It may be difficult for us to imagine, but most of the business magnates we know today had beginnings that were, if not humble, at least eccentric. The cliché that great fortunes in the United States start in a garage is true in the case of Jeff Bezos.
Although we see this man as a visionary with the most successful company in the world, 30 years ago he had to persuade his parents to invest everything they had in his business venture. A few decades ago, selling books through something called the “Internet” was a very bizarre idea.
The idea was so risky that most investors refused to listen to him. Jeff Bezos met with up to 60 people (mostly friends and family), but the largest contribution of high-risk capital came from his parents. It may be blind faith that we are biologically programmed to do anything for our children, but the truth is that thanks to Jeff Bezos’ parents, Miguel “Mike” Bezos and Jacklyn “Jackie” Gise, it was possible to create the company that today sends us any product in less than 24 hours.
A Leap of Faith (and the Internet)
In the early 1990s, Jeff Bezos was barely 30 years old and working as a senior vice president at a hedge fund in New York. The 2,300% annual growth in Internet use gave him a brilliant idea: to quit his job and leave the Big Apple.
He needed seed capital for his project: no less than $1 million in total. However, the idea of an online bookstore was too futuristic for most people. He only managed to find 22 investors, including his siblings, who contributed $10,000 each. The crucial investors ended up being his parents, Mike and Jackie.
Miguel Bezos, a Cuban immigrant who had arrived in the US at the age of 16, had experienced social impoverishment under the Castro regime firsthand (perhaps this is why he agreed to invest in his son’s business). It was probably also the determination and confidence he saw in Jeff’s eyes. He didn’t quite understand the business he was proposing, so he had to ask, “What is the Internet?”
Jeff Bezos didn’t mince words either; he admitted to his parents that there was a 70% chance that the startup would not work. Forewarned is forearmed, and he wanted to make sure he could “return to his parents’ house for Thanksgiving if things didn’t work out in the end.”
A quarter million dollars for a startup called “Amazon”
Mike and Jackie ended up investing $245,573 in 1995. It wasn’t pocket change—the couple wasn’t rich—but rather almost all of their life savings. They bought each share at 17 cents.
And it paid off: the initial investment skyrocketed to a return that is now estimated at 12,000,000%. The $245,000 from 1995 is now estimated to be worth more than $40 billion in recent estimates. This capital investment by family members is now considered the most important in human economic history.
This wealth became so absurdly large that Mike Bezos had to put its management in the hands of professionals. The estate is now managed by a family office called Aurora Borealis.
Another key part in the creation of Amazon
Apart from the essential investment made by Jeff’s parents in the company, a little-known (but equally important) figure was his first wife, MacKenzie Bezos—now MacKenzie Scott. She was the other person who believed in Jeff’s idea from the beginning. She was not only Bezos’ wife, but also an operational co-founder. They both quit their jobs and decided to drive from New York to Seattle. During that road trip, they drafted the business plan that would become the seed of Amazon.
As one of Amazon’s first employees, she handled the accounting, paperwork, and negotiated the first freight contract to ship the books. Their marriage ended, but her fundamental role in the early structure of Amazon should be remembered. Behind a great man is not only a great woman, but a great family that supports its own.