ColdFusion - How BIG is Amazon? (They Help Power the CIA and Netflix!)

Starting point is 00:00:00 You are watching Cold Fusion TV. Hi, welcome to another Cold Fusion video. Even a decade ago, the idea of browsing online for almost any item that you wanted and having it delivered to your door within the same day would have been seen as impractical and even science fiction. But this is what Amazon does in Europe and the United States on a daily basis. Amazon has streamlined and perfected its internal process so much that this science fiction has become a reality. The company hosts the sale of 350 million products in 185 countries.

Starting point is 00:00:43 But that's not all. From scientific research to vast web servers, the full scale of what Amazon is involved in may surprise you. So how did this company start? And how big are they today? And what are some interesting facts about Amazon? In this video, we'll explore and find out. In a proverbial echo to Apple's founding, Amazon was also started in a garage, though in Seattle, Washington this time and not Silicon Valley.

Starting point is 00:01:11 The company was started by Jeff Bezos and the idea first came to him while he was working at the Wall Street firm called D.E. Shaw and Co. as vice president. The founder of the Wall Street firm, David Shaw, had used the internet during his days as a professor in the early 1990s and he saw the potential it held for the future. Imagine a world where every word ever written, every picture of a picture of a paper. Every film ever shot could be viewed instantly in your home via an information super highway. Bezos also saw the potential of the internet and noticed its rapid increase in users. During discussions between Bezos and Shaw, the concept of an online store with unlimited products came up,

Starting point is 00:01:49 and the idea for Amazon was born. Bezos concluded that at first, an online store that sold everything would be impractical. He decided to narrow down the list to 20 possible product categories, including computer, computer software, office supplies, apparel and music. The option that seemed to fit best for a first product was books. Books were the same no matter where you bought them from and offered diversity in terms of choice. Together with his wife McKenzie and a startup veteran, Shell Caphan, Bezos first registered his new company idea in July 1994 as Cadabra Inc.

Starting point is 00:02:25 Unfortunately, the name was often misheard as Cadava Inc. A company name that could be misheard as a dead body wasn't ideal so that was a very much they decided to pick a new one. While searching for a new name in October, Bezos came across Amazon in the dictionary. He used Amazon because it was the largest river and mirrored his goal of becoming the biggest online retailer globally. Sites were also listed alphabetically back then and he wanted his site to be among the first web pages shown. On November 1, 1994, Amazon.com was registered. To leave a high-paying, high-profile Wall Street job to start an internet company in 1994

Starting point is 00:03:03 was crazy, but Jeff Bezos had a strong vision. Upon beginning Amazon, one of their driving goals was to build better products than existing online bookstores at the time. The first book was sold April 3, 1995. It was a computer modeling book. A few months later, the site went live and became visible to all users of the web. It opened a searchable database of over 1 million titles, even though it only had around 2000 in stock at the Seattle warehouse. The rest would be ordered as needed from wholesale sellers.

Starting point is 00:03:34 Interestingly, there was no one assigned to pack the books at Amazon at the time, so they would take orders during the day and pack books during the night. The books would then be driven to the post office the next morning. After being featured on the home page of a new site called Yahoo, Amazon became swamped with orders and within the first month, they had sold books in 45 countries. In late 1995, Amazon was granted one million dollars in investment capital to expand their business and keep up with increasing demand through server upgrades and the hiring of more staff. Bezos predicted $74 million in sales by the year 2000 if things went moderately and $144 million if things went extremely well. In actuality, sales in the year

Starting point is 00:04:17 2000 amounted for $1.6 billion. After receiving the investment capital, Amazon began to frantically expand. The motto back then at the time was get big fast. On May 15th, 1997, Amazon had its IPO raising $54 million and valuing the company at $438 million. Jeff Bezos had a good sense of foresight and he predicted that the small reading community would be the bottleneck for their growth so they decided to move into new products. DVDs and music were chosen. Between 1998 and 2000, Amazon acquired IMDB, Teller Butch, and Book Pages, which gave them strategic access to customers in the UK and the German market. During this time, they also expanded their product line to include toys and electronics. By this stage, Amazon was rapidly growing and the world took notice. This was

Starting point is 00:05:13 evident by Jeff Bezos being awarded the Person of the Year by Time magazine in 1999. Surprisingly, Interestingly, Amazon didn't post any profit until the fourth quarter of 2001 where they made $5 million in profit. Bezo said that this was because he emphasized customer experience over profits. Financial disaster struck in the year 2001. The dot-com tech bubble finally burst. Several of the companies that Amazon had acquired went under, and Amazon stock price dropped from $107 to a brutal $7. Amazon went into crisis mode and shifted their focus to cutting costs. 1,300 employees were laid off and a distribution facility was shut down.

Starting point is 00:05:58 After some tough times, Amazon began to recover and in 2003 they grew their product lineup to include a software development center, Amazon Prime and a Paris Hilton jewelry line. Over the next seven years, Amazon would acquire a clothing site, a grocery store and would purchase the company Audible for $300 million, launched the Kindle of digital e-reader and also launch Amazon Web Services. This provides many companies with a whole range of on-demand computing. From the 2010s, Amazon would go from Strength to Strength, solidifying their name as one of the tech giants. Today, Amazon currently employs over 240,000 employees. This is over four times the number Google has. That being said, this does include

Starting point is 00:06:44 both part-time and full-time workers. During seasonal spikes, up to 80,000 additional seasonal workers are added to deal with the influx and sales. As of January 2016, 183 million unique visitors were recorded hitting Amazon's website per month. This is the seventh largest site in terms of traffic volume. The company has fulfillment centres or warehouses as large as 1 million square feet. It has more than 80 of these worldwide. To get a sense of scale, these warehouses could hold more water than 10,000 Olympic swimming pools. One former employee is quoted as saying he walked 11 miles per shift.

Starting point is 00:07:21 or 17.7 kilometers. In 2015, Amazon made $107 billion in revenue. For comparison, Apple made $233 billion, Microsoft, $85 billion, and alphabet, $74 billion. But when you look at actual net income, the story changes quite a bit. In 2015, Amazon took in about $600 million, which is very little compared to Apple's $53 billion, and Alphabet's $16 billion. As of the fourth quarter of 2015, the retailer had more than 304 million active customer accounts worldwide. Amazingly, there's still a lot of room to grow for Amazon. Currently, global online retail constitutes 7.2% of total retail.

Starting point is 00:08:06 This is predicted to grow to 8.8% in 2018. So with that out of the way, let's go a little bit deeper. How exactly do Amazon get their products to their customers? Here's a short excerpt from 60 Minutes explaining. Amazon Vice President Dave Clark showed us how the process began. After the products arrive into the building, they are immediately scanned. The products are then placed by stackers in what seems to outsiders as a haphazard way, a book on Buddhism and Zen resting next to Mrs. Potato Head.

Starting point is 00:08:40 It doesn't make any sense to me. Does it make sense to you? It does. What? Because those two things, if you look at how these things, items fit in the bin? They're optimized for utilizing the available space. Oh, I see. And we have computers and algorithmic work that tells people the areas of the building that have the most space to put product in that's coming in at that time. Amazon has become so efficient with its stacking, it can now store twice as many goods in its centers as it did five years ago.

Starting point is 00:09:08 Once your orders placed, they so-called Pick Ambassador walks the aisles, plucking, and scanning your items before placing them in bins. Those bins eventually wind up in front of a packer who knows exactly how big of a box to use based on the weight and amount of items. Your address is slapped onto the box and then a picture is taken of your address label. Gadgets known as shoes sort and divert the boxes to the appropriate spiral shoot based on the postal code. The boxes are then loaded onto a waiting trucks which are assigned to particular regions, Raleigh, North Carolina, in this case. this case.

Starting point is 00:09:47 Okay, so almost at the end of this video, but what are some cool things about Amazon, some fun facts? Number 8. Amazon is planning to use planes to make delivery is faster and more efficient. Amazon is taking to the skies. No, we're not talking about drones just yet. The e-commerce giant on Friday unveiled its first branded cargo plane, a Boeing 767 300 named Amazon One.

Starting point is 00:10:14 It's one of 40 planes the company plans to lease in order to speed up and control more of its own shipping networks. So how does this play into Amazon's larger business model? Why is this important for Amazon to take more and more control of its own delivery process? Yeah, well, Amazon spends an inordinate amount of money getting you tissue boxes, toilet paper, Amazon devices, all sorts of stuff like that, right to your door in faster and faster time. So the more it can actually control in that delivery network, hopefully the lower the cost will actually be for the company. What this does give us the opportunity to do is we'll be able to run flight seven days a week.

Starting point is 00:10:50 We'll be able to run a very custom point-to-point routes today that are optimized for our network versus a holistic transportation network that maybe some of our providers would operate. Number seven, Amazon Prime Air. Prime Air is a future delivery system designed to get packages safely to consumers within 30 minutes or less using drones. These vehicles will use obstacle avoidance technology to operate within a safe. range of 10 miles or more. Prime Air Development Centers are based in the US, UK, Austria and Israel.

Starting point is 00:11:25 Number 6. With a sales record of 600 million sales per second, the delivery from Amazon's warehouses needs to be streamlined. To help streamline the process, Amazon purchase Kiva, a company that makes factory automation robots at $775 million in 2012. As of last year, there were up to 30,000 bots. Not only does Amazon plan increasing the number, it also plans on automating the process of picking items from shells. To achieve this, Amazon set up the Amazon Picking Challenge, a competition where robotics researchers compete for a $25,000 prize to design the best picking robot.

Starting point is 00:12:04 Number 5. Amazon Web Services sells computer infrastructure like storage, databases, and computing power. Startups and more established companies rent these in place of high-based. powered servers. Amazon has some big-name clients. These include Pinterest, General Electric, Tinder, Reddit, Adobe Systems, Netflix, Instagram, some major banks, and even the CIA. Other than Netflix. Who else uses AWS? Oh, big enterprises, big government institutions. Like the CIA. The CIA, does that present any conflict for you, the fact that you provide the cloud that the CIA uses for

Starting point is 00:12:46 It's data. I don't think so. We're building what's called a private cloud for them, Charlie, because they don't want to be on the public cloud. To give you an idea of how much data some of these clients use, Dropbox at one point was using a petabyte per day on Amazon web servers. The web server business has generated $2.6 billion for Amazon within the first quarter of 2016.

Starting point is 00:13:07 Very lucrative. The flexible, inexpensive and easily accessible web service allows thousands of new startups to flourish and played a large role in the transformation. and innovation of industries such as finance, health, science and oil. Number four, Amazon's current logo has a hidden meaning behind it. The arrow which looks like a smile is a representation of the wide range of available items for retail, from A to Z. Number three, Amazon employees spend two days every two years working up the customer service

Starting point is 00:13:41 desk, even the CEO. This ensures that every single employee understands the customer service service. service process. Unfortunately, by at least one internal account, Amazon's relentless pursuit of customer satisfaction often happens at the expense of some employees, making it a difficult and unpleasant company to work for. Number two, Amazon is planning to build brick and mortar stores. The store is a very rich bunch of books because all of them are proven bestsellers, so you know going in that anything that you're looking at is going to be popular, it's going to be a good read. Here's a couple more little facts.

Starting point is 00:14:20 In 2014, Amazon launched Amazon Echo, a voice-activated assistant with its own hardware. In the same year, they also acquired Twitch, a massive online streaming platform. Number one. Till this day, Jeff Bezos is still the largest shareholder and currently holds 18% of shares. He is now the fifth richest person on earth, valid at the first richest person on earth, valued at almost $70 billion. With some of that money, he bought himself the Washington Post. Now, to have one individual owner media outlet

Starting point is 00:14:51 isn't really something that I agree with, but it is what it is. But anyway, back to the big picture. All of what you've just seen and heard all began from just selling books online. It sometimes really is crazy how things can turn out. If you go back in time 18 years, I was driving the packages to the post office myself.

Starting point is 00:15:10 And we were very primitive. driving the packages myself, one of my visualizations of success is that we might one day be big enough that we could afford a forklift. Sometimes being the first to do something and doing it better than your competitors can be an incredibly successful combination. So anyway, I hope you learned something from that. That's the story, size, and some cool facts about Amazon.com. Thanks for watching, guys.

Starting point is 00:15:34 Give this video a thumbs up if you liked it. Subscribe to this channel if you just stumbled across it. And if you want to see more videos about the size of companies and how big they are, how they got started and some cool interesting facts about them feel free to have a browser on this channel there's plenty of videos like that all right so I'll catch you again soon for the next video thanks again for watching cheers guys have a good one cold fusion it's new thinking

ColdFusion - How BIG is Amazon? (They Help Power the CIA and Netflix!)

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