Jeff Bezos left a Wall Street investment firm in 1994 to start online bookseller Amazon.com in Seattle, where, thanks primarily to the presence of Microsoft, software engineers were plentiful. Shortly after developing a beta version of his website at a rental house in Bellevue, Bezos moved Amazon into cramped quarters in the SODO neighborhood south of downtown Seattle. Amazon.com officially launched on July 16, 1995, selling $12,000 worth of books in its first week. Business grew quickly, and in 1998 Amazon relocated to the old U.S. Marine hospital on Beacon Hill. By 1999, Amazon had more than 10 million customers and was the world's largest online retailer.
Birth of an Idea
Jeff Bezos (b. 1964) grew up in Houston and graduated from Princeton University in 1986. With a degree in electrical engineering and computer science in hand, Bezos then headed to Wall Street, where he spent five years with different financial companies before landing a job with D. E. Shaw and Company. DESCO, as it was known, was unique among investment firms. Its founder, David E. Shaw, had been a computer-science professor at Columbia University. Shaw’s expertise led to the creation of an innovative and technology-driven approach to investing. Computers and formulas were the firm's bread and butter in reading opportunities and trading in global markets. "David Shaw was the one who revolutionized Wall Street by introducing data. And I think Jeff really embraced that, that idea that, 'hey, if you have data, ultimately, you win,'" said former Amazon chief scientist Andreas Weigend ("Amazon Empire ...").
The firm was an early leader in computer-guided investment. Shaw sought scientists and mathematicians, rather than finance executives, to staff the growing company. When a headhunter entreated Bezos to meet Shaw, Bezos clicked with the dynamic and forward-thinking leader and joined the team in his mid-20s. It was at DESCO that the idea for Amazon took shape. Shaw was mulling various profitable applications of the burgeoning internet; Bezos was tasked with exploring the ideas and mapping their potential. They worked on platforms for e-trading and talked about something they called "the everything store" (Stone, 3). At its core, the business would be an online store that sold almost any type of product and delivered it faster than competitors. Bezos studied retail categories to determine the most marketable product for online distribution. His research pointed to books.
Betting on Books
It was at DESCO that Bezos met MacKenzie Tuttle (b. 1970). A San Francisco native, she also had graduated from Princeton, where she studied English under famed author Toni Morrison. Tuttle was hired at DESCO as an administrative assistant and went on to work with Bezos. She reportedly was drawn to his signature loud laugh, and the two dated three months before getting engaged. They were married in 1993 in West Palm Beach, Florida.
In 1994, the potential of the internet was starting to emerge and DESCO was equipped to capitalize on it with its stable of math and science professionals. "The wake-up call was finding this startling statistic that web usage in the spring of 1994 was growing at 2,300 percent a year. You know, things just don’t grow that fast. It’s highly unusual," Bezos recalled ("A Look Back ..."). Bezos, who had been brainstorming ways to profit from the nascent internet, realized he wanted ownership of his idea to sell books online. He went to Shaw and announced that he would be leaving the company to start an online bookstore. Shaw understood his ambition and desire to strike out on his own, but asked Bezos to consider the well-paying job he currently had, and that DESCO could potentially be a competitor if he chose to leave.
At this pivotal moment Bezos employed what he called the "regret minimization framework" (Stone, 27). He considered what he would regret when he was 80: leaving his Wall Street job or missing out on what he thought was going to reshape everything: the internet. In those terms, he said the decision was easy.
While he and MacKenzie were gainfully employed and living comfortably in Manhattan, she supported the move, and her involvement in a string of decisions, along with her operational tasks, were instrumental to the company’s early development. The entire venture was a leap of faith, and her willingness to uproot and give the idea a shot was a testament to her spirit of entrepreneurship. Bezos said as much in a 2010 Princeton commencement speech, "I told my wife MacKenzie that I wanted to quit my job and go do this crazy thing that probably wouldn’t work since most startups don’t, and I wasn’t sure what would happen after that," he said. "MacKenzie ... told me I should go for it" ("MacKenzie Bezos and the Myth ...").
Where it Started
While Seattle has been home to many large companies, serving as Amazon’s headquarters has had an outsized impact on the region. From jobs to traffic to housing, the company and its thousands of employees have given Seattle its share of growing pains. Looking back, it may seem hard to believe that the world’s largest online marketplace started in a suburban garage.
Jeff and MacKenzie Bezos set up shop in a three-bedroom rental house in Bellevue in 1994. The location was important. Amazon was an innovative software company and the region already was home to fast-growing Microsoft. Nearby University of Washington churned out engineers from its computer-science program. That gave the company proximity to computing culture and talent. Bezos intentionally stayed away from Silicon Valley because of sales taxes the company would incur in California.
It was in the garage of the Bellevue home that Bezos built some desks, attaching legs to doors from Home Depot. The practice continued after Amazon relocated to the SODO neighborhood in Seattle. "We happened to be across the street from a Home Depot," said early employee Nico Lovejoy. "He looked at desks for sale and looked at doors for sale, and the doors were a lot cheaper, so he decided to buy a door and put some legs on it" ("How a Door Became a Desk ..."). The door desks grew in number as Amazon expanded and have become legendary as a symbol of the company’s frugality and resourcefulness.
Early on, Jeff and MacKenzie Bezos were joined by Shel Kaphan, who began building and designing a rudimentary website. Bezos learned of Kaphan’s expertise through a connection at D.E. Shaw. Kaphan was Amazon’s first employee and some in the industry consider him a co-founder. "I mean, nobody at the beginning had any clue how big Amazon could become," said Kaphan in 2011. "Nobody. Certainly not Jeff. I have spreadsheets of his projections from when he was trying to hire me. And I don’t remember the specific numbers, but it was a lot, lot smaller than it turned out to be" ("Meet Amazon.com's First Employee ...").
With its few dedicated employees, Amazon started on a shoestring budget. Bezos initially invested $10,000 and took out $84,000 in loans over the next year. Then the growing business received a $150,000 infusion from his parents in 1995. They reviewed the business plan and without fully understanding it, said they were "betting on Jeff" (Stone, 33). Meanwhile, MacKenzie Bezos took on some of the practical tasks inherent to a start-up. Along with writing checks and bookkeeping, she reportedly sealed a freight contract at the onset of the company’s business dealings. She was also on the ground, filling orders alongside early employees and pitching in during breakneck holiday shifts. (She would step away after several years to focus on writing and family. The couple divorced in 2019, after which she changed her name to MacKenzie Scott. As of 2025, Scott retained a 4 percent ownership stake in Amazon and had a net worth of more than $27 billion.)
Ready to Launch
Amazon wasn't long for Bellevue. After a few months and the development of a beta website, it relocated to SODO, an industrial area lined with warehouses. In a small office and a 200-square-foot warehouse, they prepared to launch the site. The original homepage was simple, emblazoned with the words "One million titles, consistently low prices" in blue underlined text. The upper left-hand corner featured a logo consisting of a blue capital letter 'A' with a river running through it. The site had a shopping basket and a payment platform. The engineers created a search engine for customers using a digital catalog of books with ISDN numbers.
Bezos registered several domain names as he and early employees considered a strategic company name. It was a priority for the name to start with the letter 'A' because the first web directories listed sites alphabetically. Bezos went through the dictionary and landed on Amazon. The name appealed to him because the largest river on Earth suggested the enormity of what he intended to achieve with online book sales.
Amazon's soft launch in 1995 quickly attracted business and its small team was overwhelmed with orders. A bell would chime whenever an order was submitted, but within a few weeks, employees turned off the notifications. At this early stage, Amazon didn’t house books on-site. When an order came through, Amazon purchased the book from a distributor, repackaged it, and then shipped it to the customer. It could take a week or longer to receive the book. Amazon offered 10 percent off the list price of any title and 40 percent off the list price of bestsellers.
Bezos felt that it would be a competitive advantage to have book reviews on the site; employees and friends wrote the first posted reviews. This would be one of many tools used to attract consumers with community input.
On July 16, 1995, the website had its official launch. Early Amazon received orders for all types of eclectic titles and packed and shipped the books themselves. With $12,000 worth of orders in the first week and $14,000 in the second week, the company was off to a brisk start with too few employees to manage the avalanche of orders. From its infancy, a culture of long hours and complete focus on the company were ingrained in employees.
Susan and Eric Benson, a married couple, joined Amazon in 1996 after working at internet provider Netscape. Susan became the company’s managing editor and Eric worked as an engineer. They spent so many hours at the office that they requested that their Welsh Corgi accompany them to work. Permission was granted and Rufus became a part of the team. It’s been reported that he was part of site updates. "You would hover Rufus over the keyboard and drop his little paw down onto the keyboard to flip the site," Susan said. "It was silly and adorable and people loved it" ("Meet One ..."). Rufus had a lasting impact on company culture: Employees can bring their dogs to work, and a building on the South Lake Union campus is named for Rufus.
Soon after launch, the website Yahoo reached out to Amazon about featuring Amazon on its site. Bezos and his team weighed whether they could handle more exposure as they struggled to keep up with business. Ultimately, they went ahead with it, and the bump from Yahoo’s listing extended Amazon’s reach. It started getting orders from around the world.
Cash Infusions
Needing more money for operations and staffing, Bezos met with Seattle entrepreneur Nick Hanauer to court investors. With Hanuer’s help, Bezos pitched Amazon to 60 potential backers. While some were intrigued and signed checks, others were less convinced that the business model would succeed. Ultimately, 22 investors supported the venture at the $50,000 level, which brought in $1.1 million to expand operations. It did come at a cost: Bezos gave up 20 percent of the company in exchange for the funding. Investors now had a stake in the business.
The flood of cash allowed Amazon to expand across departments and revamp servers and software. The infusion also supercharged the young company with a newfound confidence in acquiring capital. Bezos saw the potential for rapid growth if Amazon could tap into the river of funds starting to flow to the fledgling "dot com" startups of the era. He approached a couple of venture capitalists and essentially shopped the company around looking for the best deal: the most backing and the highest valuation of Amazon. Connecticut-based General Atlantic showed interest and offered a $10 million valuation for the company. This spurred Amazon’s leaders to muse over what was possible. They reached out to John Doerr at one of Silicon Valley’s leading venture-capital firms, Kleiner Perkins Caulfield & Byers. With an offer on the table from General Atlantic, Bezos felt emboldened to negotiate for something bigger with Doerr. He invited Doerr to Seattle to see the operation in action and consider making an offer. Doerr was impressed by Bezos’s energy and technical knowledge. His firm entered into negotiations, competing with General Atlantic. They ultimately closed a deal granting $8 million for a 13 percent stake in Amazon, which they valued at $60 million. Bezos agreed to the deal if Doerr would sit on the Amazon board.
It was 1996, and with money pouring in, Bezos adopted the ethos: Get Big Fast.
Competition and Expansion
Coinciding with the advent of online retail, the book industry went through an internal shakeup. Barnes & Noble and Borders had taken over the brick-and-mortar space with "big box" stores. They had huge inventories and sold at reduced prices. Barnes & Noble alone captured $2 billion in book sales in 1996. Meanwhile, smaller, independent bookstores were disappearing. From 1991-1997, the American Booksellers Association recorded a loss of 1,200 stores.
While Amazon appeared to be a small player with just $16 million in sales in 1996, write-ups about Amazon in the media got the attention of executives at Barnes & Noble, who initiated a meeting with Amazon. The company heads discussed Barnes & Noble’s plan to launch its own website and possible ways the companies could partner. Ultimately those ideas didn’t receive much support. Amazon pushed forward with its plan for rapid growth on its own. The big-box stores entered the online market separately.
Soon after Amazon received its venture-capital funding, Bezos recruited veteran executives across departments to lay the groundwork for an Initial Public Offering (IPO). The senior leaders comprising what Bezos called his J team were plucked from all industries. Joy Covey, a Harvard business and law graduate, was working for the Silicon Valley digital audio company Digidesign. She joined Amazon as Chief Financial Officer and headed up efforts to take the company public. Later, Covey was named one of Forbes Magazine's 50 most powerful women in 1999. "As CFO, her feat was convincing Wall Street that a profitless company was worth $22 billion," the magazine wrote ("Joy Covey ...").
Covey’s role in securing Deutsche Bank for a stock launch was a particular accomplishment because of Bezos’s decision to forgo profits. It was clear that Amazon could attract investors and fulfill operations without profits, at least in the early years. Bezos described the situation in The New York Times in 1997: "We are not profitable. We could be. It would be the easiest thing in the world to be profitable. It would also be the dumbest. We are taking what might be profits and reinvesting them in the future of the business. It would literally be the stupidest decision any management team could make to make Amazon.com profitable right now" ("Payoff is Still Elusive ...").
This was all part of the Get Big Fast strategy. In less than two years from the site’s launch, Amazon went public for $18 a share on May 15, 1997, and was valued at $429 million. The IPO stated clearly that the company was not profitable. But investors were not deterred by these losses because Amazon had solidified its place as the top internet retailer and its popularity soared. Since its launch two years ahead of the competition, internet users had become familiar with its functions and come to enjoy ordering items online.
To capitalize on Amazon’s momentum and stay ahead in online retail, Bezos kept his foot on the gas. Through a high-yield bond, the company brought on $326 million with the plan to get more warehouse space and expand its offerings beyond books. In-house research indicated that the most strategic products to add to the site were music and DVDs.
Bezos continued to seek long-term growth over short-term profit and kept betting on the internet. Part of the strategy was to make deals with other websites for advertising and sales. If Amazon was the exclusive bookseller for Yahoo or MSN, it could reach a cache of web users who were still learning to navigate the internet. The company sank cash into these partnerships, refusing to part with stock, purchasing stakes in numerous early sites such as Drugstore.com and the movie database IMBD.com.
The period from 1998-2000 is commonly known as the dot com bubble. The advancement of the internet, coupled with flowing capital and speculation, led to ballooning values for new companies in the online space. And while Bezos and his team were spending millions to acquire companies at a frantic pace, Amazon’s internal rhythm was so dynamic that the potential of these investments largely wasn’t realized. The company’s staff was overloaded with its own operations and didn’t have time to dedicate to these new acquisitions. When the dot com bubble burst in 2000, most of these projects failed.
Owning Online
Part of Amazon’s executive search in the late 1990s tapped into the superstore Walmart. Amazon pulled several executives from Walmart's offices, professionals with retail expertise on a global scale. In 1998, Walmart ranked No. 4 on Forbes’s Global 500 list for corporate revenue. This was a company that understood how to manage enormous warehouse inventory and competitive pricing. The retail veterans who joined Amazon were charged with setting up massive distribution centers in the U.S, United Kingdom, and Germany. The Walmart employees brought along their company culture of frugality and "bias for action." Bezos held these same values, and Amazon foresaw significant growth with its innovative employees bolstered by the experienced Walmart arrivals.
With increased storage capacity, Amazon added toys and electronics to the site. The company touted the opportunity for buyers to shop for several things at once and combine shipping costs. E-Toys was already established as the go-to site for online toy shopping, but Amazon entered the arena with full confidence due to its wide customer base and product reviews.
In 1998, Amazon leased part of the 1930s-era Art Deco Pacific Hospital (formerly the U.S. Marine Hospital) on Beacon Hill in Seattle for its corporate headquarters. The next decade would bring expansion into new markets and the launch of Amazon Prime and Kindle e-reader products. In 2011, the company left Beacon Hill for a multi-building campus in Seattle’s South Lake Union neighborhood.
With 10 million customers in 1999, Amazon topped the list of online shopping sites. The combination of convenience, range of products, accessible technology, and price cuts led to the historic rise of the e-commerce site during a wave of unprecedented growth in the market. In the years to come, Amazon would continue as an industry leader, but also encounter litigation over consumer privacy and antitrust issues. Over its 30-year rise, Amazon grew to be one of the Seattle area’s top employers, along with Boeing, with 65,000 employees in 2025. Its global workforce reached 1.55 million in 2024, and Amazon is among the world’s largest corporate employers. With a net worth over $2 trillion as of the first quarter of 2025, the company had achieved a spot among the world's top corporate entities. Amazon indisputably shaped the online retail space, moving quickly to build a model that has endured through the early development of the internet.
