The Man Who Built a $500bn Division Will Now Become Amazon CEOFeb 11, 2021
“No, I didn’t know what my job was going to be, or what my title was going to be. It was super important to the Amazon people that we come that Monday.” — Andy Jassy
When Andy started working at an online bookstore in 1997, no one could have predicted he would one day be running a $1.7 trillion empire.
Those first few years were far from glamorous. Amongst other things, he was Jeff Bezos’s personal technical assistant and floated around other roles. A more stereotypically ambitious person might have left to start their own company but Andy stuck around and as result will go down in tech history.
Away from all the media attention and headlines, he created a small division called Amazon Web Services (AWS) in 2006. Without getting too nerdy, it provides a service to other massive companies like Netflix to host all of their content in the cloud. It is in these relative shadows where Andy operated for over a decade as he built something spectacular.
You probably think Amazon’s online retail division where you buy batteries is massive and you wouldn’t be wrong. Yet AWS brings in over half the profits of the entire company on just 12% of the total revenue. Amazon is a cloud computing company with a side hustle of dominating global online retail.
Everyone has heard of Jeff Bezos; both his flaws and gifts. It’s almost reassuring to understand the mindset behind someone with such immense power in the world. Yet many of us know nothing about who Andy Jassy is and I think it’s time that changed.
“You can’t feel 30 per cent smarter when the stock is up 30 per cent, because then it means you have to feel 30 per cent dopier when the stock is down 30 per cent, and usually neither is true” — Andy Jassy
Many entrepreneurs are obsessed with looking cool. They rush to create sleek brands and pick names with missing vowels. They want to fix a problem most people didn’t even realize they had. They chase revenue numbers to brag about while at the same time have no idea how they will make a profit.
Andy Jassy is made of different stuff. It took 3 years from ideation at a retreat with all the top Amazon executive to the first proper product launch for AWS. He never made revenue predictions or oversold what the division would become. The user experience of AWS is a nightmare except for people well-versed in the tech world. This is a product built for people in the know and there was no attempt to dumb it down.
Though what AWS had was a clear selling point. Many businesses ran their own servers, which was often hell because of the expense and lack of flexibility. It was an unwanted burden thought necessary because it was the only safe way to store data. All Andy needed to do was prove them wrong.
Many of the early clients were startups who needed computing power but didn’t want to be slowed down by having to build all their own infrastructure. As these companies blossomed, so did AWS’s reputation.
The big transformational win came from the CIA who migrated from a legacy IBM system. If the Central Intelligence Agency could trust Andy Jassy’s AWS then so could the rest of the world. It took 10 years for the first $10bn but only a year to go from $30bn to $40bn in 2020.
According to some, you can never be successful unless you are your own boss. They paint being an employee as living torture and claim people need to open their eyes and be free. Andy Jassy’s story is proof this hyperbole is nonsense.
Andy’s AWS division was valued at an incredible $500bn by the Economist. This would make it worth more than Warren Buffett’s Berkshire Hathaway and put it in the top 10 publically traded companies in the world.
Not bad for a guy who kept the same boss for 24 years.
The truth is AWS could only have been built at Amazon. It started as a technology designed to help Amazon develop new products faster but the wider market opportunity was clear. No other company could have started building similar software and have a tech giant as a client from the start. This meant they could and they did learn faster than everyone else.
“We treat Amazon’s consumer business as an external customer.” — Andy Jassy
Andy is a company man through and through. The Financial Times notes how often he uses company slogans to make points in his interviews. You might consider him corporate and boring but you cannot deny the impact he’s had on the world. Sometimes it pays to stay at a company and be fully immersed.
Better than Bezos?
Usually, when an idolized founder-CEO announces they are stepping down, the stock price takes a hit. People struggled to imagine Microsoft without Bill Gates or Apple without Steve Jobs. Yet the opposite happened when Bezos stepped down.
This implies stock market investors are confident in Andy Jassy’s abilities though many believe Bezos will still have a hand in the company.
It’s not only the investors who think Amazon may be better under Andy. According to a survey, 90% of employees believe work-life balance will be improved under the new regime. The majority believe it is a “good decision” to make him CEO despite many taking a “wait-and-watch” approach.
If I were to ever take over from a world-famous founder, reading how happy the employees seem to be for me would mean everything. It’s a fantastic testament to his service at the company. Early AWS employee, Manny Medina calls Jassy “Not less smart [than Bezos], just way more approachable”.
To be loved by investors and employees yet unknown to the wider public is an interesting mix. It shows he is more focused on what matters than the whole world knowing how good he is. It seems Amazon is in good hands and scarily it seems Andy thinks the company has barely begun.
“One of the amazing things about AWS and Amazon is that we‘re still such a small overall share of the market segments in which we address. It’s still very early days.” — Andy Jassy