WEBVTT 1 00:00:00.234 --> 00:00:02.367 Jeff Bezos founded Amazon in 1994 2 00:00:02.367 --> 00:00:04.801 out of his garage as an online bookseller. 3 00:00:04.801 --> 00:00:07.834 Today, it is among the world's most valuable companies. 4 00:00:07.834 --> 00:00:09.868 He is one of the world's richest people, 5 00:00:09.868 --> 00:00:11.434 second only to Bill Gates. 6 00:00:11.434 --> 00:00:15.467 Amazon's ambition is to sell everything to everybody. 7 00:00:15.467 --> 00:00:18.601 Amazon's reach spans well beyond its retailing roots. 8 00:00:18.601 --> 00:00:22.634 Amazon Web Services is a leading company in the Cloud. 9 00:00:22.634 --> 00:00:25.367 In January, Amazon became the first digital streaming service 10 00:00:25.367 --> 00:00:28.000 to win a Golden Globe for best T.V. series. 11 00:00:28.000 --> 00:00:29.901 Jeff Bezos had many passions. 12 00:00:29.901 --> 00:00:32.734 He founded the aerospace company Blue Origin to lower 13 00:00:32.734 --> 00:00:36.334 the cost of space travel and increase its safety. 14 00:00:36.334 --> 00:00:39.834 In 2013, he purchased "The Washington Post." 15 00:00:39.834 --> 00:00:42.868 I met with him earlier today at the Economic Club 16 00:00:42.868 --> 00:00:43.901 here in New York. 17 00:00:43.901 --> 00:00:46.100 Here is that conversation. 18 00:00:46.100 --> 00:00:50.634 What is it that Amazon wants to be? 19 00:00:50.634 --> 00:00:54.234 Well, there are a couple of answers to that. 20 00:00:54.234 --> 00:00:57.367 Probably the biggest one, the best way, if I have to choose 21 00:00:57.367 --> 00:01:00.501 a single way to answer that question, is the thing that 22 00:01:00.501 --> 00:01:05.534 connects everything that Amazon does is the number one -- 23 00:01:05.534 --> 00:01:09.067 our number one conviction and idea and philosophy 24 00:01:09.067 --> 00:01:12.901 and principle which is customer obsession, 25 00:01:12.901 --> 00:01:16.901 as opposed to competitor obsession. 26 00:01:16.901 --> 00:01:22.033 And so we are always focused on the customer, working backwards 27 00:01:22.033 --> 00:01:25.100 from the customer's needs, developing new skills internally 28 00:01:25.100 --> 00:01:26.968 so that we can satisfy what we perceive to be 29 00:01:26.968 --> 00:01:28.734 future customer needs. 30 00:01:28.734 --> 00:01:32.267 We have a whole working backward process that starts 31 00:01:32.267 --> 00:01:34.834 with the customer needs and works backwards. 32 00:01:34.834 --> 00:01:38.167 So that is really, if you look at, seems like we are in 33 00:01:38.167 --> 00:01:39.601 a bunch of different businesses. 34 00:01:39.601 --> 00:01:43.834 So we have Amazon Web Services which is completely different 35 00:01:43.834 --> 00:01:47.634 from our, you know, Amazon Prime Business 36 00:01:47.634 --> 00:01:53.467 or Amazon Marketplace, or Amazon Studios, and so on. 37 00:01:53.467 --> 00:01:58.267 But really, the way that the businesses are run 38 00:01:58.267 --> 00:02:00.234 is very, very similar. 39 00:02:00.234 --> 00:02:03.133 And it all starts with, it's not just customer obsession, 40 00:02:03.133 --> 00:02:04.434 that is the number one one. 41 00:02:04.434 --> 00:02:08.000 But we have a very inventive culture, 42 00:02:08.000 --> 00:02:11.467 so we like to pioneer invent. 43 00:02:11.467 --> 00:02:13.534 There are other very effective business strategies. 44 00:02:13.534 --> 00:02:16.968 Pioneering is not the only effective business strategy. 45 00:02:16.968 --> 00:02:20.000 In fact, some people would argue it's not the most effective one. 46 00:02:20.000 --> 00:02:22.734 Close following can be a very good business strategy and it's 47 00:02:22.734 --> 00:02:25.400 worked many times if you look at the history of business. 48 00:02:25.400 --> 00:02:27.367 But it isn't who we are. 49 00:02:27.367 --> 00:02:29.467 Willingness to think long-term. 50 00:02:29.467 --> 00:02:32.968 I think that is another common thread that runs through 51 00:02:32.968 --> 00:02:36.434 every single thing we do. 52 00:02:36.434 --> 00:02:40.334 We are very happy to invest in new initiatives that are very 53 00:02:40.334 --> 00:02:44.601 risky, for five to seven years, which most companies 54 00:02:44.601 --> 00:02:45.534 won't do that. 55 00:02:45.534 --> 00:02:49.033 Companies will invest for very long periods of time, and they 56 00:02:49.033 --> 00:02:52.801 should in those cases where the outcomes are more certain. 57 00:02:52.801 --> 00:02:55.234 It's the combination of the risk-taking and the long-term 58 00:02:55.234 --> 00:03:00.767 outlook that make Amazon, not unique, but special 59 00:03:00.767 --> 00:03:02.601 in a smaller crowd. 60 00:03:02.601 --> 00:03:07.467 And then finally, taking real pride in operational excellence, 61 00:03:07.467 --> 00:03:11.334 so just doing things well, finding defects, 62 00:03:11.334 --> 00:03:12.601 and working backwards. 63 00:03:12.601 --> 00:03:16.300 That is all the incremental improvement that in business, 64 00:03:16.300 --> 00:03:19.033 most successful companies are very good at this one. 65 00:03:19.033 --> 00:03:22.901 If you are not good at finding defects, finding the root cause 66 00:03:22.901 --> 00:03:26.000 of the defects, fixing that root cause, you don't want to 67 00:03:26.000 --> 00:03:28.767 ever let defects flow downstream. 68 00:03:28.767 --> 00:03:32.367 That is a key part of doing a good job in any business 69 00:03:32.367 --> 00:03:33.534 in my opinion. 70 00:03:33.534 --> 00:03:35.200 You still want to sell everything to everybody. 71 00:03:35.200 --> 00:03:36.501 Yeah, for sure. 72 00:03:36.501 --> 00:03:42.267 We started, just remember, 20 years ago, we were selling 73 00:03:42.267 --> 00:03:44.000 only books. 74 00:03:44.000 --> 00:03:47.601 I was driving all the packages to the post office myself. 75 00:03:47.601 --> 00:03:50.868 I thought maybe one day we would be able to afford a forklift. 76 00:03:50.868 --> 00:03:56.601 And it is very, it's very, very different today. 77 00:03:56.601 --> 00:04:02.334 But we, over time, we added music and we added videos. 78 00:04:02.334 --> 00:04:06.267 And then I sent an email message out to the customer base, 79 00:04:06.267 --> 00:04:09.367 actually a thousand randomly selected customers, and I said, 80 00:04:09.367 --> 00:04:11.701 besides books, music and video, what would you like 81 00:04:11.701 --> 00:04:14.167 to see us sell? 82 00:04:14.167 --> 00:04:16.934 And the list came back incredibly long. 83 00:04:16.934 --> 00:04:18.901 It was basically just whatever the person had 84 00:04:18.901 --> 00:04:19.767 on their mind right now. 85 00:04:19.767 --> 00:04:22.901 One of customers said, I wish you sold windshield wipers 86 00:04:22.901 --> 00:04:25.667 because I need windshield wipers for my car. 87 00:04:25.667 --> 00:04:27.701 A light kind of went on in my head. 88 00:04:27.701 --> 00:04:32.200 You know, people -- people will want to use this new fangled 89 00:04:32.200 --> 00:04:36.634 e-commerce way of shopping for everything. 90 00:04:36.634 --> 00:04:39.534 Because people are very convenience-motivated. 91 00:04:39.534 --> 00:04:44.033 And if we can do it, so that really started the kind of the 92 00:04:44.033 --> 00:04:47.501 expansion into all categories, consumer electronics, 93 00:04:47.501 --> 00:04:49.367 and then apparel, and so on. 94 00:04:49.367 --> 00:04:51.133 Take one example, apparel, you now have 95 00:04:51.133 --> 00:04:55.501 I think outpaced Macy's as the largest apparel seller 96 00:04:55.501 --> 00:04:56.767 in the world. 97 00:04:56.767 --> 00:04:58.901 Yeah, I don't know -- I've seen those headlines. 98 00:04:58.901 --> 00:05:01.801 I actually have not tried to track that. 99 00:05:01.801 --> 00:05:04.534 Back to not being competitor obsessed. 100 00:05:04.534 --> 00:05:09.200 But you know, we are selling a lot of apparel. 101 00:05:09.200 --> 00:05:12.901 And that team is doing a fantastic job. 102 00:05:12.901 --> 00:05:18.467 I do think, you know, if we're not the largest, we're among 103 00:05:18.467 --> 00:05:21.100 the largest apparel sellers in the world. 104 00:05:21.100 --> 00:05:24.501 And there is lots of room. 105 00:05:24.501 --> 00:05:27.000 You know, we keep improving. 106 00:05:27.000 --> 00:05:29.601 I think if you were to talk to our apparel team, they would 107 00:05:29.601 --> 00:05:32.834 tell you that they don't think we're very good at it yet. 108 00:05:32.834 --> 00:05:36.200 And still the business is going very well. 109 00:05:36.200 --> 00:05:40.400 So I am never disappointed when we're not good at something 110 00:05:40.400 --> 00:05:42.400 because I think, well think how good it's going to work 111 00:05:42.400 --> 00:05:44.033 when we are good at it. 112 00:05:44.033 --> 00:05:46.033 And the apparel is like that. 113 00:05:46.033 --> 00:05:47.234 There is so much opportunity. 114 00:05:47.234 --> 00:05:51.067 Nobody really knows how to do a great job of offering -- 115 00:05:51.067 --> 00:05:52.767 apparel online yet. 116 00:05:52.767 --> 00:05:56.367 And we have tons of invention and ideas and working our way 117 00:05:56.367 --> 00:05:58.601 through that experimental list. 118 00:05:58.601 --> 00:06:00.801 You have said that there's three pillars -- 119 00:06:00.801 --> 00:06:04.667 the Marketplace, Amazon Prime, and Amazon Web Services. 120 00:06:04.667 --> 00:06:05.234 That's right. 121 00:06:05.234 --> 00:06:06.901 Let's go in reverse order. 122 00:06:06.901 --> 00:06:10.767 Amazon Web Services now is the largest contributor to revenue 123 00:06:10.767 --> 00:06:12.334 it is said. 124 00:06:12.334 --> 00:06:14.200 Well, not to revenue. 125 00:06:14.200 --> 00:06:20.968 It's a big contributor to profit. 126 00:06:20.968 --> 00:06:24.534 Our retail business, by the way, in our established 127 00:06:24.534 --> 00:06:27.667 countries, is also very profitable. 128 00:06:27.667 --> 00:06:30.701 We keep investing so we are investing in video, 129 00:06:30.701 --> 00:06:33.467 original content with Amazon Studios and so on. 130 00:06:33.467 --> 00:06:38.200 But Amazon Web Services is a -- is remarkable I think 131 00:06:38.200 --> 00:06:40.133 for a couple of reasons. 132 00:06:40.133 --> 00:06:42.801 It follows all these principles that I laid out 133 00:06:42.801 --> 00:06:44.000 at the beginning. 134 00:06:44.000 --> 00:06:46.601 But one of the most unusual things that happened with Amazon 135 00:06:46.601 --> 00:06:51.501 Web Services is the amount of runway that we got, which is 136 00:06:51.501 --> 00:06:55.734 a gift, before we faced like-minded competition, 137 00:06:55.734 --> 00:07:00.534 we had -- it appears to me just empirically that if you invent 138 00:07:00.534 --> 00:07:05.167 a new way of doing something, typically if you are lucky, 139 00:07:05.167 --> 00:07:09.334 you get about two years of runway before competitors 140 00:07:09.334 --> 00:07:11.968 copy your idea. 141 00:07:11.968 --> 00:07:13.601 And two years is actually a pretty long time 142 00:07:13.601 --> 00:07:17.767 in a fast-moving industry so that's a big head start. 143 00:07:17.767 --> 00:07:20.601 For whatever reason, and I have a hypothesis 144 00:07:20.601 --> 00:07:21.601 of what the reason is. 145 00:07:21.601 --> 00:07:25.400 But for whatever reason, Amazon Web Services got seven years 146 00:07:25.400 --> 00:07:29.234 of runway before we faced like-minded competition. 147 00:07:29.234 --> 00:07:32.167 There were other people doing similar kinds of things but not 148 00:07:32.167 --> 00:07:35.501 the same way and not with the same approach and same mindset. 149 00:07:35.501 --> 00:07:40.434 And in my experience, that's unheard of 150 00:07:40.434 --> 00:07:41.901 to get so much runway. 151 00:07:41.901 --> 00:07:45.300 And I think the reason that that happened is because 152 00:07:45.300 --> 00:07:50.434 the incumbents in technology for enterprises, sort of 153 00:07:50.434 --> 00:07:53.167 infrastructure technology for enterprises, thought that what 154 00:07:53.167 --> 00:07:58.067 we were doing was just so damn weird that it could never work. 155 00:07:58.067 --> 00:08:02.167 And so we just kept very quiet about it. 156 00:08:02.167 --> 00:08:06.400 And we knew it was working, you know, and we would read news 157 00:08:06.400 --> 00:08:10.133 stories that would say things like, do you really think 158 00:08:10.133 --> 00:08:14.901 anybody is going to buy a mission critical enterprise 159 00:08:14.901 --> 00:08:17.901 infrastructure from an online bookseller? 160 00:08:17.901 --> 00:08:21.767 And we would look at that, you know, and certain people were 161 00:08:21.767 --> 00:08:24.200 praying on that and we would read those articles and we 162 00:08:24.200 --> 00:08:27.601 would look at our business statement and we would be like, 163 00:08:27.601 --> 00:08:29.200 well, they are. 164 00:08:29.200 --> 00:08:32.634 (LAUGHTER) 165 00:08:32.634 --> 00:08:33.400 So we kind of knew. 166 00:08:33.400 --> 00:08:38.667 But it was, so we got very lucky. 167 00:08:38.667 --> 00:08:39.701 That was a gift. 168 00:08:39.701 --> 00:08:45.601 And what that allowed us to do was build a gigantic advantage 169 00:08:45.601 --> 00:08:48.667 in terms of the feature set and the service offerings and 170 00:08:48.667 --> 00:08:51.968 the cost structure and everything else, that you just 171 00:08:51.968 --> 00:08:53.968 can't wave a magic wand and do that quickly. 172 00:08:53.968 --> 00:08:56.000 It takes years and years. 173 00:08:56.000 --> 00:08:57.501 But the central point seemed to me -- 174 00:08:57.501 --> 00:09:00.033 And now we're not stopping, so that team is, 175 00:09:00.033 --> 00:09:05.100 you know, every year, 500, 600, 700, 800 new features and 176 00:09:05.100 --> 00:09:06.968 services, so they keep pushing on that. 177 00:09:06.968 --> 00:09:09.601 That team is just doing an amazing job. 178 00:09:09.601 --> 00:09:10.868 What's interesting to me is that 179 00:09:10.868 --> 00:09:13.801 you were doing it for yourself, these are things you were doing 180 00:09:13.801 --> 00:09:16.367 for yourself and you said, if we are you doing it for ourselves. 181 00:09:16.367 --> 00:09:17.400 This is true. 182 00:09:17.400 --> 00:09:24.167 So the founding idea behind Amazon Web Services is that our 183 00:09:24.167 --> 00:09:28.534 applications engineers and our networking and data center 184 00:09:28.534 --> 00:09:33.267 engineers were spending way too much time coordinating. 185 00:09:33.267 --> 00:09:36.133 And so the applications engineers are the ones who build 186 00:09:36.133 --> 00:09:38.334 the things that customers actually interact with, 187 00:09:38.334 --> 00:09:41.534 they drive the business forward, they drive revenues. 188 00:09:41.534 --> 00:09:45.000 Building data centers and building, you know, putting 189 00:09:45.000 --> 00:09:48.334 servers in the data centers and building fleets of servers and 190 00:09:48.334 --> 00:09:51.667 getting the right levels of capacity and making sure all the 191 00:09:51.667 --> 00:09:54.534 operating systems versions were correct and so on and so on. 192 00:09:54.534 --> 00:09:57.801 Databases on top of that, make sure the versions of those 193 00:09:57.801 --> 00:10:00.434 are correct, all the networking that goes with it. 194 00:10:00.434 --> 00:10:03.067 This stuff is unbelievably complicated and hard, 195 00:10:03.067 --> 00:10:06.534 every bit as hard as building the application layer. 196 00:10:06.534 --> 00:10:12.234 But it doesn't really add any value to the application layer. 197 00:10:12.234 --> 00:10:14.367 It's -- it's a kind of price of admission. 198 00:10:14.367 --> 00:10:16.601 It's one of those things that has to be done perfectly 199 00:10:16.601 --> 00:10:19.634 but it's not secret sauce. 200 00:10:19.634 --> 00:10:22.667 It's not going to change the way you run your business. 201 00:10:22.667 --> 00:10:28.300 And the -- and what we wanted to do was reduce those 202 00:10:28.300 --> 00:10:30.934 fine-grained conversations that the application engineers 203 00:10:30.934 --> 00:10:33.400 were having with the networking engineers. 204 00:10:33.400 --> 00:10:36.834 And so we said we should just create a set of APIs, 205 00:10:36.834 --> 00:10:40.267 application programming interfaces, harden those. 206 00:10:40.267 --> 00:10:44.968 And then the teams can discuss the road map next year, 207 00:10:44.968 --> 00:10:47.067 two years from now, three years from now. 208 00:10:47.067 --> 00:10:50.334 They can discuss in a course-grained way the road map 209 00:10:50.334 --> 00:10:55.067 of what APIs we should expose and then it will simplify those 210 00:10:55.067 --> 00:10:57.767 conversations and give a lot of stability and they won't need 211 00:10:57.767 --> 00:10:59.801 to do all these silly fine-grained 212 00:10:59.801 --> 00:11:01.801 coordination conversations. 213 00:11:01.801 --> 00:11:05.667 And so we started designing that. 214 00:11:05.667 --> 00:11:07.801 And the second we started writing it down, we realized 215 00:11:07.801 --> 00:11:10.033 wait a second, what we're building here, we need. 216 00:11:10.033 --> 00:11:13.934 Amazon.com, the retailer needs these things. 217 00:11:13.934 --> 00:11:17.701 But pretty soon everybody is going to need these things. 218 00:11:17.701 --> 00:11:20.901 And so with a little extra work, we can turn what we were going 219 00:11:20.901 --> 00:11:24.601 to build just for ourselves into a service for the world. 220 00:11:24.601 --> 00:11:25.501 And that's what we did. 221 00:11:25.501 --> 00:11:32.300 And it is now, you know, a very successful, large -- 222 00:11:32.300 --> 00:11:34.100 The largest factor in the Cloud. 223 00:11:34.100 --> 00:11:35.167 By far. 224 00:11:35.167 --> 00:11:36.501 And CIA and a lot of other clients 225 00:11:36.501 --> 00:11:37.067 come to you. 226 00:11:37.067 --> 00:11:38.167 Yes. 227 00:11:38.167 --> 00:11:43.300 So you also have a large shipping contingent 228 00:11:43.300 --> 00:11:44.767 within your own operation. 229 00:11:44.767 --> 00:11:45.934 Yes, we do. 230 00:11:45.934 --> 00:11:46.501 And there are some -- 231 00:11:46.501 --> 00:11:49.200 We do billions of packages a year and it takes 232 00:11:49.200 --> 00:11:51.300 a lot of logistics. 233 00:11:51.300 --> 00:11:52.133 So you are getting into 234 00:11:52.133 --> 00:11:53.300 the shipping business. 235 00:11:53.300 --> 00:11:55.901 We have an A plus team. 236 00:11:55.901 --> 00:11:57.400 So is it the same model? 237 00:11:57.400 --> 00:11:59.901 Are you doing something and you are doing it well, and we say, 238 00:11:59.901 --> 00:12:02.000 we could do this for other people, so we're going to get 239 00:12:02.000 --> 00:12:03.434 into the shipping business? 240 00:12:03.434 --> 00:12:04.133 Not quite. 241 00:12:04.133 --> 00:12:06.234 It's a little bit different. 242 00:12:06.234 --> 00:12:10.634 Here we're really being driven by capacity needs, especially if 243 00:12:10.634 --> 00:12:13.834 you look at the holiday selling season. 244 00:12:13.834 --> 00:12:17.601 The fact of the matter is that we need all of the capacity that 245 00:12:17.601 --> 00:12:21.467 we can get from the established transportation providers like 246 00:12:21.467 --> 00:12:24.000 U.S. Postal Service and UPS. 247 00:12:24.000 --> 00:12:26.033 We will take all the capacity that they can give us. 248 00:12:26.033 --> 00:12:27.534 And I am just talking about the U.S. 249 00:12:27.534 --> 00:12:30.033 The same story is playing right around the world, 250 00:12:30.033 --> 00:12:34.400 the Royal Mail and Deutsche Post and so on. 251 00:12:34.400 --> 00:12:37.968 And then in addition to that, we need more capacity, 252 00:12:37.968 --> 00:12:39.501 especially at peak. 253 00:12:39.501 --> 00:12:41.467 Just in order to continue to grow our business. 254 00:12:41.467 --> 00:12:46.133 So we have kind of been forced into developing expertise 255 00:12:46.133 --> 00:12:47.801 in the last mile. 256 00:12:47.801 --> 00:12:50.267 And of course we do use it for our third-party business so 257 00:12:50.267 --> 00:12:55.334 third-party sellers can now use the Marketplace business. 258 00:12:55.334 --> 00:12:58.601 We offer a service called "Fulfilled by Amazon" where 259 00:12:58.601 --> 00:13:01.467 third-party sellers can put their inventory 260 00:13:01.467 --> 00:13:03.200 in our fulfillment centers. 261 00:13:03.200 --> 00:13:05.601 And then we handle all of the fulfillment and returns and 262 00:13:05.601 --> 00:13:08.067 customer service and everything else for them. 263 00:13:08.067 --> 00:13:13.067 And so we are, you know, that logistics chain is going to work 264 00:13:13.067 --> 00:13:16.801 for us, and for third-party sellers. 265 00:13:16.801 --> 00:13:20.901 And it's really crucial that we continue to build that out. 266 00:13:20.901 --> 00:13:23.367 So FedEx and UPS need not worry. 267 00:13:23.367 --> 00:13:24.400 No, no. 268 00:13:24.400 --> 00:13:28.400 If you look at those guys are going to be able to continue to 269 00:13:28.400 --> 00:13:32.901 grow and we're going to continue to grow with them, and just, 270 00:13:32.901 --> 00:13:35.834 and still need additional capacity. 271 00:13:35.834 --> 00:13:37.634 The other thing is Amazon Prime, the second 272 00:13:37.634 --> 00:13:43.234 pillar, Amazon Prime, some what, 65 million members 273 00:13:43.234 --> 00:13:44.767 of Amazon Prime? 274 00:13:44.767 --> 00:13:46.067 We don't reveal that. 275 00:13:46.067 --> 00:13:47.000 So I don't want to nod. 276 00:13:47.000 --> 00:13:49.934 (LAUGHTER) 277 00:13:49.934 --> 00:13:52.067 Amazon is reasonably secretive. 278 00:13:52.067 --> 00:13:58.968 Well, we don't want to reveal things that 279 00:13:58.968 --> 00:14:01.100 will help competitors or alert them. 280 00:14:01.100 --> 00:14:04.334 And it's also just really hard to figure out which things 281 00:14:04.334 --> 00:14:05.534 would help them. 282 00:14:05.534 --> 00:14:09.334 You know, like we certainly got a bigger window, I was talking 283 00:14:09.334 --> 00:14:12.968 about our AWS business and how we got such a long runway. 284 00:14:12.968 --> 00:14:15.934 If we had been out there bragging about that business, 285 00:14:15.934 --> 00:14:20.934 we would have attracted attention from incumbents, 286 00:14:20.934 --> 00:14:23.968 much sooner than what actually happened. 287 00:14:23.968 --> 00:14:28.601 And so there is no reason in business usually to boast about 288 00:14:28.601 --> 00:14:30.300 your accomplishments. 289 00:14:30.300 --> 00:14:31.834 People will figure them out. 290 00:14:31.834 --> 00:14:36.167 Boasting about the number of Prime members won't make anybody 291 00:14:36.167 --> 00:14:39.701 more likely to join Prime, in my opinion. 292 00:14:39.701 --> 00:14:42.968 People already know that a lot of people are Prime members. 293 00:14:42.968 --> 00:14:44.534 Their friends are already Prime members. 294 00:14:44.534 --> 00:14:48.300 So it's true that -- that in consumer businesses and 295 00:14:48.300 --> 00:14:51.868 in enterprise businesses that people, to some degree, like to 296 00:14:51.868 --> 00:14:54.667 be with the leader and like to be in the crowd. 297 00:14:54.667 --> 00:14:59.400 And so you do want people to know that you are a leader. 298 00:14:59.400 --> 00:15:02.934 You do want people to know that the offerings are successful 299 00:15:02.934 --> 00:15:04.634 and that lots of people are using them. 300 00:15:04.634 --> 00:15:06.667 But you don't have to quantity that for consumers 301 00:15:06.667 --> 00:15:07.701 or enterprises. 302 00:15:07.701 --> 00:15:09.300 Let's assume it is a large number. 303 00:15:09.300 --> 00:15:10.100 It's a large number. 304 00:15:10.100 --> 00:15:13.501 (LAUGHTER) 305 00:15:13.501 --> 00:15:17.701 Why is it so crucial for your future Prime? 306 00:15:17.701 --> 00:15:24.133 Well, Prime is, what we want Prime to be and 307 00:15:24.133 --> 00:15:26.667 what we have developed it into over time is, 308 00:15:26.667 --> 00:15:28.667 it's the best of Amazon. 309 00:15:28.667 --> 00:15:33.300 So you can get, basically if you join Prime, we want to have 310 00:15:33.300 --> 00:15:40.133 our core service be outstanding, and anybody who wants to use 311 00:15:40.133 --> 00:15:44.167 Amazon and not be a Prime member should have a great experience. 312 00:15:44.167 --> 00:15:49.367 And people who are not Prime members, for example, 313 00:15:49.367 --> 00:15:50.801 can still get free shipping. 314 00:15:50.801 --> 00:15:53.767 They have to buy a certain number of products or certain 315 00:15:53.767 --> 00:15:58.601 thing to get above a certain product kind of order 316 00:15:58.601 --> 00:16:01.200 basket hurdle, I think it's $49. 317 00:16:01.200 --> 00:16:03.467 And if they get above that $49 hurdle, 318 00:16:03.467 --> 00:16:06.334 then they can get free shipping. 319 00:16:06.334 --> 00:16:11.033 And so what we did with Prime is say look, you know, you can 320 00:16:11.033 --> 00:16:13.167 get free shipping without joining Prime, but if you want 321 00:16:13.167 --> 00:16:16.601 fast free shipping, our best service, 322 00:16:16.601 --> 00:16:18.067 then you need to join Prime. 323 00:16:18.067 --> 00:16:19.200 It's $99 a year. 324 00:16:19.200 --> 00:16:20.467 It's $99 a year. 325 00:16:20.467 --> 00:16:23.601 And then we started adding other benefits to it that we know 326 00:16:23.601 --> 00:16:24.634 that people like. 327 00:16:24.634 --> 00:16:28.267 So we started out -- we added Prime Video which has been 328 00:16:28.267 --> 00:16:30.667 a very successful new benefit for Prime. 329 00:16:30.667 --> 00:16:32.234 We started many years ago. 330 00:16:32.234 --> 00:16:35.400 We added just 10 or 20,000 shows. 331 00:16:35.400 --> 00:16:38.100 And they were all licensed and they were all reruns. 332 00:16:38.100 --> 00:16:39.868 Things like Gilligan's island. 333 00:16:39.868 --> 00:16:43.200 And it was kind of a by the way offering. 334 00:16:43.200 --> 00:16:45.334 So, you know, we said, look, you already are a Prime member, 335 00:16:45.334 --> 00:16:47.601 here is a new benefit. 336 00:16:47.601 --> 00:16:50.701 We know it's not the most important T.V. shows 337 00:16:50.701 --> 00:16:54.701 in the world, but it also isn't costing you anything extra. 338 00:16:54.701 --> 00:16:56.634 So it grew. 339 00:16:56.634 --> 00:17:00.834 Now we're doing, you know, Emmy award-winning and Golden Globe 340 00:17:00.834 --> 00:17:04.834 award-winning original content that again, you get access to 341 00:17:04.834 --> 00:17:09.200 just at no additional charge, just being a Prime member. 342 00:17:09.200 --> 00:17:10.801 So getting into the creative part of the 343 00:17:10.801 --> 00:17:13.767 entertainment business, what was the motivation for that? 344 00:17:13.767 --> 00:17:15.367 Well, from a business point of view, 345 00:17:15.367 --> 00:17:17.100 there are two different ways to think about that. 346 00:17:17.100 --> 00:17:19.601 We always start with the customer-centric point of view. 347 00:17:19.601 --> 00:17:23.467 And then so how can we, if we're going to make original content 348 00:17:23.467 --> 00:17:27.200 which Amazon Studios is doing, how can it be better or 349 00:17:27.200 --> 00:17:31.834 different from the -- so much content that is out there that 350 00:17:31.834 --> 00:17:34.934 you could license already and not have to make yourself. 351 00:17:34.934 --> 00:17:38.334 And the fact of the matter is that the over the top streaming 352 00:17:38.334 --> 00:17:43.767 services with a subscription model can have -- can in fact 353 00:17:43.767 --> 00:17:45.934 make different kinds of content, so a show like 354 00:17:45.934 --> 00:17:51.801 "Transparent" which has won Golden Globes and Emmys is not 355 00:17:51.801 --> 00:17:55.534 ever -- it is not a show that could be successfully done 356 00:17:55.534 --> 00:17:59.367 on broadcast T.V. because broadcast T.V. needs 357 00:17:59.367 --> 00:18:01.934 a much bigger audience for that. 358 00:18:01.934 --> 00:18:05.501 "Transparent" -- we want to make shows that are 359 00:18:05.501 --> 00:18:07.868 somebody's favorite show. 360 00:18:07.868 --> 00:18:13.133 And on broadcast T.V., you can be very happy if you have 361 00:18:13.133 --> 00:18:16.667 a big show that is, you know, 20 million people's 362 00:18:16.667 --> 00:18:18.133 third favorite show. 363 00:18:18.133 --> 00:18:21.400 And so you can actually think about the creative process 364 00:18:21.400 --> 00:18:22.367 a little differently. 365 00:18:22.367 --> 00:18:24.100 You can attract different storytellers. 366 00:18:24.100 --> 00:18:27.334 You can go for stories that are narrower but incredibly 367 00:18:27.334 --> 00:18:29.667 powerful and well told. 368 00:18:29.667 --> 00:18:31.367 "Mozart in the Jungle" is the same way. 369 00:18:31.367 --> 00:18:33.634 I don't see how "Mozart in the Jungle" another one that has 370 00:18:33.634 --> 00:18:38.033 won Golden Globes and Emmys, I don't see how it could be 371 00:18:38.033 --> 00:18:40.434 successful on broadcast T.V. either. 372 00:18:40.434 --> 00:18:45.200 So you get -- we can attract a storyteller who wants to tell 373 00:18:45.200 --> 00:18:46.501 a certain kind of story. 374 00:18:46.501 --> 00:18:49.000 Then there are other things that are just tailwinds in this 375 00:18:49.000 --> 00:18:52.868 business, that are happening because of HBO and Netflix 376 00:18:52.868 --> 00:18:55.801 and others that, you know, ten years ago, 377 00:18:55.801 --> 00:18:59.501 you couldn't get A List Talent to do T.V. 378 00:18:59.501 --> 00:19:02.100 They perceived it as stigmatizing. 379 00:19:02.100 --> 00:19:04.934 And today that is just completely not. 380 00:19:04.934 --> 00:19:09.601 Today, A List Talent wants to do serialized T.V. 381 00:19:09.601 --> 00:19:12.901 Because the quality of the storytelling is so high, 382 00:19:12.901 --> 00:19:14.634 that it's just completely flipped on its head. 383 00:19:14.634 --> 00:19:16.267 Does it benefit your traditional 384 00:19:16.267 --> 00:19:18.033 e-commerce businesses? 385 00:19:18.033 --> 00:19:19.968 The fact that you have a presence in entertainment 386 00:19:19.968 --> 00:19:21.667 and the fact that you went -- 387 00:19:21.667 --> 00:19:22.834 Totally. 388 00:19:22.834 --> 00:19:25.133 You sell things because you win awards 389 00:19:25.133 --> 00:19:25.968 in Hollywood. 390 00:19:25.968 --> 00:19:29.701 There is the customer experience part of -- 391 00:19:29.701 --> 00:19:33.234 you know, we want storytellers with guts and taste to do things 392 00:19:33.234 --> 00:19:35.367 that are somebody's favorite show. 393 00:19:35.367 --> 00:19:38.834 And then let's talk about the business side of that. 394 00:19:38.834 --> 00:19:41.234 Why these shows are expensive? 395 00:19:41.234 --> 00:19:46.100 Man in the High Castle, which is our most watched and one of our 396 00:19:46.100 --> 00:19:48.434 highest rated shows, and you should watch it if you haven't 397 00:19:48.434 --> 00:19:52.734 seen it, Hitler won World War II, it's an alternative history, 398 00:19:52.734 --> 00:19:57.834 and it's 1962, and the Nazis control the east coast 399 00:19:57.834 --> 00:19:59.601 and the Japanese control the west coast. 400 00:19:59.601 --> 00:20:02.734 It's creepy. 401 00:20:02.734 --> 00:20:07.234 And but that show is super expensive to make. 402 00:20:07.234 --> 00:20:09.767 And so how do you pay for that content? 403 00:20:09.767 --> 00:20:10.767 That's the business side of this. 404 00:20:10.767 --> 00:20:11.634 Right. 405 00:20:11.634 --> 00:20:15.968 The business side is very unique to Amazon. 406 00:20:15.968 --> 00:20:20.400 I don't think there's another model out there like it. 407 00:20:20.400 --> 00:20:22.667 And that is when you become a Prime member, 408 00:20:22.667 --> 00:20:25.334 you buy more from us. 409 00:20:25.334 --> 00:20:29.267 You say to yourself, well, what else -- now that I have paid 410 00:20:29.267 --> 00:20:32.167 my $99 a year, how else can I use this membership? 411 00:20:32.167 --> 00:20:36.200 And so when people join Prime, they buy more shoes, they buy 412 00:20:36.200 --> 00:20:40.200 more diapers, they buy more dishwashing detergent, they buy 413 00:20:40.200 --> 00:20:43.267 more books and electronics and toys and so on and so on. 414 00:20:43.267 --> 00:20:47.467 And so we really want people to join Prime. 415 00:20:47.467 --> 00:20:53.267 And we really want people to renew their Prime membership. 416 00:20:53.267 --> 00:21:00.667 And so when we make, when we win a Golden Globe, for us, what we 417 00:21:00.667 --> 00:21:04.434 are tying that to, and we can see -- we can see this in the 418 00:21:04.434 --> 00:21:10.300 metrics, that people who use Prime Video are more likely to 419 00:21:10.300 --> 00:21:13.767 convert from free trial lists to paid Prime members and are 420 00:21:13.767 --> 00:21:17.267 more likely to convert from paid Prime members, their next 421 00:21:17.267 --> 00:21:21.000 time, not convert but to renew for a subsequent year. 422 00:21:21.000 --> 00:21:25.067 And so that's what closes the loop on the business side. 423 00:21:25.067 --> 00:21:28.367 You don't do things for business reasons. 424 00:21:28.367 --> 00:21:30.934 You need to do things for the customer experience reasons. 425 00:21:30.934 --> 00:21:33.868 But you need to know how you are going to pay 426 00:21:33.868 --> 00:21:35.100 for that customer experience. 427 00:21:35.100 --> 00:21:37.601 You need to close the loop on the business side too. 428 00:21:37.601 --> 00:21:40.601 So I have listed three pillars. 429 00:21:40.601 --> 00:21:42.934 What might be the fourth pillar? 430 00:21:42.934 --> 00:21:44.968 Well, it could be, we don't know yet 431 00:21:44.968 --> 00:21:45.968 is the real answer. 432 00:21:45.968 --> 00:21:47.968 And I think it's very hard to -- 433 00:21:47.968 --> 00:21:49.400 we do a lot of different things. 434 00:21:49.400 --> 00:21:52.534 And these things, the fourth one will rise 435 00:21:52.534 --> 00:21:54.434 and distinguish itself. 436 00:21:54.434 --> 00:21:56.234 We'll put energy into many things. 437 00:21:56.234 --> 00:22:01.267 I'm optimistic about things like Amazon Studios, so the original 438 00:22:01.267 --> 00:22:03.400 content, I think that actually could become a fourth pillar 439 00:22:03.400 --> 00:22:04.501 on its own. 440 00:22:04.501 --> 00:22:08.400 And I think that what we are doing with natural language 441 00:22:08.400 --> 00:22:11.400 understanding and Echo and Alexa 442 00:22:11.400 --> 00:22:12.601 could become a fourth pillar. 443 00:22:12.601 --> 00:22:14.234 Everybody talks about artificial intelligence, 444 00:22:14.234 --> 00:22:16.267 everybody, and everybody is investing. 445 00:22:16.267 --> 00:22:18.167 And by the way, rightly so, 446 00:22:18.167 --> 00:22:21.968 this is the real thing. 447 00:22:21.968 --> 00:22:25.000 Enlarge on that and also on the idea of what 448 00:22:25.000 --> 00:22:28.634 Echo is and how it may very well be the beginning 449 00:22:28.634 --> 00:22:33.000 on the edge, the wedge into artificial intelligence, 450 00:22:33.000 --> 00:22:34.200 that benefits everybody. 451 00:22:34.200 --> 00:22:38.501 Well, Echo is a small black cylinder that is -- 452 00:22:38.501 --> 00:22:43.000 it has seven microphones on the top and has a speaker inside and 453 00:22:43.000 --> 00:22:47.000 a digital signal processor and some other computer inside. 454 00:22:47.000 --> 00:22:51.367 It's WiFi-connected to the Cloud. 455 00:22:51.367 --> 00:22:56.300 And Alexa, the agent -- the artificially intelligent agent 456 00:22:56.300 --> 00:23:00.167 that lives in the Cloud will talk to you through Alexa -- 457 00:23:00.167 --> 00:23:01.000 through Echo. 458 00:23:01.000 --> 00:23:03.467 And one of the interesting things about Echo, the device, 459 00:23:03.467 --> 00:23:06.267 is it uses those seven microphones to do something 460 00:23:06.267 --> 00:23:07.634 called beam forming. 461 00:23:07.634 --> 00:23:11.868 And so basically it can hear you very well even in a very 462 00:23:11.868 --> 00:23:13.467 loud kitchen environment. 463 00:23:13.467 --> 00:23:15.601 For example, you have the dishwasher running and you have 464 00:23:15.601 --> 00:23:18.701 the sink running water and maybe somebody is playing 465 00:23:18.701 --> 00:23:20.834 the television set in the living room. 466 00:23:20.834 --> 00:23:24.133 And Alexa can still hear you because of that digital 467 00:23:24.133 --> 00:23:25.133 signal processing. 468 00:23:25.133 --> 00:23:28.834 And so you can say, Alexa, what time is it? 469 00:23:28.834 --> 00:23:30.267 Alexa, what is the weather today? 470 00:23:30.267 --> 00:23:35.701 Alexa, and in natural language, Alexa, play a certain song, 471 00:23:35.701 --> 00:23:37.701 et cetera, et cetera. 472 00:23:37.701 --> 00:23:42.634 And people really -- it's just been a big hit. 473 00:23:42.634 --> 00:23:44.400 We launched it a few years ago. 474 00:23:44.400 --> 00:23:48.968 It has vastly exceeded our expectations in terms of volume. 475 00:23:48.968 --> 00:23:52.367 We have literally thousands of people dedicated 476 00:23:52.367 --> 00:23:53.400 to working on it. 477 00:23:53.400 --> 00:23:55.133 And Google wants to be in that business 478 00:23:55.133 --> 00:23:56.601 and everybody else wants to be in that business. 479 00:23:56.601 --> 00:23:58.601 Everybody will want to be in that business. 480 00:23:58.601 --> 00:24:02.033 And so here you know we got the kind of standard, you know, 481 00:24:02.033 --> 00:24:05.701 two, two and a half year head start. 482 00:24:05.701 --> 00:24:06.834 Let me talk about "The Washington Post." 483 00:24:06.834 --> 00:24:08.033 Yeah. 484 00:24:08.033 --> 00:24:09.000 You bought "The Washington Post" 485 00:24:09.000 --> 00:24:10.601 without doing any due diligence. 486 00:24:10.601 --> 00:24:12.601 You were so impressed with -- 487 00:24:12.601 --> 00:24:14.467 Well, I did no due diligence because 488 00:24:14.467 --> 00:24:18.601 I knew Don Graham for 15 years. 489 00:24:18.601 --> 00:24:20.601 Did he come to you because he needed a -- 490 00:24:20.601 --> 00:24:23.601 If any of you know Don Graham, he is possibly 491 00:24:23.601 --> 00:24:25.534 the most honorable person in the world. 492 00:24:25.534 --> 00:24:28.434 So he just laid out all the warts for me. 493 00:24:28.434 --> 00:24:31.601 He laid out all of the great things about "The Post" for me. 494 00:24:31.601 --> 00:24:35.234 And no amount of due diligence could ever have gotten 495 00:24:35.234 --> 00:24:38.934 to more clarity than just talking to Don 496 00:24:38.934 --> 00:24:39.968 for several hours. 497 00:24:39.968 --> 00:24:41.534 Why did you buy it? 498 00:24:41.534 --> 00:24:43.267 I bought it because it's important. 499 00:24:43.267 --> 00:24:45.901 So I would never buy a financially upside down 500 00:24:45.901 --> 00:24:47.868 salty snack food company. 501 00:24:47.868 --> 00:24:51.601 You know, that doesn't make any sense to me. 502 00:24:51.601 --> 00:24:53.434 But "The Washington Post" is important. 503 00:24:53.434 --> 00:24:56.801 And so it makes sense to me to take something like that, 504 00:24:56.801 --> 00:24:59.234 and I also am optimistic. 505 00:24:59.234 --> 00:25:03.467 And I thought there were some ways to make it -- I want it 506 00:25:03.467 --> 00:25:05.701 to be a self-sustaining, profitable enterprise. 507 00:25:05.701 --> 00:25:08.300 I think that would be healthy for "The Post." 508 00:25:08.300 --> 00:25:09.601 And I think it can be done. 509 00:25:09.601 --> 00:25:13.367 And our approach is actually very, very simple. 510 00:25:13.367 --> 00:25:16.968 We need to go -- it's hard to execute on and it will take time 511 00:25:16.968 --> 00:25:17.934 but the approach is simple. 512 00:25:17.934 --> 00:25:23.100 We need to go from making a relatively large amount of money 513 00:25:23.100 --> 00:25:26.634 per reader on a relatively small number of readers. 514 00:25:26.634 --> 00:25:30.601 That is the historic model of "The Post", to a model where 515 00:25:30.601 --> 00:25:33.834 we make a relatively small amount of money per reader 516 00:25:33.834 --> 00:25:36.067 on a very large number of readers. 517 00:25:36.067 --> 00:25:37.133 That is the new model. 518 00:25:37.133 --> 00:25:39.434 But that's your business model too, isn't it? 519 00:25:39.434 --> 00:25:41.100 That is the better business model 520 00:25:41.100 --> 00:25:42.701 for the internet era. 521 00:25:42.701 --> 00:25:46.868 And the Post is unusual and this is one of the things from 522 00:25:46.868 --> 00:25:49.701 a business point of view why I'm so optimistic about "The Post," 523 00:25:49.701 --> 00:25:54.767 is that it can go from being -- it has historically 524 00:25:54.767 --> 00:25:56.234 been a local paper. 525 00:25:56.234 --> 00:25:57.801 A very good local paper. 526 00:25:57.801 --> 00:26:01.501 But it happens to be a local paper situated in the capital 527 00:26:01.501 --> 00:26:03.834 city of the United States of America. 528 00:26:03.834 --> 00:26:08.701 And so it has -- it's kind of geographic location is superb 529 00:26:08.701 --> 00:26:11.667 for converting it from being a local paper to a national 530 00:26:11.667 --> 00:26:14.467 and even a global publication. 531 00:26:14.467 --> 00:26:16.834 And so that, and that's a gift that the internet brings. 532 00:26:16.834 --> 00:26:19.968 To do national and global publication in the days of 533 00:26:19.968 --> 00:26:22.534 print, super expensive. 534 00:26:22.534 --> 00:26:24.501 You have to figure out how to have printing presses everywhere 535 00:26:24.501 --> 00:26:27.534 and distribution everywhere, physical distribution, 536 00:26:27.534 --> 00:26:28.601 very challenging. 537 00:26:28.601 --> 00:26:30.767 Today, that piece is easy. 538 00:26:30.767 --> 00:26:33.934 To get global distribution in digital form 539 00:26:33.934 --> 00:26:35.000 is extraordinarily simple. 540 00:26:35.000 --> 00:26:37.367 Because it is an important newspaper in 541 00:26:37.367 --> 00:26:39.834 the nation's capital and most powerful country in the world, 542 00:26:39.834 --> 00:26:42.167 did you want it also because it would give you 543 00:26:42.167 --> 00:26:43.701 political influence? 544 00:26:43.701 --> 00:26:44.901 No. 545 00:26:44.901 --> 00:26:50.434 And I think one of the reasons that Don Graham liked me 546 00:26:50.434 --> 00:26:52.968 as an owner is because he didn't think 547 00:26:52.968 --> 00:26:54.033 I would politicize it. 548 00:26:54.033 --> 00:26:54.901 Yeah. 549 00:26:54.901 --> 00:26:57.767 And so, you know, I think because it is in the 550 00:26:57.767 --> 00:27:02.067 capital city of the United States of America, it should not 551 00:27:02.067 --> 00:27:10.033 be, you know, you take the British model of newspapers and, 552 00:27:10.033 --> 00:27:15.701 you know, the kind of left wing paper or right wing paper. 553 00:27:15.701 --> 00:27:19.133 And there are certain people who if they had bought 554 00:27:19.133 --> 00:27:20.734 "The Washington Post" would have converted it 555 00:27:20.734 --> 00:27:22.834 in one of those directions. 556 00:27:22.834 --> 00:27:25.467 And I don't think that would be healthy for "The Post" 557 00:27:25.467 --> 00:27:29.133 or healthy for the country and plus in that respect, 558 00:27:29.133 --> 00:27:32.234 I'm also a good owner because I'm so damn busy. 559 00:27:32.234 --> 00:27:33.634 Honestly. 560 00:27:33.634 --> 00:27:34.734 You're not hanging out in the newsroom. 561 00:27:34.734 --> 00:27:37.367 I have no desire to meddle. 562 00:27:37.367 --> 00:27:40.100 I have no desire to opine on everything. 563 00:27:40.100 --> 00:27:42.934 I can't -- I don't have the time to be in newsroom every day 564 00:27:42.934 --> 00:27:47.267 or even for the editorial pages. 565 00:27:47.267 --> 00:27:53.601 And, by the way, it's a very difficult business that needs 566 00:27:53.601 --> 00:27:55.067 to be done by professionals. 567 00:27:55.067 --> 00:28:00.667 I sometimes get asked, you know, do you opine in 568 00:28:00.667 --> 00:28:03.467 the newsroom or get involved in newsroom activities. 569 00:28:03.467 --> 00:28:06.868 I'm like, if you know -- if you know as I do now a little bit 570 00:28:06.868 --> 00:28:10.667 about newsrooms, you will see, it would be exactly the 571 00:28:10.667 --> 00:28:15.367 equivalent of me walking into a surgical theater while my son 572 00:28:15.367 --> 00:28:18.667 was having brain surgery and meddling with the brain surgeon. 573 00:28:18.667 --> 00:28:19.267 It doesn't make sense. 574 00:28:19.267 --> 00:28:22.067 These are super complex -- being the executive editor of 575 00:28:22.067 --> 00:28:24.033 "The Post", we have Marty Baron who, in my opinion, 576 00:28:24.033 --> 00:28:29.067 is the best executive editor in the world. 577 00:28:29.067 --> 00:28:31.868 He and his team, they are doing an unbelievably good job. 578 00:28:31.868 --> 00:28:34.300 And again, back to, you know, I have been talking about 579 00:28:34.300 --> 00:28:37.000 the business model of "The Post" we had to transition into this 580 00:28:37.000 --> 00:28:40.100 new way of having a small amount of money with lot of -- 581 00:28:40.100 --> 00:28:41.901 per reader, with lots of readers. 582 00:28:41.901 --> 00:28:44.868 The real reason this could work is because "The Post" 583 00:28:44.868 --> 00:28:48.801 is creating riveting coverage, and they're doing it. 584 00:28:48.801 --> 00:28:54.667 They are -- you can't, you know, turn around a restaurant 585 00:28:54.667 --> 00:28:57.868 with business techniques if the food isn't delicious. 586 00:28:57.868 --> 00:29:02.501 And we have delicious content, you know, "The Post" is just 587 00:29:02.501 --> 00:29:04.934 riveting, they are killing it. 588 00:29:04.934 --> 00:29:07.200 I am so proud of that team. 589 00:29:07.200 --> 00:29:10.634 People in my profession are great admirers of 590 00:29:10.634 --> 00:29:12.267 what "The Washington Post" is today 591 00:29:12.267 --> 00:29:13.701 under Marty Baron's leadership. 592 00:29:13.701 --> 00:29:14.267 Totally. 593 00:29:14.267 --> 00:29:15.701 Especially in foreign coverage. 594 00:29:15.701 --> 00:29:16.267 Yes. 595 00:29:16.267 --> 00:29:17.968 And by the way, Marty would be the first one to tell you this, 596 00:29:17.968 --> 00:29:21.734 it is his team, I mean, he put those people in place and he has 597 00:29:21.734 --> 00:29:27.834 given them lots of kind of energy and they're proud of 598 00:29:27.834 --> 00:29:29.834 the product they're creating. 599 00:29:29.834 --> 00:29:34.534 "The Post" also has a culture that -- I also have no desire 600 00:29:34.534 --> 00:29:36.000 to change the culture of "The Post", 601 00:29:36.000 --> 00:29:37.434 that would be so counterproductive. 602 00:29:37.434 --> 00:29:40.200 They already have a great culture and it comes all the way 603 00:29:40.200 --> 00:29:41.734 -- you know it is decades old. 604 00:29:41.734 --> 00:29:43.801 And what you want to do with something like "The Post" that 605 00:29:43.801 --> 00:29:47.000 has a very healthy decades-old culture is instead of trying to 606 00:29:47.000 --> 00:29:51.234 change it, you want to kind of uncover it and reveal it 607 00:29:51.234 --> 00:29:52.467 and burnish it. 608 00:29:52.467 --> 00:29:56.300 And the more I've gotten to know about "The Post", I realize 609 00:29:56.300 --> 00:29:58.601 the distinguishing feature of "The Post" compared to 610 00:29:58.601 --> 00:30:01.467 some other very high quality newspapers is 611 00:30:01.467 --> 00:30:03.334 "The Post" has more swagger. 612 00:30:03.334 --> 00:30:06.868 They are, they are swashbuckling, but they are 613 00:30:06.868 --> 00:30:10.234 professional swashbucklers which is very important because 614 00:30:10.234 --> 00:30:14.167 non-professional swashbuckling just gets you killed. 615 00:30:14.167 --> 00:30:18.901 You know, you can't do that, and they are just incredible. 616 00:30:18.901 --> 00:30:19.834 Blue Origin. 617 00:30:19.834 --> 00:30:24.000 You and I sat last night with a former astronaut. 618 00:30:24.000 --> 00:30:26.000 That was very fun, Scott Kelly. 619 00:30:26.000 --> 00:30:28.634 Scott Kelly who was there at the International 620 00:30:28.634 --> 00:30:32.934 Space Station for, I don't know how many days. 621 00:30:32.934 --> 00:30:35.534 What is it that you hope to accomplish? 622 00:30:35.534 --> 00:30:36.067 In space. 623 00:30:36.067 --> 00:30:37.167 In space. 624 00:30:37.167 --> 00:30:40.834 Well, this is, first of all, let's back up. 625 00:30:40.834 --> 00:30:42.033 This is a childhood dream. 626 00:30:42.033 --> 00:30:47.901 I fell in love with the idea of space and space exploration 627 00:30:47.901 --> 00:30:50.067 and space travel when I was five years old. 628 00:30:50.067 --> 00:30:52.634 I watched Neil Armstrong step onto the moon. 629 00:30:52.634 --> 00:30:55.834 You don't choose your passions, your passions choose you. 630 00:30:55.834 --> 00:31:01.300 I -- so I am infected with this idea. 631 00:31:01.300 --> 00:31:04.100 I couldn't ever stop thinking about space. 632 00:31:04.100 --> 00:31:07.100 I have been thinking about it ever since then. 633 00:31:07.100 --> 00:31:11.834 And I just -- so again, you know, I did not, when I started 634 00:31:11.834 --> 00:31:17.868 Blue Origin, which is the name of this space company, I did not 635 00:31:17.868 --> 00:31:20.868 make a list of all the businesses in the world where I 636 00:31:20.868 --> 00:31:24.400 thought I might get the highest return on invested capital. 637 00:31:24.400 --> 00:31:29.801 And it was driven by passion and curiosity and the need to 638 00:31:29.801 --> 00:31:32.400 explore the things that I care about. 639 00:31:32.400 --> 00:31:37.067 And so we have, over time, built a brilliant team, there are now 640 00:31:37.067 --> 00:31:41.868 over 800 people at Blue Origin, we have a suborbital tourism 641 00:31:41.868 --> 00:31:46.734 vehicle called "New Shepherd" that flies like a regular rocket 642 00:31:46.734 --> 00:31:48.901 when it launches and then lands on its tail like 643 00:31:48.901 --> 00:31:50.634 a Buck Rogers rocket. 644 00:31:50.634 --> 00:31:52.534 We have used the same vehicle, it is reusable. 645 00:31:52.534 --> 00:31:56.234 We used the same vehicle five times -- 646 00:31:56.234 --> 00:31:57.167 And that's key to the business 647 00:31:57.167 --> 00:31:58.100 of going into space. 648 00:31:58.100 --> 00:31:59.901 That's the absolute key. 649 00:31:59.901 --> 00:32:03.601 If you look -- if you ask the question, why is space travel 650 00:32:03.601 --> 00:32:05.067 so expensive? 651 00:32:05.067 --> 00:32:08.667 There is one reason, and it's because we throw the hardware 652 00:32:08.667 --> 00:32:10.634 away every time after using it. 653 00:32:10.634 --> 00:32:11.934 It is all expendable. 654 00:32:11.934 --> 00:32:15.033 And even in the past when we have done things that were sort 655 00:32:15.033 --> 00:32:18.334 of semi-reusable, they weren't really what I would call 656 00:32:18.334 --> 00:32:21.767 operable reusability because they were disassembled, 657 00:32:21.767 --> 00:32:24.133 inspected and then put back together. 658 00:32:24.133 --> 00:32:27.834 So you can imagine how expensive air travel would be if, after 659 00:32:27.834 --> 00:32:32.133 your Hawaii vacation, you get to Hawaii and -- well, if they 660 00:32:32.133 --> 00:32:36.000 throw the 747 away, it is going to be really expensive but it is 661 00:32:36.000 --> 00:32:38.834 also going to be super expensive if, after you get to Hawaii, 662 00:32:38.834 --> 00:32:42.634 they disassemble the whole thing, inspect every part and 663 00:32:42.634 --> 00:32:44.901 put it all back together before you're allowed to fly again. 664 00:32:44.901 --> 00:32:47.234 That was the problem with the space shuttle. 665 00:32:47.234 --> 00:32:52.400 And so, it is really important that you design the vehicle 666 00:32:52.400 --> 00:32:55.701 from the beginning for highly operable reusability. 667 00:32:55.701 --> 00:32:58.367 The propellants are incredibly low cost. 668 00:32:58.367 --> 00:33:02.501 People don't know this about rockets, but a big rocket, 669 00:33:02.501 --> 00:33:05.534 let's say, has a million pounds of propellant on board, 670 00:33:05.534 --> 00:33:07.734 two-thirds of that may be liquid oxygen, 671 00:33:07.734 --> 00:33:12.167 say 600,000 pounds or so of liquid oxygen. 672 00:33:12.167 --> 00:33:13.868 Do you know how much liquid oxygen costs? 673 00:33:13.868 --> 00:33:15.667 Ten cents a pound. 674 00:33:15.667 --> 00:33:18.901 So, that is $60,000 worth of liquid oxygen, and then 675 00:33:18.901 --> 00:33:20.334 add the fuel costs in. 676 00:33:20.334 --> 00:33:23.467 You are still talking about a few hundred thousand dollars 677 00:33:23.467 --> 00:33:25.501 in propellant costs. 678 00:33:25.501 --> 00:33:29.300 And the launch, you know, costs on the order of $60 million, 679 00:33:29.300 --> 00:33:32.601 $70 million, $80 million, $100 million, $150 million. 680 00:33:32.601 --> 00:33:36.734 So how do you get from a $100 million -- $100 million to 681 00:33:36.734 --> 00:33:40.334 $300,000 of propellants -- it's simple, you are throwing 682 00:33:40.334 --> 00:33:41.868 the hardware away. 683 00:33:41.868 --> 00:33:45.801 And so it's really not -- the engineering challenge involved 684 00:33:45.801 --> 00:33:49.501 in building a highly operable reusable vehicle is gigantic. 685 00:33:49.501 --> 00:33:52.334 But if you can do that, it is a game changer. 686 00:33:52.334 --> 00:33:53.400 You change everything. 687 00:33:53.400 --> 00:33:56.100 And now why -- to your original question. 688 00:33:56.100 --> 00:33:58.834 That is sort of the background. 689 00:33:58.834 --> 00:34:02.467 I believe it's incredibly important that we humans go out 690 00:34:02.467 --> 00:34:06.968 into space and the primary reason, if you think long-term 691 00:34:06.968 --> 00:34:10.334 about this, is we need to do that to preserve the earth. 692 00:34:10.334 --> 00:34:13.467 So I am not -- I'm not one of the Plan B guys. 693 00:34:13.467 --> 00:34:16.701 There is a conventional -- there is a kind of conventional 694 00:34:16.701 --> 00:34:21.534 wisdom that is quite common that one of the reasons we need to 695 00:34:21.534 --> 00:34:25.868 go into space and settle another planet is as a kind of backup 696 00:34:25.868 --> 00:34:28.834 for humanity, you know, if earth gets destroyed, 697 00:34:28.834 --> 00:34:32.267 at least we have this other place. 698 00:34:32.267 --> 00:34:38.133 And I don't like that -- that's not motivating for me. 699 00:34:38.133 --> 00:34:44.601 But what -- because I'll tell you what we know for sure. 700 00:34:44.601 --> 00:34:48.601 We have now sent robotic probes to every planet 701 00:34:48.601 --> 00:34:50.133 in this solar system. 702 00:34:50.133 --> 00:34:53.300 We have taken close looks at them all, and believe me, 703 00:34:53.300 --> 00:34:55.033 this is the best planet. 704 00:34:55.033 --> 00:34:58.033 (LAUGHTER) 705 00:34:58.033 --> 00:35:01.901 It is not even close. 706 00:35:01.901 --> 00:35:05.767 So, what you need to do, and if you look at -- if you want a 707 00:35:05.767 --> 00:35:09.167 thriving, growing civilization, you want population growth to 708 00:35:09.167 --> 00:35:12.634 continue, you want a whole bunch of things to continue. 709 00:35:12.634 --> 00:35:16.400 And I believe that in the next few hundred years, what will 710 00:35:16.400 --> 00:35:19.767 happen is we will move all heavy industry into space 711 00:35:19.767 --> 00:35:22.667 for a whole bunch of practical reasons, easier access to 712 00:35:22.667 --> 00:35:26.534 resources of all kinds, material resources as well as energy. 713 00:35:26.534 --> 00:35:29.434 If you think about solar energy on Earth, it is inherently 714 00:35:29.434 --> 00:35:33.000 problematic because it only is available half the time. 715 00:35:33.000 --> 00:35:36.067 In space, solar energy is available 24/7. 716 00:35:36.067 --> 00:35:40.534 But the list of practical reasons why that -- 717 00:35:40.534 --> 00:35:41.300 But you also have to build an 718 00:35:41.300 --> 00:35:42.634 infrastructure up there. 719 00:35:42.634 --> 00:35:45.100 Yeah, and that's why you need really low cost. 720 00:35:45.100 --> 00:35:48.734 You need to shrink the cost of lifting mass into space 721 00:35:48.734 --> 00:35:51.467 from Earth by two orders of magnitude. 722 00:35:51.467 --> 00:35:55.300 You need to reduce that cost by a hundred times and then 723 00:35:55.300 --> 00:35:56.400 you can do these things. 724 00:35:56.400 --> 00:36:01.067 And then Blue Origin is not going to do this 725 00:36:01.067 --> 00:36:02.100 all by ourselves. 726 00:36:02.100 --> 00:36:05.501 What I want to do with Blue Origin is build heavy-lifting 727 00:36:05.501 --> 00:36:09.601 infrastructure that lowers the cost of access to space 728 00:36:09.601 --> 00:36:13.234 so that the next generation of entrepreneurs can have 729 00:36:13.234 --> 00:36:15.934 a dynamic entrepreneurial explosion in space. 730 00:36:15.934 --> 00:36:19.167 That is how we will move all heavy industry into space 731 00:36:19.167 --> 00:36:22.601 and then ultimately Earth can be effectively zoned, 732 00:36:22.601 --> 00:36:25.868 residential and light industrial. 733 00:36:25.868 --> 00:36:28.634 Finally, and unlike the internet there was 734 00:36:28.634 --> 00:36:31.234 infrastructure there, so when you jumped into the internet 735 00:36:31.234 --> 00:36:32.634 there was always infrastructure there. 736 00:36:32.634 --> 00:36:34.934 This is the key point, when entrepreneurs -- 737 00:36:34.934 --> 00:36:39.133 so Amazon was a tiny, little company that started with four 738 00:36:39.133 --> 00:36:43.367 people, and that -- we could only do, we built Amazon because 739 00:36:43.367 --> 00:36:45.901 we didn't have to do any of the heavy lifting. 740 00:36:45.901 --> 00:36:48.400 The transportation and logistics infrastructure of U.S. Postal 741 00:36:48.400 --> 00:36:51.000 Service which would have been hundreds of billions in CapEx, 742 00:36:51.000 --> 00:36:52.601 already existed. 743 00:36:52.601 --> 00:36:55.234 We didn't have to build the internet, it was run on, 744 00:36:55.234 --> 00:36:58.067 on long distance cables that were actually put in the ground 745 00:36:58.067 --> 00:37:00.534 for long-distance phone calls. 746 00:37:00.534 --> 00:37:01.968 And we didn't have to build a payment system, 747 00:37:01.968 --> 00:37:04.701 the credit card system already existed. 748 00:37:04.701 --> 00:37:06.801 So all these things would have been tens of billions 749 00:37:06.801 --> 00:37:09.100 or hundreds of billions in CapEx and we got to 750 00:37:09.100 --> 00:37:10.634 rest on top of them. 751 00:37:10.634 --> 00:37:13.934 That's why you don't see entrepreneurial dynamism 752 00:37:13.934 --> 00:37:16.267 in space like you do on the internet. 753 00:37:16.267 --> 00:37:19.901 On the internet, two kids in a dorm room can take, change 754 00:37:19.901 --> 00:37:23.400 an industry completely, and you can't do that in space. 755 00:37:23.400 --> 00:37:25.434 The price of admission is too high. 756 00:37:25.434 --> 00:37:29.167 Because the -- just getting to space is so expensive. 757 00:37:29.167 --> 00:37:32.267 And so if we can change, if I'm 80 years old, looking back on 758 00:37:32.267 --> 00:37:36.234 my life and the one thing I have done is make it so that there is 759 00:37:36.234 --> 00:37:38.934 this gigantic entrepreneurial explosion in space for the next 760 00:37:38.934 --> 00:37:41.067 generation, I will be a happy, happy man. 761 00:37:41.067 --> 00:37:43.234 OK, one other thing I want to say before we go 762 00:37:43.234 --> 00:37:45.601 and the last question, you and Bill Gates got together 763 00:37:45.601 --> 00:37:48.367 and started something called Grail, a company fighting cancer. 764 00:37:48.367 --> 00:37:49.400 Yes. 765 00:37:49.400 --> 00:37:51.067 And the idea is? 766 00:37:51.067 --> 00:37:53.667 The science of that is unbelievable. 767 00:37:53.667 --> 00:37:58.100 And basically, you can sequence -- tumors shed little bits of 768 00:37:58.100 --> 00:38:00.934 DNA into your bloodstream. 769 00:38:00.934 --> 00:38:03.868 And you can use sequencing technology to amplify those 770 00:38:03.868 --> 00:38:09.167 things and then detect cancers at very, very early stages. 771 00:38:09.167 --> 00:38:12.467 And for a lot of cancers early detection is a big deal. 772 00:38:12.467 --> 00:38:17.634 So this is -- the science of this is very promising, 773 00:38:17.634 --> 00:38:20.601 very real, and it might not work. 774 00:38:20.601 --> 00:38:21.601 The market -- 775 00:38:21.601 --> 00:38:22.467 But it might. 776 00:38:22.467 --> 00:38:23.434 And I'm optimistic. 777 00:38:23.434 --> 00:38:24.234 The market cap -- 778 00:38:24.234 --> 00:38:27.033 If it does work, it's a big, big deal. 779 00:38:27.033 --> 00:38:29.501 The market cap of Amazon has made you 780 00:38:29.501 --> 00:38:31.901 the second wealthiest person in the world. 781 00:38:31.901 --> 00:38:33.901 Second to Bill Gates. 782 00:38:33.901 --> 00:38:36.467 Can you imagine at some point in your life 783 00:38:36.467 --> 00:38:39.267 pursuing the kind of philanthropy? 784 00:38:39.267 --> 00:38:40.100 Well, yeah. 785 00:38:40.100 --> 00:38:42.901 If there is anything left after I finish building Blue Origin. 786 00:38:42.901 --> 00:38:48.601 (LAUGHTER AND APPLAUSE) 787 00:38:48.601 --> 00:38:49.667 We'll see. 788 00:38:49.667 --> 00:38:53.934 it's -- again, I did not choose Blue Origin based on -- you 789 00:38:53.934 --> 00:38:59.133 know, basically what I am doing right now is taking my Amazon 790 00:38:59.133 --> 00:39:01.901 winnings and investing them. 791 00:39:01.901 --> 00:39:04.601 Every time you see me sell stock on Amazon, 792 00:39:04.601 --> 00:39:07.801 it's send more money to the Blue Origin team. 793 00:39:07.801 --> 00:39:08.601 (LAUGHTER) 794 00:39:08.601 --> 00:39:10.033 I asked Jeff last night at the Natural Museum 795 00:39:10.033 --> 00:39:13.300 of History, what was the return on investment for Blue Origin, 796 00:39:13.300 --> 00:39:16.934 and he said to me as he slapped me, that is a rude question. 797 00:39:16.934 --> 00:39:17.934 That is a very rude question. 798 00:39:17.934 --> 00:39:18.934 (LAUGHTER) 799 00:39:18.934 --> 00:39:20.667 And, by the way, I do believe that Blue Origin 800 00:39:20.667 --> 00:39:23.501 can be a sustainable, profitable enterprise one day. 801 00:39:23.501 --> 00:39:27.234 But that is an investment horizon that would make 802 00:39:27.234 --> 00:39:30.067 most reasonable investors sick to their stomach. 803 00:39:30.067 --> 00:39:32.701 By 2018, somebody will be up on a vessel. 804 00:39:32.701 --> 00:39:33.234 Yeah. 805 00:39:33.234 --> 00:39:35.300 We are on track on our suborbital vehicle 806 00:39:35.300 --> 00:39:39.167 "New Shepherd" to fly paying passengers, hopefully in 2018. 807 00:39:39.167 --> 00:39:41.367 I keep telling the team, it's not a race. 808 00:39:41.367 --> 00:39:43.300 We'll do it when it's safe. 809 00:39:43.300 --> 00:39:45.868 But we're on track right now for 2018. 810 00:39:45.868 --> 00:39:47.634 On behalf of everybody in this room, and 811 00:39:47.634 --> 00:39:49.868 the Economic Club of New York, thank you, Jeff Bezos. 812 00:39:49.868 --> 00:39:50.801 Thank you, Charlie. 813 00:39:50.801 --> 00:39:53.767 (APPLAUSE)