transcript part 1, lol.. fuck is this chump ever a long-winded schmuck.

good evening and welcome to the annual a be dick lecture on entrepreneurship at Lake Forest College Lake Forest College 32 miles north of Chicago was established in 1857 as a private co-educational liberal arts college Lake Forest College engages our eleven hundred and fifty students in the breadth of the liberal arts and the depth of the traditional disciplines Lake Forest College draws its students from 43 states and 44 foreign countries faculty at Lake Forest College know their students by name and encourage students to read critically reason analytically and above all to think for themselves the Alfred Blake DIC endowment recognizes the long-standing connection between the dick family Lake Forest College and our community and it is a particular pleasure to note that members of the dick family are in attendance this evening our distinguished speaker this evening validates three key words that are hallmarks of contemporary culture and they are risk strategy and technology Jeffrey T Jeffrey P Bezos likes to tell his story this way he has always been interested in anything that can be revolutionized by computers upon learning about the dramatic increase in the use of the internet he focused on creating a new way to retail the worldwide web unique ability to deliver incredible amounts of information quickly from this came a well calculated business strategy that culminated in the founding of seattle-based amazon.com just four years ago it is also important to share the observation offered by a correspondent writing for The Wall Street Journal mr. Bezos they wrote has quietly built a fast growing business where the world's mightiest merchants mainly have racked up failures amazon.com has pinpointed one of the few products that people really want to buy online ebooks Jeff Bezos is a Phi Beta Kappa graduate class of 1986 of Princeton University he earned a Bachelor of Science degree summa laude with majors in electrical engineering and computer science now just before we begin I wish to warmly acknowledge the presence this evening of Jeff Bezos is aunt and uncle Nonie and David Brock members of Lake Forest College class of 1966 the fact is that they had something to do with attracting him to our campus this evening [Applause] and it is with great pleasure that Lake Forest College welcomes as this year's a be dick lecturer on entrepreneurship the founder and CEO of amazon.com Jeffrey P Bezos who will discuss building earth's biggest bookstore welcome [Applause] well thank you it's a great pleasure to be here thank you for the very nice introduction the the same Wall Street Journal correspondent that you mentioned said so many nice things in that article that actually forgave him for also noting in the very same article that I have thinning hair receding hairline so there you have it I I actually can't resist at any gathering like this even though it's anecdotal and there's a huge bias and the crowd of people who come but how many people here have been to amazon.com because raise your hands does anybody bought anything at amazon.com yeah okay that's that's not bad thank you we really appreciate that and and after the lecture I invite those people to come to me and get a handshake of thanks and also I'd love to hear how we can improve the customer experience for you I can tell you a little bit about amazon.com a little bit of the story of sort of how it came to be the company was conceived in the spring of 1994 I came across a startling fact in the Spree 94 web usage was growing at 2,300 percent a year I have to keep in mind that human beings aren't good at understanding exponential growth it's just not something we see in our everyday life but things don't grow this fast outside of petri dishes it just doesn't happen and when I saw this I said okay what's a business plan that might make sense in the context of that growth and made a list of 20 different products that you might be able to sell online I was looking for the first best product and I chose ebooks for lots of different reasons but one primary reason and that is that there are more items in the book space and there are items in any other category by far there are over 3 million different books worldwide in all languages the number two product category in that regard is music they're about 300,000 active music CDs and when you have this huge catalogue of products you can build something online that you just can't build any other way the largest physical bookstores are the largest super stores and these are huge stores often converted from holding alleys and movie theaters can you only carry about a hundred and seventy five thousand titles there only a few that large and in our online catalog we're able to list over two and a half million different titles and give people access to those titles and being able to do something online that you can't do in any other way is important it's all about the the fundamental tenant of building any business which is creating value proposition for the customer and online especially three years ago but even today and for the next several years the value proposition that you have to build for customers is incredibly large and that's because the web is a pain to use today we've all experienced the modem hang-ups and the browsers crash and there all sorts of inconveniences websites are slow modem speeds are slow so if you're going to get people to use a website in today's environment you have to offer them overwhelming compensation for this primitive infant technology and I would claim that that compensation has to be so strong that it's basically that the same is saying you can only do things online today that simply can't be done any other way and that's why this huge number of products look like a winning combination online there was the note there's no other way to have a two and a half million title bookstore you can't do it in a physical store but you also can't do it in a print catalog if you were to print the amazon.com catalog it would be the size of more than 40 New York City phone books so the the it's also very important when planning a business like this I think to sort of look at what is the brand promise that you're going to make to customers and the brand promise that you make has to actually coincide and very very closely with the things that you can deliver the kind of an important but sometimes overlooked component I think and and and in our case that led to the name of of amazon.com it's a mistake versus biggest river Earth's biggest bookstore and we wanted to use this large selection to be able to build an authoritative store authoritative means of a few things authoritative selection authoritative prices and authoritative information about books so that you can make a purchase decision and the internet allowed us to do all those things we could have more selection we could also have lower prices because we don't have to have retail real estate and high-traffic areas that's very expensive inventory in those spaces is very expensive we get to inventory our books and very low-cost warehouse space it's also possible to have more information online about products than you could ever have in a physical shopping environment so you can really build an authoritative store and just for those of you who don't read National Geographic nearly often enough the Amazon River is ten times the size of the Mississippi River in terms of volume of water that flows through it and are these great pictures every decade or so in National Geographic where they superimpose a cross-section of the Amazon in a cross-section of the mississippi and mississippi looks like a little creek so we opened the store in July of 1995 almost three years ago now after doing about a year of software development and the store has grown very rapidly there at this point we are our sales are about the equivalent of 50 of those big chain super stores and the interesting thing is that we opened the equivalent of twelve of those super stores in just the last three months so things are growing fast we ship looks regularly to over a hundred and sixty different countries in our first 30 days of being open we shipped books to more than 45 countries in all 50 states there are some interesting stories about the international so for example we ship for orders a day at least to Bulgaria every day and to show you the sort of the exhibit is even though Bulgaria they only have the equivalent of 41 lines of bandwidth coming in to the whole country that's a significant amazon.com has about 60 times as much bandwidth as Bulgaria coming into our into our one company we also had you know people it's very difficult to get English language books outside the US about 22% of our sales are outside the US and we had and people will go to great lengths because people want access to information they want access to things that that help them and educate themselves and so on we had an order from Romania and the person didn't have a credit card which is the most common way that the that we get paid and this was the most unusual way that we had ever gotten paid the person sent us cash which we don't encourage and they and they sent it from all the way from Romania it was US currency but it was very interesting they had taken two crisp $100 bills and folded them up into a tiny little package and it opened up the door of a floppy disk and put the money inside a floppy disk and then they mailed us the floppy disk with a note on the cover of the floppy disk it said the customs inspectors steal the money but they don't read English it's inside the floppy disk and sure enough our erstwhile accounts receivable people pried open the floppy disk and there was $200 person got their books and it's a happy ending the the I believe that the primary success factor for amazon.com has been an obsession over the customer and a focus on customer service this is clearly important in any business but especially important online and the reason for this is that word-of-mouth is incredibly powerful online if you make a customer unhappy on the internet they won't tell five friends they will tell 5,000 friends on Usenet newsgroups and listservs and so on likewise of course if you can make a customer happy by meeting or exceeding their expectations they can also tell 5,000 people and therefore you know be evangelist for you they can use the Internet as a megaphone so it's very important to do the things that you actually are going to claim to do and what this means we see is the balance of power has shifted away from the merchants and toward the consumer which is a great thing I think for every involved and it's even great for the merchants as long as the merchant realizes it one of the statistics that we track most carefully at M song comm because we believe that this is so important is our the fraction of orders we were saving receive every day that are from repeat customers and that numbers consistently gone up and it's now over 58% of our orders that we receive every day even in the context of a very rapid new customer growth one of the great things too online is that the customers help you figure out what you're doing wrong and how to do things better email is this great medium for receiving feedback because somehow email turns off that little piece of everyone's brain that causes them to mostly be polite so what happens is you know if you go into a restaurant and have a bad meal very rarely you're trying to have a good time ever go into the kitchen grab the chef's by the scruff of the neck and say you know you really shouldn't be cooking but online with email that will happen in a heartbeat and the and we've benefited greatly from that and have I believe from the in the three years that we've actually been doing business I suspect we've received more feedback both positive and negative people helping us improve our service then probably most business establishments have received in the last 20 years just very briefly since a lot of you have actually visited our website and notice under great we're doing let me just briefly hit on some of the key features of amazon.com we do have two and a half million titles and that is something at all these things we try to package the other things that you can't do without the internet because that's where you'll create real value two and a half million titles we try to focus on convenience so we have something called one-click shopping this is a new feature we just launched a few months ago that's been very successful and it allows repeat customers to literally order with one click of the mouse this when we did focus groups and tested this new feature before launching it the biggest problem was that people didn't really think they had finished the order so we had to actually change the surrounding this thing so that it's not only to say thank you for your order but in parentheses it now says yes it really did place an order this works because we keep the shipping address on file we keep the credit card number on file something that you can do online that's very difficult to do in any other way