Jennifer Cast

Rather early on, especially, you know, you were a books fan and you helped build the books website. There is this well-known anecdote about cheetahs and gazelles, this gazelle program. Do you know about that?

I don’t.

So there was this meeting, and we’ve talked to former Amazonians about it, where Jeff had said we should basically try to negotiate with book publishers and try to get better terms and treat the smaller publishers as a cheetah would go after a wounded gazelle. You go after the small guys in order to get the big guys to come to terms, terms that Amazon at the time wanted. What was the thinking internally about how to utilize new-found leverage and power as Amazon grew?

So I led the books business for a while in the early days, 2000, 2001. You know, I think it’s important to remember that book publishers were used to providing terms, marketing dollars, support. You know, we all want to do the same thing. We all want to get books in the hands of customers, right?

They were used to the model of the physical store. You’ve got endcaps; you’ve got store windows. You know, some of them had newspaper advertisements. We were a completely—we had different vehicles, and those vehicles weren’t well known; they weren’t well understood. And so the challenge that we talked about a lot was translating the opportunity from a physical store, which is in a certain physical location with a number of people walking by, to the internet, which is very, very different.

And so when we talked about terms and having people, smaller publishers kind of take the jump with us earlier, a lot of the conversations were about, those people were hungry; they were hungry to get their books into the hands of more customers. And so I didn’t hear the cheetah and gazelle example, but what we were looking for was people that were willing to move away from the old model of bricks and mortars and endcaps and windows to a new model, which was, you know, a virtual store that had many different types of opportunities to present their books to customers: email; you know, many, many, many different ways.

I’m curious also about, just in those years, because Amazon, as Jeff had said, was a famously unprofitable company at the time. … What was the philosophy about profits and profitability?

We are frugal, from the very beginning. We had tuna cans that held our pens; we had door desks, nothing fancy, and it was because we wanted to spend money on our customers. The philosophy about profitability was: focus on the long term, understand the business model, understand what the long term can look like, and don’t be afraid of building for the future.

You know, at the very beginning, I took advantage of the fact that you could buy the Oxford English Dictionary, the huge set, and pay $3.95 for shipping. And I told Jeff I felt bad about it. I said, “Do you feel like this is ethical for me to know that I can get it for $3.95?” And he said: “Yeah, we’re lame. We haven’t fixed our shipping prices yet.” Our philosophy was—so he said, “Go ahead,” and I got the whole four huge boxes of books, shipping $3.95.

Meaning Amazon was taking a loss on that?

Oh, yeah. I mean, it was $3.95 to ship however many books are in the OED.

Mm-hmm.

We prioritized, and we looked at the opportunities to continue to deliver for customers, and we knew where we were losing money, and we made—Jeff made very rational decisions about where we were going to invest, where we were going to, you know, improve. We audited from the very, very beginning—you know, another thing that we would call “dive deep” now, and it’s not just in terms of analytics and metrics; it’s also just conceptually—but we audited and knew where we were spending money, and it was very conscious to be focused on the long term.

I mean, I’m curious, again, about, you know, you were there in the early days of books, but we’ve had a difficult time in some ways getting publishers to talk to us on camera about Amazon. And in part, it seems the reason is that they’re afraid in some ways of talking about the big channel that they have to the market, that they have to consumers, and they wouldn’t really necessarily want to say anything that would upset the beast in some ways. What do you make of that? How do you react to that, that publishers find it uncomfortable to talk about Amazon publicly?

I don’t know. I mean, I haven’t seen that. I haven’t been in your shoes. I’m sure they have—I mean, if you’re saying that they don’t talk negatively about us, I mean, I know they have a lot of good things to say about us. I don’t know why they wouldn’t speak their minds. We certainly value speaking our minds.