On July 5th, Amazon founder (current CEO) Jeff Bezos announced at the company’s annual shareholder meeting that he will officially resign as CEO (CEO) on July 5.
To the outside world, what the 57-year-old, worth as much as US$190 billion, the world’s richest man will do next, seems far more interesting than where Amazon will go in the future.
Hand in the best of Amazon’s biggest “heritor”
More than a month later, Bezos will hand over control of the company to Andy Jassy, who is the CEO of Amazon AWS. After stepping down as CEO, Bezos will serve as the executive chairman of Amazon. In fact, he is still Amazon’s largest shareholder, owning 10.6% of the company.
As early as February of this year, Amazon revealed the major changes in this leadership, saying that Andy Jassy will take over in the third fiscal quarter. However, before last Thursday, Amazon has not disclosed the exact date of this change.
The reason for choosing the day of July 5 is still slightly “sentimental” for Bezos-Amazon was formally established on this day in 1994, and it has been 27 years.
Bezos said at the meeting on Thursday: “I am very happy to be able to assume the role of (executive) chairman next. I will focus my energy and attention on new products and other projects.” The so-called new products should be A few months ago, he wanted to spend more time outside of Amazon’s new projects-including the Bezos Earth Fund and Blue Origin.
Bezos believes that his successor Andy Jassy will become “an outstanding leader.” The latter graduated from Harvard Business School in 1997 and has worked for Amazon for 24 years. It is this Andy Jassy who transformed Amazon from an e-commerce company to a high-profit technology company and consolidated the AWS business. And dominate the global cloud computing market. In Amazon’s management, Andy Jassy has always been known as Bezos’ right-hand man. Since he was promoted to the CEO of Amazon’s most profitable department (AWS) in 2016, he has been regarded as the best successor to the CEO.
Obviously, Jassi, who takes office more than a month later, will face a more complicated situation.
On Thursday morning, Amazon announced that it would acquire MGM for US$8.45 billion, as well as some sharp questions at the shareholders meeting shortly afterwards, which proved that Jassy will take over an increasingly complex and constantly on the cusp Giant enterprise.
The acquisition of MGM was a challenge that Bezos left for his successor before he stepped down as CEO. If everything is OK, this will be Amazon’s $13.7 billion acquisition of Whole Foods in 2017 with the largest transaction amount. The outside world is unanimous that this will continue to enhance Amazon’s competitiveness in the field of global streaming media services.
However, more trouble appeared in the many proposals that appeared at the general meeting of shareholders-although these proposals were ultimately rejected. There is a proposal to allow an hourly employee to serve on the company’s board of directors, and there are also proposals to face antitrust investigations. Although unsuccessful, the motion underscores the criticism that Amazon has recently faced due to unfair treatment of its warehouse workers.
At the shareholders meeting, Bezos was asked by shareholders about Amazon’s huge business scale and the antitrust investigations it faced. The day before, the U.S. Attorney General in Washington, D.C., filed a lawsuit against American e-commerce giant Amazon for violating antitrust laws. The lawsuit alleges that Amazon illegally used price agreements to eliminate competition and raise prices.
Bezos’ answer to this is: “I want to say that wherever we do business, in any industry, we are facing fierce competition from mature companies.” He emphasized, “Retail industry is a very healthy industry. It’s far from a winner-takes-all situation.”
Regarding Amazon’s investment in many new businesses, Bezos admitted that he is still working on some major investments that may ultimately fail, such as Amazon’s telemedicine services and Kuiper satellite Internet network projects. Bezos believes that “the only way to get an above-average return is to take greater risks, and many risks are not rewarded.”
His classic theory of success and failure is well known. In Amazon’s letter to shareholders in 2019, Bezos stated that good leaders must face failure calmly: as the company grows, everything needs to grow at the same time, including the cost of failed attempts. If a company fails on a project, but the cost of failure is small compared to the size of the company, then even if the project succeeds, it may not make much sense.
“If Amazon occasionally fails projects worth billions of dollars, then Amazon must be conducting trials that match the size of the company. For shareholders, even if only one trial succeeds, the benefits will be It can offset the cost of many failed trials.” This was a famous saying by Bezos at the time.
What is the biggest challenge for Amazon?
Most of the outside world still holds a positive attitude towards Bezos’ “retirement”. As the executive chairman of the board, Bezos will lead the board, closely advise the new CEO Jassy, and maintain an important influence on the business empire he built from scratch.
“The executive chairman of the board of directors is usually very engaged, and he seems to continue to invest in the development of the company as Jassy’s partner. This is a good thing.” Michael Wharton, a management professor who has been following Amazon for a long time・ Useem told the media.
In his opinion, as the company’s executive chairman, Bezos can continue to guide the company’s development, “but he doesn’t have to be responsible for the company’s future strategic success or failure.” In the quarter, we will not see too much swing in Amazon’s performance.” Useem Mike said.
Other industry analysts also believe that the handover and transition of the two will be seamless. Because Jassy has worked at Amazon for almost as long as Bezos, and has always been Bezos’ right-hand man, it is likely that Jassy has been trained for some time to become Bezos’ successor.
Wharton Marketing Professor Barbara Kahn agreed with this. She believes that Jassy’s outstanding performance during his tenure at AWS shows that this successor has “fully implemented” Amazon’s corporate culture and spirit. “Like Bezos, he is also an innovator. He has developed Amazon’s most profitable department, AWS, and his advantages will be rewarded in the future.”
Most analysts believe that Amazon’s strategy will not change dramatically in the next few years. For the past 25 years, Amazon’s strategy has been consistent-customer-centric, and provide the best user experience. “The most important thing is that I don’t think consumers will notice this kind of major management changes in their daily transactions with Amazon.” Kahn emphasized.
Some Wall Street analysts pointed out that CEO succession is commonplace in the business world, and it is also expected. Even without Amazon’s pure corporate culture, Jassy has a great future.
“Think of Tim Cook. He became the CEO of Apple after Steve Jobs, and his performance has been good; Sundar Pichai from founder Larry Pei Larry Page and Sergey Brin took over Google’s power and continued Google’s industry influence. To maintain Amazon’s growth trajectory and profitability, Jassi will of course face tremendous pressure , But his ability in AWS shows that it is not too problematic.” A Wall Street analyst assessed and pointed out.
“Especially now is a different Internet age. For Amazon to maintain its amazing growth momentum, a different set of skills and a different leadership style are required.” Norton Business School professor Useem said, “I think Bezos might say to Andy Jassy when he made up his mind—be yourself, you are not me, this is a different era. You must lead Amazon in your own way.”
This is true. At least the Silicon Valley public opinion generally believes that if anyone can continue the business started by Bezos, it must be someone like Jassy.
However, regarding the development prospects of Amazon in the next three to five years, some analysts pointed out that Jassy will have to resolve some of the problems and disputes that the company will face in the future, including counterfeit and inferior products, potential antitrust lawsuits, and unfair treatment of employees. .
Another embarrassing situation is the wealth change and social justice issues of Amazon (mainly Bezos himself).
Recently, in an economic survey report submitted by Jayaty Ghosh, an economics professor at the University of Massachusetts Amherst, the relevant data showed that: from March 2020 to In December, the total wealth of global billionaires increased by US$3.9 trillion to reach US$11.95 trillion.
The report shows that the top 10 wealthy individuals in the world have their overall net assets increased by US$540 billion during the same period. The richest people on the list include Bezos and Musk, as well as Bill Gates and Facebook CEO Mark Zuckerberg. Relevant researchers believe that the rapid increase in the income of Internet giants caused by the new crown epidemic has exposed economic gaps. The report calls for higher taxes on the wealth of these super-rich and giant companies, while strengthening income protection for ordinary workers and environmentally sustainable development. Support.
“Understanding the role a company plays in its society, including how the company treats its employees (including part-timers), environmental protection and sustainability issues, etc., will become even more important. Considering that Amazon has revolved around these issues under the leadership of Bezos in the past. The controversy of the issue, to be fair, having a new leader may be a good thing.” A Wall Street analyst pointed out.
Is it possible for him to retreat and Lianpo?
Some people in the industry believe that the 57-year-old Bezos chose to leave Amazon’s CEO position at this time, something like a “rapid retreat.”
However, he himself stated that the move was “not for retirement.”
Bezos will continue to serve as the executive chairman of Amazon. That is to say, he will continue to pay attention to the development of Amazon from another height and get out of front-line management. The “new products and new initiatives” he plans to focus on include the following:
Day One Fund
Bezos announced the establishment of a charity work in September 2018 to provide funding for existing non-profit organizations to help poor families and create a new, non-profit first-level kindergarten network in low-income communities.
The space company established by Bezos aims to make the cost of entering space lower through reusable launch vehicles. The company is currently testing a rocket system and a lunar lander called “Blue moon”, and plans to conduct its first mission in 2024.
Bezos Earth Fund
In 2020, Bezos pledged to provide US$10 billion in funding to scientists, activists, non-profit organizations and other organizations dedicated to protecting the environment and responding to the effects of climate change. In November 2020, he announced the first batch of 16 grantees with a total grant of US$791 million.
Bezos acquired this veteran newspaper in 2013 and looks forward to revitalizing the brand and making it a strong player in online media.
Looking back at Bezos’s many new jobs in the past ten years, part of it is a public welfare project, and part is a “future” project, such as his heavy bet on Blue Origin (but currently being held down by Musk’s Space X).
This is also one of the reasons why the outside world has some “clean and old” views on Bezos’s decision to step down as CEO. After all, among the five Internet giants of FAANG (Facebook, Apple, Amazon, Netflix, Netflix, and Google), apart from the young Zuckerberg, Bezos is the only founder in power.
And the Internet giants and tech rookies looking around, including Musk, who has frequently dented him in competition in the space business in recent years, are basically young entrepreneurial elites in Silicon Valley.
If you put the time back to 1994, Bezos, who had just quit his job as a lucrative hedge fund and founded an Internet bookstore in a garage in Washington State, was also one of the representatives of young entrepreneurs.
At that time, the Internet world was still developing in ignorance and speed. Only 0.447% of people in the world had the ability to access the Internet. If you are lucky enough to be one of them, it is very likely to be dial-up. At that time, AOL’s monthly 5-hour dial-up Internet fee was as high as $19.95.
It is this budding state that gives Amazon a great opportunity for development: the Internet access rate in the United States increased from 0.252% in 1993 to 0.777% in 1995, and then increased to 26.2% in 1999. When Amazon’s market value was $5 billion in 2006, this access rate was 41.5%; when Amazon’s market value exceeded 1.6 trillion in 2020, the nation’s broadband access rate reached 93%.
However, the ceiling also began to appear. So as a loyal fan of “Star Trek”, Bezos began to ponder the space business (Blue Origin) in the past few years.
Bezos should not have imagined that Elon Musk, his main competitor in the space business in recent years, was doing two summer internships when he founded Amazon in 1994: one is the energy storage startup Pinnacle Research. Institute, the other is Rocket Science Games headquartered in Palo Alto.
In that year, Facebook’s CEO Mark Zuckerberg just turned 10 years old, and Evan Spiegel, the co-founder of the popular social network SnapChat, was just 4 years old. year old.
As for the peers, Steve Jobs, who had memorized that year, was running NeXT, and the company finally announced that it had achieved its first profit ($1 million); and Sergey Brin (Sergey Brin) Less than a few months after graduating from the University of Maryland, Larry Page was still in his junior year at the University of Michigan. The two future Google co-founders will not have the idea of ”Google” until a few years later; Streaming media giant Netflix was formally established only three years after Bezos started his business.
Although Amazon is not the last two in FAANG now, for the rapidly changing Internet world, it is inevitable that the new and the old will change and the concept will change. This is also one of the reasons why the two founders of Microsoft Bill Gates and Google met early.
Go ahead. Count the romantic figures, but also look at the present.