagler. And Additional Support ura debonis and scott nathan. Jeff bezos has already conquered the retailrontier. Now hes got a plan to colonize the planets. Bezos is laying out his plans for colonizing space. Bezos is known for going big, and now hes literally shooting for the moon. Narrator in may of 2019, jeff bezos, the richest person on the planet, unveiled his latest invention. This is blue moon. Moon, this time to stay. The again that the most importantr work hes doing is work in space. What hes built in amazon is really important and really interesting, and its, it revolutionized commerce. But its only revolutionized commerce. Narrator bezoss plan is to chart a new course for the fure of humanity. Manufactured worlds rotated to create artificialty with centrifugal force. These are very large structures, miles on end. And they hold a Million People or more each. Narrator its an idea hes had since he was a teenager. This is me in high school. And i want to highlight this quote the earth is finite, and the World Economy and population is to keep expanding, space is the only way to go. I stl believe that. The way jeff bezos sees is it is that consumerism is an example of how todays societyve better than our parents did and our grandparents. And he wants, you know, future generations to continue to have an increasgly better lifestyle. These are beautiful. People are going to want to live here. Narrator bezos ud his extraterrestrial plans at a time of growing concern aboutth empire hes built here on earth. Amazon is thereat disrupter, from books to retail to grocery stores. Years, jeff bezos has been5 srupting and transformingal most every aspect of our modern lives. Once you Start Connecting the dots, you see that amazon is building all of the invisible esinfrastructure for our f. Amazon announced a Healthcare Partnership. Amazon is helping t. A. Build a secure cloud. How much of the internet do you run . Thats a good question, um, its a lot, though. I narrator brecent years, amazon and bezos have come under scrutiny for thr aggressive tactics and expanding power. bezosaughing everything that is admirable abouamazon is also something that we should fear about it. Narrator for the past year, weve be investigating how jeff bezos built his empire and at what cost. And so think about this. Big things start small. Narrator jeff bezoss empire has its roots not in silicon, valleyt on wall street. Graduate went to wk in thenceton early 1990s, at a Secretive Hedge Fund called d. E. Shaw. David shaw was thone who revolutionized wall street by introducing data. And i think jeff really embraced that, that idea that, ey, if you have data, ultimately, you win. Things that david shaw asked jeff bezos to do wasn to go and vestigate new businesses, and in particular this new thing in the rly 90s called the world wide web. dialup modem connecting we all know that a Communications Revolution isth underway i country. What is the internet . Its sort of the mother of all networks. I s information highways. Itkind of like your remote narrator bezosas quick to see the Untapped Potential of the new digital landscape and was determined to get in on it. Igame across this startlin statistic that web usage was growing at 2,300 a year. So, i decided i would try and find a Business Plan that made sense in the context of that growth, and i pick books as the first best product to sell online. Becae books are incredibly unusual in one respect, and that is that there are more titems inhe book categon there are items in any other category by far. So, when you have that many items, you can literally build a store online that couldnt exist any other way. Narrator the store he was imagining didnt exist, so he decideto build it himself. The reaction to jeffs idea thto start selling books o internet was pretty incredulous, lot of therom people close to him. His mom tried to convince him to just do it at night or over the weekends. She didnt want to see him gives upob. Jeff called, and he told me that he and mackenzie were quitting their jobs, and they were moving to seattle and starti aompany. I said, great, well, what are you going to do . He said, were going to sell books. I said, nice. He said, on the internet. I said, oh. Jeff, why will anybody buy anything from you . And he said, well, were goingv tomore books than anybody else. Narrator one of the first names bezos coidered for his newebsite was relentless. Com. Why relentless . Relentless meant, we move on no matter what. He ultimately, obviously, decided that rentless wasnt quite the right fit. Amazon, earths largest river, was. Amazon means gigantic. In terms of relentlessness, stopping at nothing, thats, is that an apt description of jeff . No. Its not that jeff stops at nothing, its that when jeff sets his mind on a goal that he thinks he can achieve, he wont stop until hes proven wrong or until he achieves it. En jeff and mae had rented a house in bellevue. And then we moved to a small, secondfloor office in the south part of seattle. Amazon employee nune, onewas ofine former amazon insiders who agreed to talk on camera. An what the cois now was nowhere in my wildest imagination. Could have thetheoft that it position in the world that it has now, i had no clue. Narrator in july 1995, amazon. Com went live. It was an incredible novelty, it was tiny and obscure, and its very hard to imagine, but the entire universe that amazon now dominates did not exist. Amazon. Com, this virtual shop claims to be the worls largest bookstore. Narrator it didnt take long for bezoss vision to prove prescient. What makes us different is vast selection, convenience we deliver right to the deskt. If our catalog were printed on paper, it would be the size ofn sew york city phonebooks. Narrator the compauickly outgrew the garage and soon had more than 50 employees. In 1996, james marcus applied to be number 55. There was a very palpable citement in the air at this place, and of course at this point jeff bezos was the first person to interview every prospective employee. So i was ushered into his office. He wted to see how fast you were on your feet. He also always wanted to know your s. A. Tscores. He wanted to know your s. A. T. Scores . Every time, yes. How old were you the time . I was 36 or 37. This is the original signr that i made foazon. Com. O blue spray pain white poster board. Jeff wasnt aigure out folklore at that point, he was not thethe wealthiest man in the world. Heres my computer, n. Azon. Com up on the scree hello, jeff bezos. He was a small, nondescript, a yhaired man sitting at a desk with quite rge and ertive laugh. M laughing inultiple scenes but he wasnt threatening, he was a normal guy to a sort of hal 9000 hat, vimportant. D hal share a birthday, were both born on january 12. U it belied, ow, an enormous, napoleonic ambition. One of the people i really like, thomas edison, heres ais model of hriginal light bulb. Hes famous for saying, one percent inspiration, 99 percent perspiration. laughs it turns out ideas are the easy part, executiois everything. Domination was on jeffs mind from the beginning. S one of hist of secondincommand people said to me, you have to understand that jeff wants to sl many more things than books. And jeffs idea is that in the neardistant future, you could buy a kayak from amazon. And ifand after you brout the kayak, you cou figure out good places to kayak and buy travel services from amazo so, those ambitions were very a clear,nd this was very early. On but he was clearly thinking in those terms from the getgo. Ow id that ring to you at the time . A little bit exciting and a little bit nutty. Amazon. Com, very good websit you should really try it. bezos laughs if you signedn to work at aa kind of futuristic bookstore, and the guy who owned it was suddenly talking about selling, you know, every object in the universejust werent sure how seriously to take it. Ezos laughing bezos screaming playfully narrator though his publicn image was ofteserious. Es that was awome ar tor inside the company, bezos was a hardcharging manager relentlessly foced on the principle that would make amazon one of the most trusted brands in the world the customer always comes first. This culture of customer obsession. Obsessive focus on customer. Obsesses over our customers. Totally obsessing over the custer experience. We used to call it customer ecstasy. It means building, delivering, focusing on your customer. And we did it, you know, in the very, very early days at every stage. Narrator jennifer cast was there in the early days and is one of six top amazon executives the company put forward to speak to us. Customer obsession was our north star. Erd so, you know, it was a place where we knew wea part of something that was new, the internet there was an excitement that we were doing something that hadnt beenone before. It was exhilarating. We were all aligned around building for customers. Hey, you guys. Hey. bezos laughs ive heard there was an empty chair that would often be put at meetings. Yeah. Who was in the pty chair . Yeah, so that empty chair was there to remind usll to understand the customer, hav empathy for the customer, understand the details of the customer experience. The customer isnt there, we have to bring forward the voice of the customer. phone ringing thank you for calling amazon. Com. Narrator and bezos quicklyar d that in this new online world, he could understand exactly how customers were behaving. All orders do need to be placed online. It was made clear from the beginning th Data Collection was also one of amazons sinesses. All Customer Behavior that flowed through the site was recorded and track. And that itself was a valuable commodity. Have you visited our bsite . We could track how a customer navigated through the site. So we could see what you lood at, we could also see what you paused at, we could see what yoa put in youet but didnt order, we could see what you put in your basket and did order. So thats when we started realizing, man, this is rich. , this is rich, rich. And so weve used it for everything. What do you do with that formation . Thats the data that allows us to predict, or try to predict, what books that you would like that you havent discovered yet. Narrator bezos treated the site as a laboratory, where he studied Customer Behavior along with his chief scientist andreas weigend. I was shocked to see how predictable people are. If you take the time of the day into account, if you take maybee whenwere last on the site, how long they were on the site last time, howontheyre on the site today, you know what theyre falling for. Whoever owns, collects, the data, if you have access to it and rights to data, then youre king. Its all about the data. Everything. One of the most fascinating kind of ols we have at our disposal is the ability to do active experiments. Its, you know, its kind of this huge laboratory. We did not think about it asx oiting, we thought about helping people make better decisions. That was less resp toward that the conser, who was, after all, supposed to be our god, the person whose ecstasy was our very reason for being. And it was closer to getting a cow into a milking stall and extracting as many pails asur possibleg each visit. And that felt a little more but that was the business of amazon. Amazon has added 880,000 new customers. Narrator while bezos was using these insights to bring more and more customers into. Amazon. The number of customers who use the wee has increased fourfold. To nar there was one thing he hadnt done yet. The companys never made a profit. Thats right. Now, why. How does that. Why. How does that. . T seems like a new math, doesnt it . It does. Narrator bezos would spend years losing money trying to beat his competition, and he convinced investors to go ong with i ne of jeff bezos greatest ability to get walstreet tos accept the fact the firstma 20some years,n wasnt going to be very profitable. And thats okay because theyre buildi infrastructe that will cate huge opportunities for them to gain scale and gain customers and gain business. To nar he spelled it out in a letter to shareholders after the Company First went blic its all out the long term, he wrote, rather than shortterm profits or wall street reactions. He essentially says, we are going to forego profits in order to take market share. That our straty is to lose money, which enables us then to put other companies ouof business who cant afford to lose money. Narrator that strategydn wo sit well with critics like stacy mitchell, who advocates for small businesses. In essence, at the very beginning, hes signaling to shareholders, i have tegy to monopolize the market, and thats going to reward you, but its going to be far down theou road, and willome along with me . And they said yes. Narrator investors also recognized bezos essential vantage over physical stores,ic had to charge their customers sales tax, unlike online businesses. So, not collecting sales tax gave amazon a big leg up over bricks and mortar retailers. And that was central to their early strategyf gaining market share as quickly as they can. What bookseers were saying to me is that, this is driving my customers to amazon. Theyll come into the stor theyll browse, they find what they want, but then theyll go buy it on amazon, because theysa ve that saletax. So it was a very irksome, early, big issue for the book vendors, first of all, they were kind of the canaries in the mine, so to speak, and then lots of other retailers. Amazon has added thousands of warehouse workers and three million square feet of space. Zo narrator amans salestax advantage would be central to its success as it expanded beyond books, into other products. Selection of things you can look at. Electronics and then of course toys yeah, thank you, here is, weve got have the friendly pokemon. This is mo than ten times the selection that you will find in a typical, physical world ftware store. Narrator but bezos was still a long way from his goal ofhe amazon beinglace where you could buy everything online. drills whirring and he saw a way to achieve it. Walmart of the internet. Ome the narrator there were thousands of businesses eager tn sell o bezos offered them a way to do it. G amazon is transforminitself om an online bookstore to an online mall. Narrator he transformed amazon into a retail platform ere anyone could sell their goods to his customers and businesses to be a part of it. Its the easiest place r anybody, small or large, whoet wants top shop online to sell online, because they can access our 12 millionplus customers. Utybody, all comers. Were talking hundreds of thousands of companies with literally tens of millions of products. Narrator namebrand stores started selling on bezoss platform, and so did tens of thousands of small entrepreneurs. Everyone knew amazon. Co the only people that knew superduperhoops. Com were the ones that were searching to buy a sketball hoop and saw ou name on an advertisement. To us it was really a nobrainer. We knew that we would, you know, increase our sales. Fit year we did 100,000, next year we did a million, we did two million, four million, we were doubling every year in the early days. Narrator it was great for the companies aneven greater for jeff bezos. Amazon has become the mostle recogn name in ecommerce. Narrator not only would he take a cut of everything other businesses sold, hed also keep his own store on the platform, competing against everyone else in the marketplace he owned and controlled. He owns the main street. He has the main reet real estate. Not just one building on the corner, the entire main street. Wield its power over the onlinek place would eventually become a question for government regulators, but early on, ere were indications. Th first to see them were Book Publishers. Amazon took over a large market share of the Publishing Industry very, very fast. E they wry quickly in a position to demand concessions. You knink that was a moment where publishers started to realize, oh, wait a minute, like, we. Theyre r partner, but they now have the beginnings of a boot on our windpipe. Narrator inside the company, they had launched a strategy that some calledthe gazelle project, because theyd heard bezos wanted tm to pursue publishers the way a cheetah pursues a sickly gazelle. Well, you dont go after the strongest. Its like the cheeh. The cheetah looks for the weak, looks for the sick, looks for for. Small, thats what you go so dont start with, you know, start with number er. Publisher and then number six publisher, and by the time yoube get to nthree, two, and one, the noise has gone, gotten back to them. Theyre going to know this isan comingchances are you may be able to settle that without a fullon war. We were just this littlep mom and blishing company, publishingoetry books and translated fiction. Narrator in the early 2000s thmber of books Dennis Johnson was selling on amazon had been rising steadily. Then one day, he got a phone call. Our distributor cus up to talk about our amazon contract. And he said, i went out to dinner last night with amazon, it was like going out to dinner wi the godfather. They want a kickback. Thats the word he used, kickback. And he said they wanted four percent more of our sales. Was that unusua it was. In our experience, it was totally unprecedented, yes. Narrator randy miller ranro the an book team and says he saw nothing wrong with amazons tough tactics to challenge publishers on prices and profit margins. De in to bring them into line, we would actually take them out of automatedme handising, take their prices up to list price; we would put r