Some Misconceptions About Amazon

Some misconceptions about Amazon Contrary to popular belief, Amazon did not remain unprofitable for ten years after founding. Established in 1994, it first became profitable in the fourth quarter of 2001—better than many startups today that cannot become profitable within seven years. It subsequently experienced losses, but that followed the September 11 attacks, when almost all internet companies died. Amazon inevitably lost money for several quarters. Its first full-year profit was in 2003, still less than ten years after founding. It also took under three years to list, a remarkable entrepreneurial achievement. Its IPO raised only US$48 million, far below most companies’ IPO proceeds today and even many Series B rounds. Earlier VC investment was smaller still. I provide these numbers so that people establish basic facts before considering a question. Often, clear facts reveal the answer. Develop another habit: do not bring forward questions based merely on ‘it is said.’ Amazon did not always enjoy Wall Street’s favor. After America emerged from the early-century internet bubble, its market value stayed around 1% of today’s level, far below rival eBay. Wall Street truly embraced it only after the 2009 financial crisis, when transformation into a technology company led investors to value it as technology rather than retail. By then it had already been profitable for years. To extend the point: many people attribute another person’s success to an influential benefactor, or a company’s success to investor help. Instead, examine your own actions. Do not use inaccurate or invented explanations to excuse yourself.