In this success story, we are going to share Jeff Bezos biography, an American entrepreneur and e-commerce pioneer, the creator of online store Amazon.com. He is also the founder of Blue Origin, a company that aims to make space travel affordable to ordinary people. Bezos always has his customer in mind, no matter what he is working on. His number one priority is making it as available and easily accessible as possible. A hyper-intelligent, ultra-driven individual, Bezos’s a dual-personality can turn him from a compassionate person to a rough executive within seconds. An extraordinarily ambitious person, Jeff Bezos to this day seeks to push the possibilities of modern technology beyond the imaginable.
Jeffrey Preston “Jeff” Bezos” (pronounced BAY-zoes) was born on January 12, 1964, in Albuquerque, New Mexico. His biological father, Ted Jorgenson, was one of Albuquerque’s top unicyclists and part of a local troupe the Unicycle Wranglers who put on performance at county fairs and circuses while Jeff was still a baby. Jeff’s mother, Jacklyn Bezos, was still in her teens when she married Ted, and their marriage lasted for little more than one year.
“The reality, as far as I’m concerned, is that my Dad is my natural father. The only time I ever think about it, genuinely, is when a doctor asks me to fill out a form,” Jeff told Wired in 1999.
Jeff’s stepfather, Mike Bezos, was born in Cuba. He escaped to the United States alone at the age of 15 and worked at the University of Albuquerque. When he married Jeff’s mother, the family moved to Houston, Texas where Mike became an engineer for Exxon – American, an oil and gas company that flourished from the mid-1940s to the 1970s.
Jeff displayed remarkable mechanical talent from an early age, which fits well with his varied scientific interests. As a toddler, he had managed to dismantle his crib with a screwdriver and as a teen, he had developed an electric alarm to keep younger siblings out of his room. Jeff’s parents eventually asked him to move all his stuff to their garage which he converted into a laboratory for his science projects.
Jeff’s ancestors on the mother’s side were early settlers in Texas and the family owned a large ranch at Cotulla that had been passed on to them over the generations. Jeff’s grandfather, Lawrence Preston “Pop” Gise, was a regional director of The United States Atomic Energy Commission (AEC) in Albuquerque and had supervised the Los Alamos and Lawrence Livermore nuclear labs before retiring to the family ranch.
Jeff Bezos attended River Oaks Elementary School in Houston from fourth to sixth grade. He would spend summers at the ranch working on enormously varied tasks such as laying pipe, fixing windmills, vaccinating cattle, and other farm work. His grandfather, Lawrence Gise, was a huge role model in his life, with this wide-ranging knowledge of science and constant presence on the ranch. In a 2010 commencement speech, Jeff told graduates that his grandfather taught him how “it’s harder to be kind than clever.”
Bezos started his first business at school. It was called The Dream Institute, and it was an educational summer camp for fourth, fifth and sixth graders. There were some books that Bezos required his participants to read. They were: The Lord of the Rings novel by J. R. R. Tolkien, Dune novel by Frank Herbert, Stranger in a Strange Land novel by Robert A. Heinlein, The Once and Future King novel by T. H. White, Watership Down novel by Richard Adams, Black Beauty novel by Anna Sewell, Gulliver’s Travels book by Jonathan Swift, David Copperfield novel by Charles Dickens, and Treasure Island novel by Robert Louis Stevenson, along with the plays Our Town by Thornton Wilder and The Matchmaker by John B. Keane and Thornton Wilder.
The family eventually moved to Florida and Jeff was transferred to Miami Palmetto Senior High School where he excelled at his studies and realized his love for computers. He was even invited to participate in the Student Science Training Program at the University of Florida, where he won a Silver Knight Award in 1982 and was a National Merit Scholar. Bezos graduated as the school’s valedictorian, and a National Merit Scholar, securing his spot at Princeton University.I went to Princeton specifically to study physics. – Jeff Bezos Click To Tweet
Bezos planned to study physics at Princeton University, but he soon decided to return to his love of computers. He graduated with two Bachelor of Science degrees in computer science and electrical engineering from Princeton University. “Mediocre theoretical physicists make no progress. They spend all their time understanding other people’s progress,” Bezos told Guardian, commenting on his decision.
After graduating, Bezos went to Wall Street where computer science was increasingly in demand and worked in several firms. The job at Fitel (a startup aiming to build a network to conduct international trade) had him flying every week between New York and London.
Bezos stayed in the finance realm with Bankers Trust, where he rose to vice president, and later the investment firm D.E. Shaw. The company specialized in the application of computer sciences to the stock market, and Bezos was hired for his overall talent in the field. At D.E. Shaw, Jeff met his wife MacKenzie, who was also a Princeton graduate. Jeff married MacKenzie Bezos in 1993. Bezos rose quickly through the ranks, and in 1990 became the youngest senior vice president in the company’s history.
It was at D.E. Shaw where Jeff Bezos first came across a digit that would change his life and the course of internet history. While surfing the web in search of new ventures for D.E. Shaw, Bezos found a statistic that World Wide Web was growing by 2,300 percent a month. Bezos immediately understood the potential prospects of selling products online. Shaw tried his best to convince Bezos to stay in his firm on a long walk in Central Park, but Jeff decided that he would rather try and fail than never try at all.
Bezos quit D.E. Shaw in 1994 and moved to Seattle to tap into the potentials of the internet market by opening an online bookstore. He made the decision by drawing up a list of possible products that he could sell via the Internet, including CDs, software, and hardware. In the end, books were the obvious choice because of the wide range of titles in existence. Another advantage of an internet store was a then-recent U.S. Supreme Court ruling that mail-order catalogs did not have to pay taxes in states where they did not have a physical presence. In other words – Bezos paid zero tax for the products he sold via the internet.There'll always be serendipity involved in discovery. – Jeff Bezos Click To Tweet
Bezos decided that Seattle would be a perfect place for his new business at the time because of the tremendous pool of hi-tech talent. While his wife MacKenzie drove them from Texas, he spent the time laying out a business plan on his laptop and calling up possible investors. Jeff Bezos managed to raise $1 million from his family and friends, enough to set up his business in the garage of his Seattle home.
Bezos initially incorporated the company as “Cadabra” on July 5, 1994. However, a year later he considered to change it when his lawyer misheard the word as “cadaver,” but that was not the worst one. Another alternative was “MakeItSo.com” – a catchphrase from Captain Picard in Jeff’s beloved Star Trek. It could have also been “aard.com,” which would help push the company to the front of website listings. Jeff and MacKenzie also registered the domain names Awake.com, Browse.com, Bookmall.com, and Relentless.com (the latter one still redirects to Amazon.com). Eventually, Bezos decided on Amazon.com after looking through the words that start with A in the dictionary. Bezos liked the resonance between one of the planet’s longest rivers and largest bookstore.
Jeff and MacKenzie set everything up in their two-bedroom house, with extension cords running down to the garage, and three Sun micro stations on tables that Jeff made from $60 doors. Ironically, staff meetings would take place at the local Barnes & Noble bookstore. When everything was ready, Jeff and MacKenzie hurled up 300 people to try the test site when it was up and running, and the code worked seamlessly on different computer platforms. After opening the website on July 16, 1995, they told their 300 beta users to spread the word around and set up a bell to ring every time Amazon made a sale. The Bell did not stay there for long as Amazon abruptly exploded selling books in all 50 states and 45 foreign countries within a month. By September 1995, the sales had summed up to $20,000 a week.
Bezos was determined on taking the company public with an IPO, and began recruiting large amounts of people. These included a few DESCO employees, executives from competing company Barnes & Noble, software company Symantec, and two people from Microsoft – vice president of engineering Joel Spiegel, and David Risher, who would later become head of retail. With a team of extraordinary people in his senior leadership ranks (who would formally become known as the J-Team) Bezos was convinced that “If we get this right, we might be a $1 billion company by 2000.”
Going public would not only solidify customer trust but would also outcompete other bookstores who would soon begin setting up websites of their own, Bezos thought. Barnes & Noble were the biggest competition. They possess the legacy of establishing ‘the book superstore,’ taking little independent bookstores out of business between 1991 and 1997, and revolutionizing bookselling. In 1996, their sales estimated to $2 billion while Amazon was lagging behind with $16 million that same year.
The Riggio brothers – Leonard Riggio and Steve Riggio – who owned Barnes & Noble, came to Seattle to have dinner to discuss a business deal with Bezos and Tom Alberg, founder and managing partner of the venture capital firm Madrona Venture Group, and a director of Amazon.com. Knowing Leonard Riggio’s character – a tough-as-nails businessman from the Bronx dressed in an expensive suit with a taste for fine art – the pair decided on a strategy of caution and flattery. The Riggios came on hard and threatening and announced that they were planning to open their own website – one that would take Amazon out of the competition. They offered various collaborations, including setting up a website together, and licensing Amazon’s technology. Bezos and Alberg said they would think about it at dinner, but after a phone conversation decided that this collaboration would not work.
While the Riggios were home setting up their website, Jeff Bezos and Amazon’s first CFO, Joy Covey (April 25, 1963 – September 18, 2013), traveled around the United States and Europe to pitch Amazon to potential investors. They had a solid background, with millions of sales within three years of existing, and an easily accessible single warehouse and inventory; in contrast with other retailers who had their products spread throughout stores around the country. They also used a ‘negative operating cycle’ which meant that customers would pay with their credit cards when the product shipped, but Amazon would settle its accounts with distributors every few months. Almost every investor asked the two whether they were going to expand to other categories, and, at the time, Bezos responded that they settled on books. He wanted to get some investments from an IPO, but he did not want his rivals to follow in his footsteps, hence withholding lots of valuable data from investors. Everyone firmly believed that once Barnes & Noble comes in, Amazon is Amazon.Toast.
On May 12, 1997, three days before the IPO, Barnes & Noble filed the lawsuit against Amazon in federal court for falsely claiming to be “Earth’s Largest Bookstore.” It happened during the seven-week SEC-mandated “quiet period” meaning that Bezos could not talk to the press before the IPO. Ironically, the lawsuit only gave Amazon more attention. The two companies competed fiercely for around a year after Amazon finally went public. Barnes & Noble boasted a broader catalog while Amazon tried to track down books from independent dealers and antique shops. Barnes & Noble got a $200 million investment from German media giant Bertelsmann and also took the company public. Bezos then swiftly expanded Amazon’s product line, and changed “Earth’s Biggest Bookstore” to “Books, Music and More” – leaving Barnes & Noble, as one writer put it, “wrapping its arms around the neck of a phantom.”
The stock traded below its IPO price at first and Bezos worried that the company might lose a significant portion of its investment. On May 15, 1997, the stock price was set for a $12-to-$14 range on NASDAQ (AMZN) on the IPO day. Then it increased from $14 to $16 before the Amazon’s investment bankers settled on the $18 price. Amazon.com raised $54 million in its IPO and the online bookstore market value reached $438 million. Amazon put 3 million shares on the block. It was a blockbuster year for Amazon as they experienced a 900 percent growth in annual revenue. Bezos’s family had each invested $10 thousand dollars from the start as a backup plan – it was a major part of their life savings. As six percent owners of Amazon, they officially became multimillionaires by the end of the decade, and Jeff was named Time’s Person of the Year in 1999.
Jeff Bezos and his engineers created a system 1-Click ordering process to further ease the use of Amazon.com in the late 90s. The system was determined to preload customers’ credit cards information and shipping address, offering to execute a purchase by simply pressing one button. On September 28, 1999, a nineteen-page application for Patent No. 5,960,411 entitled Method and System for Placing a Purchase Order Via a Communications Network was approved and the 1-Click system was officially trademarked to Amazon.com, Inc. Although it received heaps of criticism, some saying that its approval by the United States Patent and Trademark Office (USPTO) was just a sign of lazy bureaucracy, Bezos didn’t mind at all. He was in fact determined to exploit the status quo for any advantages that would put him on top of his competition. In 1999, after 23 days of obtaining the patent, Amazon.com, Inc. filed a patent infringement lawsuit against Barnes & Noble and won a preliminary ruling forcing the book giant to add an extra step to the checkout process on their website. Amazon licensed the patent to Apple Inc. in 2000 for an undisclosed amount, and would use it as a means to try and wipe out their new competitor – eBay.com – that appeared on the market in mid-1998.
Amazon & eBay
Starting out as a Silicon Valley startup called AuctionWeb on September 03, 1995, eBay proved to be a worrisome rival for the reason that it was growing rapidly, and unlike Amazon, it was profitable. The company made $5.7 million in 1997, $47.4 million in 1998, rising to a staggering $224.7 million in 1999. The business model was perfect: eBay took a small commission on each sale, but since the sellers were actual people auctioning their products to the highest bidder – there was no need for storing inventories, mailing packages, and warehouses. The website started off with collectibles and baseball cards, but it was well on its way to becoming the ‘unlimited selection’ store that Bezos always wanted.
Bezos invited eBay founder Pierre Omidyar and CEO Meg Whitman to Seattle in the summer of 1998, when eBay had just filed to go public (IPO). The two teams of executives, who would run into each other often in the next ten years, discussed various ways of working together. Omidyar and Whitman suggested creating links, so that for example if the product could not be found on eBay.com, the customer would be linked to Amazon.com and vice-versa. Bezos suggested the possibility of making a significant investment, which put off the two executives who left thinking that Bezos was offering to buy eBay Inc. for around $600 million. Although no formal propositions were made, the number was roughly the market capitalization that eBay was pursuing in its IPO. Omidyar recalls his tour of the Dawson Street distribution center, being impressed by the automation in the facility, and startled by workers with tattoos and piercings. Whitman was not impressed, telling Omidyar “Pierre, get over it. This is horrible. The last thing we’d ever want to do is manage warehouses like this.” The executives of eBay were extremely ambitious – just like Bezos at the start – thought they were pioneering a new type of virtual commerce, and it was pointless to convince them otherwise. They were also put off by Bezos’s famous distinctive laugh.
After failing to find a middle ground with the executives, Bezos had attempted to secretly start up his own auction project. The project was stationed on the second floor of Columbia Center and was called EBS, for “Earth’s Biggest Selection” (or as employees joked, eBay by spring). Amazon Auctions launched in March 1999 to a slow start. Bezos started putting lots of energy and money into the project, which included buying a company to broadcast auctions live on the Web and signing with Sotheby’s Auction House to focus on high-end products. The whole effort was meaningless. Customers, who were accustomed to traditional shopping and predictable prices, would find Amazon Auctions through a link on the Amazon main site – and ended up in a dingy second-hand leftovers market.
Amazon’s Rapid Expansion
The nineties were intense days at the company, but as Jeff Blackburn, responsible for product development and operations at Amazon, recalls that they were the most fun and challenging. Bezos’s ‘uplifting’ defeat was linked to the network effect – where goods or services become increasingly valuable as more people use them. The Internet was still fresh in the 1990s, and companies were still getting a grasp of how all these things work. Bezos saw the defeat as a crucial step along the way, and first in the series of critical experiments that would expand Amazon to third-party sellers. The zShops platform that had evolved from Auctions also failed to gain any momentum, and the company accepted that the Web’s small traders were inseparable from eBay due to the network effect. The most prominent user of these auction projects was, in fact, Bezos himself. This one time, he purchased a complete skeleton of an Ice Age cave bear for $40,000 and displayed it in the lobby of Amazon’s then-new headquarters at the Pacific Medical Center building with a sign that reads “PLEASE DON’T FEED THE BEAR.”
Amazon added clothing sales to the product line in October 2002, after partnering up with hundreds of retailers including Land’s End, Nordstrom, and The Gap. They also organized a subsidiary entitled Amazon Services which allowed customers to order goods from co-branded sites such as Borders and Toys ‘R Us. In 2003, Amazon launched A9 – a commercial search engine focusing on e-commerce sites. Around the same time, they opened an online sporting goods store, offering around 3,000 different brands. Amazon’s rapid expansion allowed Bezos to continue experimenting with new product lines and services. Some of them, like Amazon’s attempt at selling jewelry, didn’t work out. While others, like Amazon Prime, which offered a free two-day shipping within the United States for an annual fee of $79, proved to be a significant success. In fact, Prime’s success led to Amazon’s launch in Italy, France, Germany, the UK, Canada, and Japan over the next decade. In addition to securing the customers’ loyalty, Amazon Prime service further distanced Amazon from its competitors.Ebooks had to happen. – Jeff Bezos Click To Tweet
Amazon took another leap towards innovation in technology development by introducing a series of e-readers The Amazon Kindle in 2007. Flipping back to the first page from which the company started, Bezos sought to alter the way people acquire books, and the Kindle series was revolutionary in its purpose. The Kindle is considered primarily responsible for the establishment of the electronic book market internationally. This lightweight reading device helped Amazon secure 95 percent of the U.S. market for books until Apple challenged The Kindle’s supremacy with the introduction of the iPad in 2010. In response, Bezos cut down the Kindle’s retail price and added new features.
In 2011, Amazon decided to give Apple a run for its money with the introduction of the KindleFire – a tablet computer aimed at directly competing with the iPad. “We haven’t built the best tablet at a certain price. We have built the best tablet at any price,” Bezos boasted to ABC News. The KindleFire also introduced a ‘Whispersync’ feature allowing users with various devices to mark where they stopped in the book, and continue reading at the same place on another device – further altering the way we read.
It is remarkable to consider that Amazon’s sales revenue grew up by 122.56% from $48.08 billion (2011) to $107.01 billion (2015), but the net income growth remains volatile. For example, Amazon’s net income growth was negative and dropped by $241 million in 2014. However, in 2015, Amazon’s net income growth was positive and reached $596 million. But against the backdrop of rapidly growing sales revenue the net income growth appears negligible. Bezos plans to initially forego profits for establishing brand-name recognition. “To be profitable [now] would be a bad decision,” Jeff told PC Week in 1998. “This is a critical formative time if you believe in investing in the future,” Jeff commented to Entrepreneur.com. Bezos has poured most of Amazon’s revenue into marketing and promotion and hopes to be the No. 1 player in the business. The Amazon’s price per share grew up from $18.00 (May 15, 1997) to $549.42 (February 25, 2016).
In 2006, Jeff Bezos launched Amazon Web Services that includes a broad set of global compute, storage, database, analytics, application, and deployment services. Now they boast a mass of various subsidiaries, including a2z, A9.com, Amazon Web Services, Alexa Internet, Audible.com, comiXology, Digital Photography Review, Goodreads, Internet Movie Database, Junglee.com, Twitch, Zappos (the full list of Amazon’s properties is available at Quora), which allows business clients to employ Amazon’s online infrastructure technology. In 2012, the site launched Amazon Studios, a crowdsourcing site like Kickstarter only focused on the development of feature films and TV shows. Fortune magazine named Bezos “Businessperson of the Year” in 2012.
Pioneering e-commerce, reinventing book trade, and becoming one of the most prominent figures of the internet was only a portion of Bezos’s goals. His long term plans have always been grand, and seemingly out of reach – and the success of Amazon served as a gateway for Jeff to finally realize his wild ambitions. Bezos’s mother keeps a copy of a speech he made while back in school where he declares his goal of establishing a fleet of habitable orbiting space stations, turning Earth into one big nature reserve. This ambition of his was not left abandoned.
In 2004, Bezos founded an aerospace company named Blue Origin, aimed at developing new technology for spaceflight, with the ultimate goal of establishing “an enduring human presence in outer space.” The company owns a 26-acre research campus just outside Seattle, and a private rocket launching facility in West Texas. On November 24, 2015, Blue Origin made headlines when they successfully managed to send a rocket to suborbital space and land it safely onto a landing pad after takeoff while they were testing their New Shepard space vehicle.
The rarest of beasts – a used rocket. Controlled landing not easy, but done right, can look easy. Check out video: https://t.co/9OypFoxZk3
— Jeff Bezos (@JeffBezos) November 24, 2015
New Shepard is a multi-passenger rocket-propelled vehicle designed to establish travel to suborbital space at competitive prices. The rocket landing has been deemed ‘historic’ as no other space company has managed to pull off such a feat. The success of this mission means a significant decrease in the cost of spaceflight and a step closer to establishing an opportunity for the general public to engage in space travel.
Just a bit later, Jeff Bezos and Elon Musk, the CEO of SpaceX, had a Twitter smack talk regarding their rockets.
— Elon Musk (@elonmusk) November 24, 2015
Elon Musk continued the discussion with Jeff Bezos and sent him a tweet that was meant to describe the difference between orbital and suborbital flights.
It is, however, important to clear up the difference between “space” and “orbit”, as described well by https://t.co/7PD42m37fZ
— Elon Musk (@elonmusk) November 24, 2015
It is worth mentioning that both companies, Blue Origin and SpaceX, did an excellent job. However, orbital and suborbital flights are different types of spaceflights that cannot be compared, which is better or worse. Soon, one of the Reddit’s users zlsa drew a visual illustration on SpaceX Falcon 9 vs Blue Origin New Shepard rockets’ trajectory that helped to clear the difference between those types of spaceflights.
The Washington Post
On August 05, 2013, Bezos was on the news for having entirely purchased The Washington Post for $250 million in cash. “The Post could have survived under the company’s ownership,” company’s chairman and chief executive Donald E. Graham says, “but we wanted to do more than survive. I’m not saying this guarantees success, but it gives us a much greater chance of success.” Bezos reaffirmed that he did not seek to alter the values of The Washington Post, but merely to fix its focus on the public. “Our touchstone will be readers, understanding what they care about – government, local leaders, restaurant openings, scout troops, businesses, charities, governors, sports – and working backwards from there.” The Graham family – descendants of Eugene Meyer, who acquired The Post in 1933 – had owned it for four generations. Bezos announced that he was meaning to maintain the existing management, expressing respect and admiration for the Graham family.
Personality Traits & Leadership Qualities
Bezos is known for his double-personality that turns him from a kind person into a rough executive inducing fear and respect in his employees. A hyper-intelligent, ultra-driven individual, he expects everyone around him to behave likewise. Amazon staff are said to be living in fear of his abrasive flare-ups, including “Why are you wasting my life?” and “Are you lazy or just incompetent?”
Jeff Bezos seems to have no problem running the company while still personally reading feedback from customers. “We research each of them because they tell us something about our processes. It’s an audit that is done for us by our customers. We treat them as precious sources of information,” senior Amazon vice president Jeff Wilke explains. When there is a real issue, the consequences can be harsh on the employees responsible for the issue. There is an official system within Amazon that ranks the severities of its internal emergencies. A Sev-5 would be a relatively standard problem that engineers solve all the time while a Sev-1 is an urgent issue that gets everyone on their toes as it requires an immediate response. There is another level of severity that has employees sweating just at the sight of it. Informally dubbed by the employees, the “Sev-B” is anyone’s greatest nightmare at Amazon. Sev-B means when an employee receives an email directly from Jeff Bezos containing the notorious question mark. When a someone receives it, it basically has an effect of a ticking time-bomb. They drop everything they’re doing and give full attention to the issue that the CEO is highlighting. Within a few hours, the employee has to prepare a formal thorough explanation of how the problem occurred to a team leads who will have to review the report before sending it to Bezos. It is the company’s way to ensure that the customer’s voice is always heard inside Amazon.You want your customers to value your service. – Jeff Bezos Click To Tweet
Bezos always moves faster, makes his employees work harder, and pursues both significant innovations and small ones. The superb image for Amazon is not just the everything store, but ultimately the everything company. The future has many things in store for Amazon. They still haven’t achieved next-day or even same-day delivery for Prime members and they are still set to expand their grocery service Amazon Fresh beyond Seattle, Los Angeles, and San Francisco. Jeff Bezos expects Amazon’s mass expansion to as many of countries as possible. Also, wants their customers to eliminate the need to buy products from manufacturers, by using 3D printer technologies to manufacture their own and so on.
It is unknown whether Jeff Bezos’s wild ideas and an active imagination are rooted in his early love for science fiction or it is just his personality trait. Bezos is known for thinking outside the box, re-shaping the box, or tossing it in the trash altogether. From revolutionizing the way we buy and read books, to creating a private spaceflight company aimed for the people, to launching a plan for the use of drones in package delivery, Bezos always challenges the norm. He believes that breaking away from the pack and making these extraordinary decisions is what truly leads to innovation. It is the sole element that all successful leaders seem to possess. Jeff Bezos will only get bigger, and his innovations wilder until either he decides to stop, or there is no one left to stop him.
Jeff and his wife MacKenzie Bezos have four children, three sons and one daughter adopted from China.
Jeff Bezos life story shows that he achieved all his success thanks to his strong desire to learn new technologies, hard work and, of course, thanks to his disctintive leadership qualities. We hope you have enjoyed exploring Jeff Bezos biography and success story of Amazon and Blue Origin and it has inspired you to new discoveries.
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