In a candid revelation, Amazon founder Jeff Bezos has opened up about the incredibly difficult early days of his now-trillion-dollar company, detailing the immense challenges he faced while trying to raise initial capital for what was then just a fledgling online bookstore.
The Uphill Battle for Amazon's First Million
Speaking recently at the DealBook Summit hosted by Andrew Ross Sorkin, Bezos recounted the monumental effort required to secure Amazon's first million dollars in funding back in 1995. This struggle stands in stark contrast to the company's current status, which boasts a staggering $2.38 trillion market capitalisation, with Bezos's personal net worth estimated at $236.1 billion.
Bezos described the process as an exhaustive marathon of pitches and rejections. "It was the hardest thing I’ve ever done, basically," the billionaire entrepreneur admitted, reflecting on those formative years.
60 Meetings and 40 Rejections: The Relentless Pitch
The journey to secure seed funding was far from smooth. Bezos disclosed that he conducted a total of 60 meetings with angel investors, with each meeting often requiring multiple rounds of detailed discussions. Despite his efforts, the outcome was disheartening for the young founder.
Out of those 60 pitches, a total of 40 potential angel investors outright rejected the idea of an online bookstore. His pitch was simple: he offered a 20% stake in Amazon at a company valuation of $5 million. Eventually, around 20 investors came on board, with each contributing approximately $50,000.
Bezos explained that a primary hurdle was the era itself. In the mid-1990s, very few people grasped the commercial potential of the World Wide Web. "The first question was 'what’s the internet?' Everybody wanted to know what the internet was," Bezos recalled, highlighting the foundational knowledge gap he had to bridge with every potential backer.
Blunt Honesty and Naivety: A Costly Strategy?
Looking back, Bezos also confessed to a degree of naivety in his approach during those funding rounds. He revealed that he was brutally honest with potential investors about the risks involved.
"I would always tell people I thought there was a 70% chance they would lose their investment. In retrospect, I think that might have been a little naive. But I think it was true. In fact, if anything, I think I was giving myself better odds than the real odds," Bezos stated.
This blunt assessment of the high probability of failure may have deterred some investors. However, he strongly emphasised that the early commitments they did secure were absolutely critical. "The whole enterprise could have been extinguished then," he noted, acknowledging how pivotal that first round of funding was for Amazon's survival.
In a lighter aside from the same interview, which was originally a 2017 discussion with his brother Mark Bezos, Jeff Bezos also shared his unconventional dream job. If money were no object, he said he would love to be a bartender crafting high-end cocktails. "I pride myself on my craft cocktails. I do have this fantasy that I want to be a bartender," he said, adding that he has "glamorised the job" in his mind and enjoys discussing a well-made drink.
The story of Amazon's origin, filled with relentless perseverance in the face of scepticism, serves as a powerful reminder of the humble and uncertain beginnings of even the world's most dominant companies.
