Some people have framed degrees. Others framed photos with celebrities. Jeff Bezos has a 16-year-old framed copy of Businessweek magazine.
Wednesday, the founder of Amazon tweeted a photo of the November 2006 magazine cover, which featured a photo of Bezos at age 42 behind the text “Amazon’s Risky Bet”. The cover story explained why Wall Street executives doubted Amazon Web Services, then a brand new on-demand cloud computing service, would ever succeed.
“I have that old BusinessWeek from 2006 framed as a reminder,” Bezos, now 58, wrote in the tweet. “The ‘risky bet’ that Wall Street didn’t like was AWS, which generated over $62 billion in revenue last year.”
In 2006, Amazon was worth just $10 billion, according to Businessweek — and investors and analysts were “losing faith in Bezos’ promises.” The article called Bezos on an untimely “spending spree”, noting that his investments in new technologies like cloud computing had risen 52% since January of that year, while Amazon shares had risen. reduced by 20%.
Specifically, Businessweek called Amazon Web Services “Bezos’ biggest gamble since he and his wife, MacKenzie, traveled west in 1994 to seek fame and fortune on the Net.”
Today, the cloud computing platform is known for helping to revolutionize the world of online marketplaces and is a major contributor to Amazon’s current market capitalization of $1.08 trillion as of Friday afternoon.
Last year, Amazon Web Services made $62.2 billion in revenue, according to the company’s annual report. An earnings statement from earlier this year shows that the platform has been largely responsible for Amazon’s profitability so far in 2022: AWS made $6.52 billion in operating profit during of the first quarter of 2022, far exceeding Amazon’s total operating profit of approximately $3.7 billion.
Businessweek’s analysis was not entirely wrong. Amazon has built a reputation over the years by making big bets on new technologies and using the profits from its successes to subsidize its failures.
In 2014, Amazon suffered a loss of $170 million for unsold Firephones. In 2019, the company closed 87 pop-up stores and closed its restaurant delivery service. Last year, it discontinued Dash Buttons, one-click buttons meant to be mounted around users’ homes for frequent product replenishments.
Failures don’t seem to phase Bezos, who often says that risk — and defeat — is the price of admission to success.
“We need big failures if we’re going to move the needle — failures on the scale of billions of dollars,” Bezos said at Amazon’s re:Mars conference in 2019. “What if we don’t don’t do it, we’re not fighting hard enough.”
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