When Ann Hiatt received the call that a helicopter carrying Jeff Bezos had crashed in the West Texas desert, her first thought was: what have I done?
Hiatt had booked the flight for her boss so he could scout locations for Blue Origin, his embryonic space exploration company. "Not only had I maybe just killed Jeff Bezos," she remembers thinking in the panic of the moment, "but the entire company might have just gone down."
Thankfully Bezos and the others on board escaped mostly unscathed. Details of the March 2003 accident – which left the passengers crawling out of a wreckage into a creek – were kept secret for more than a week, sparing Amazon’s staff and investors from having to ponder a future without Bezos at the helm.
"Amazon would not have survived without him," says Hiatt, who left the company in 2005. "I would bet everything on that. It just wasn't there yet."
Eighteen years on and the question of whether Amazon can survive without Bezos remains a pressing concern. Hiatt is telling her story just days before the Amazon founder is due to step aside as chief executive, and just a few weeks before the 57-year-old is blasted into space; one of the first four human passengers on board a Blue Origin rocket.
News of both of these monumental plans, announced separately, did little to move Amazon’s stock price or dent its $1.7 trillion (€1.4 trillion) market value. The shrug from the markets is testament, perhaps, to the trust investors now have in the corporate machine Bezos has created over the past 27 years, one which is now widely seen as run on well-oiled processes for developing new products, managing the way ideas are discussed and making big decisions.
It is also a sign of trust in Bezos's replacement, Andy Jassy, who is best known for creating Amazon's colossal cloud computing business, AWS.
"I would not say he's Bezos's alter-ego as a visionary, that's not who he is," says Michael Skok, a venture capitalist and close associate of Jassy for several years. "[But] he really encourages the creatives to get creative, to get out of their comfort zone, and to go do something challenging – to break the rules, to find a way to do something new."
Testifying to Congress
The imminent promotion of the 53-year-old Jassy – who takes over on Monday, the anniversary of Amazon’s creation in 1994 – means it is no longer unthinkable to imagine the company without Bezos as its chief executive. Indeed, some believe his departure is crucial in order for the company to thrive against the intense political and regulatory scrutiny it faces, with some calling for it to be broken up.
Several people who have worked with Jassy speak of his affable yet precise manner – with an impressive recall of relevant data and technical detail – that should serve him well under the political spotlight, as he contends with unprecedented levels of hostility aimed broadly at Big Tech, and Amazon in particular.
“This is where he’s different to Bezos,” says Skok. “He’s massively factual in his arguing, and his approach is to get into the weeds if you need to go toe-to-toe with people on details.”
A cluster of Big Tech bills introduced in Congress in June could disrupt and maybe even dismantle Amazon's power, while the US Federal Trade Commission - now chaired by Amazon critic Lina Khan – is investigating the company, and is expected to examine its recent $8.45 billion deal to acquire movie studio MGM. Amazon also faces several individual investigations from state attorneys-general, ranging from pricing to misuse of competitors' data.
In Brussels, Amazon is the subject of two significant investigations, in part looking at the potential conflicts arising from the company’s dual role as both merchant and market owner of Amazon.com.
There is hope within Amazon, according to several people familiar with its political strategy, that Jassy will replace Bezos as the public face of Amazon. The goal is to swap out the world’s most recognisable businessman, who to some is the very embodiment of capitalism’s excesses, for an understated sports fan. Jassy’s stake in Amazon is worth just over $300 million, compared with the $175 billion fortune of Bezos.
"I think one of the major differences between the Bezos and the Jassy regimes [will be] that Andy's got himself a new job: testifying to Congress," says Tim Bray, a former senior AWS engineer who left the company in 2020 in protest at its firing of some whistleblowers.
And although Amazon appears to have seen off an imminent unionisation threat at a plant in Alabama, Jassy will take up his post just as the formidable Teamsters union declares Amazon a top priority nationwide.
“Jassy is going to have to put way more energy into Amazon’s relationship with society in general, and government regulation, than Jeff ever had to,” Bray suggests. “Clearly the pendulum has swung and Big Tech is not flavour of the month.”
Cloud maker
A Bezos acolyte for more than two decades, Jassy is revered internally and in the wider corporate world for being instrumental in the creation of AWS, the engine room of Amazon's profits and the focus of G7 efforts to wring more tax out of the company. The business rapidly reversed the view on Wall Street that Amazon – which until AWS dealt only with low-margin retail – would perhaps never become a huge moneymaking enterprise. No one thinks that now. In 2020, though accounting for just 12 per cent of Amazon's total revenues, AWS made up almost 60 per cent of the company's yearly operating income.
Once the transition of power takes place, Bezos will become executive chair – away from the day-to-day running of the company, but still providing input on the most pivotal decisions, what Amazon executives call its “one-way door” moments, those where there is no going back. That won’t be often, says Jassy.
“There are only about 1 or 2 per cent of the decisions that are truly ‘one-way doors’ where you can’t walk back through it easily,” he told employees at an internal meeting in June. “Those [decisions] you’ll go slower on ... but just figuring out how to keep the culture, to have a high rate of experimentation per unit of time, is incredibly important.”
In a partial transcript of the meeting, provided by the company, Jassy said recruitment would be another priority: working out how best to bring in people from the outside who might not share the company’s “DNA”, at a time when Amazon – which has recruited more than 500,000 workers since the pandemic began – is growing extremely quickly.
“Another thing that happens over time as companies get larger is sometimes they move from that insurgent mindset into more of an incumbent mindset,” Jassy said. “And they settle for things that are good enough.”
“I feel very strongly,” he added, “that we have to keep inventing and [betting] in a significant way, and we will.”
Jassy grew up in the affluent town of Scarsdale in New York State, attending high school there before going to Harvard. He was hired by Amazon straight out of Harvard Business School in 1997. At the time, the company had only a few hundred employees and was about to go public with a stock price of about $1.50, when adjusted for subsequent stock splits.
“I took my last final exam of graduate school the first Friday of May 1997,” Jassy said during a 2019 interview with Recode. “I started at Amazon the next Monday, I didn’t know what my job was going to be.”
Shortly after, he was asked to become “technical adviser” to Bezos. It is a position that has become widely known inside the company as Bezos’s “shadow” but it is a demanding task, says Hiatt. “He was trained to think like Jeff, to challenge his ideas,” she says. “His entire full-time job was to be that intellectual sparring partner for him, because no one else in the company could do that.”
Jassy was initially reluctant to take on the adviser role, worried he would not be able to claim any major achievements as his own. But by going on to lay the foundations of AWS, few would now question his credentials and ability to handle a huge business - and perhaps Bezos himself.
Wendell Weeks, chief executive of gadget glassmaker Corning, and a non-executive member of Amazon's board since 2016, says Bezos and Jassy have shared meaningful disagreements down the years. While declining to give specifics, Weeks says Jassy would often come out on top.
“At Amazon,” Weeks says, “we have this approach, which is even if you’re in disagreement, the question becomes: can you ‘disagree and commit’? Jeff has many times disagreed and committed to something Andy has wanted to do, so that will feel very normal.”
Bezos ‘breathing down his neck’
Yet, even with this history, some feel Jassy will find it difficult to forge a path independent of his boisterous mentor.
"He is going to have to prove to the market that he has an independent mind," says Sonia Kowal of Zevin Asset Management, an Amazon investor. "He certainly can't change the company's strategy if Bezos is breathing down his neck."
In his final letter to shareholders as chief executive, Bezos said he hoped to improve Amazon’s reputation as an employer. For a company that now has a workforce of more than 1.3 million people that is a challenge. An all-consuming one, say some investors, given the global scale and the risk of continued reputational damage.
“He’s talking about how he’s going to lead an effort to make Amazon ‘Earth’s best employer’ and ‘Earth’s safest place to work’,” says Kowal. “That doesn’t sound like Bezos stepping away. That sounds like doubling down on the issues that he helped create.”
Zevin led a recent failed attempt to force Amazon, via a shareholder proposal, to install an independent chair instead of Bezos. Shareholders also voted down a demand for more detailed information on the gender pay gap at the company, amid continued complaints that Amazon’s upper management remains overwhelmingly male and overwhelmingly white.
Men made up 55 per cent of employees at the company in 2020, but 78 per cent of senior leadership. Part of the problem, says one former senior AWS employee, is that the heralded Amazon culture rewards behaviours that can hold women back – and they do not anticipate any changes under Jassy.
“I certainly cannot see a woman succeeding there,” the person adds. “It’s a deeply troubling culture. It’s a dog-eat-dog world. Everybody competes. Being arrogant and boorish is considered a sign of leadership there, and that goes all the way to the top.”
Responding to the proposal, Amazon said in May it was “equally committed to increasing gender and racial diversity, including among our leadership ranks”.
Weeks adds: “We can and we will do better. It takes a while, when you have this size, this scale, it just takes a while for the flywheel to get moving - and then you start to see the results.”
No longer ‘Day 1’
Some investors raise doubts of a different kind. "We are wary that Bezos stepping back from the CEO role may reduce the company's appetite for bold experiments," read a recent note to investors from Tom Slater, joint manager of the Scottish Mortgage Investment Trust, announcing it had reduced its holdings in the company.
“It no longer has a founder CEO,” the note continued. “We fear that in his inimitable terms it is no longer ‘Day 1 in Seattle’ though the road ahead is still long and profitable.”
The “Day 1” mantra is core to the company’s leadership philosophy, protecting it, says its founder, from complacency. “Day 2 is stasis, followed by irrelevance,” Bezos explained to staff at a meeting in March 2017, “followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”
Jennifer Cast, who was one of Amazon’s first 25 employees and worked closely with Jassy for more than a decade, says she is confident his tenure will not create the kind of stagnation Bezos warned about.
“Jassy would never take a role where he was treading water,” says Cast, who is now a consultant. “If you look at what distinguishes Andy from most people in the company, it’s his appetite for learning. I mean, he’s ravenous.”
In keeping with another Amazon principle – frugality – there is no talk from the company of a lavish send-off for their founder. Unless, of course, you count the July 20th space trip – for which a seat alongside Bezos and his brother Mark was sold at auction, to an as-yet unknown bidder, for $28 million.
“Jeff’s life is cool,” says Weeks, before dodging a question on whether the board had asked him to step aside as CEO before heading to space.
“Listen, I’ve got a lot of confidence in Blue Origin. If that other seat didn’t sell for more than I could afford, I’d be right next to him,” says Weeks. “I think it’s going to be just fine.” – Copyright The Financial Times Limited 2021
