When Jeff Bezos was a child, he dreamed of being the next Thomas Edison. Today, he's the multibillionaire founder and CEO of Amazon.com (NASDAQ:AMZN), with personal ambitions geared toward outer space, financing a clock that measures time for 10,000 years, and, perhaps equally ambitious, supplanting Wal-Mart (NYSE:WMT) at the top of the retail food chain.
How did he go from being an admittedly accomplished child to one of our generation's greatest (and richest) entrepreneurs? And, more specifically, are there lessons we can draw from his experience to increase our own chance at success in the future?
I believe the answer to the latter question is yes. As I highlight in the following list of factors underlying Bezos' stratospheric ascent, as recounted by Brad Stone in The Everything Store: Jeff Bezos and the Age of Amazon, while luck and genetics certainly positioned the Amazon founder for success, other traits such as confidence, work ethic, and a fierce independence are both critical to explaining his rise and largely replicable by others.
To a certain extent, every great entrepreneur is a product of luck -- that is, of their specific time and place of birth.
"Shortly before or very shortly after 1840 were born nearly all the galaxy of uncommon men who were to be the overlords of the future society," Matthew Josephson wrote nearly 80 years ago in The Robber Barons, a book about the scions of the Gilded Age. By coming into their own on the heels of the Civil War, these men were uniquely positioned to capture the wealth from the postwar industrial revolution.
The same can be said of Bill Gates, the founder and longtime CEO of Microsoft, who was born on the eve of the computing revolution and attended a private middle school that had only recently started a computer club. "It was an amazing thing, of course, because this was 1968," Malcolm Gladwell wrote in Outliers: The Story of Success. "Most colleges didn't have computer clubs in the 1960s."
Even Warren Buffett's current station in life can be attributed in part to happenstance. Born in 1930, he was too young to be burdened with memories of the Crash of 1929 or the Great Depression, yet old enough to ride the epic wave of prosperity that followed World War II and ignited one of the greatest bull markets in history.
Bezos is no exception here. Beyond his considerable intellect and skill set, it simply can't be denied that he was of the age (late 20s) and ability to exploit the Internet revolution of the mid-1990s.
That Bezos has been lucky, however, doesn't detract from his own talents and abilities. "A lot of what we ascribe to luck is not luck at all," Starbucks (NASDAQ:SBUX) CEO Howard Schultz wrote in Pour Your Heart Into It. "It's seizing the day and accepting responsibility for your future."
To Schultz's point, of the roughly 4 million babies to be born in 1964, there was only one Jeff Bezos. Only one person thought of Amazon. Only one person threw caution to the wind, abandoned a lucrative Wall Street career, and drove cross-country to make his dream a reality. And only one person had the emotional fortitude to stare down the likes of Wal-Mart and Barnes & Noble in order to see the vision through to completion.
What made Bezos "the one"? Perhaps more than anything, it's his uniquely keen and "hyper-rational" intellect. He was a standout pupil in elementary school, the valedictorian of his high-school class, and a summa cum laude graduate of Princeton University. He sprinted through the ranks at D.E. Shaw, one of the earliest and still most sophisticated quantitative hedge funds on Wall Street.
Three decades ago, when a teacher of his was asked to estimate 12-year-old Bezos' grade level, she responded: "I really can't say, except that there is probably no limit to what he can do, given a little guidance."
3. Work ethic
Layered on top of this intellect has been a fierce work ethic that's propelled by Bezos' intense ability to focus and strong underlying discipline.
At one point, Bezos announced to his high-school class that he intended to be the valedictorian, Stone recounts. After that, it became a race to be No. 2. "Jeff decided he wanted it and he worked harder than anybody else," recalled a friend of Bezos' from the time.
At D.E. Shaw, he kept a sleeping bag in his office and a makeshift mattress pad on his windowsill for nights that he chose to sleep at the office. At Amazon, one of his guiding principles is that "you can work long, you can work hard, you can work smart, but at Amazon you can't choose two out of the three."
"He was excruciatingly focused," said the same friend. "Not like mad-scientist focused, but he was capable of really focusing, in a crazy way, on certain things."
4. Energy and a bias toward action
Make no mistake about it: It takes a lot of energy to start and run a company like Amazon -- and, by all accounts, Jeff Bezos had an abundance of it.
"I walked into the door and this guy with a boisterous laugh who was just exuding energy comes bounding down the steps," recalled an early investor in Amazon who had also backed companies like Netscape and Intuit. "In that moment, I wanted to be in business with Jeff."
On top of this, Bezos is famous for harboring the same "bias toward action" that Wal-Mart founder Sam Walton made famous in his autobiography, Sam Walton: Made in America. As Bezos encapsulated in one of Amazon's leadership principles:
Speed matters in business. Many decisions and actions are reversible and do not need extensive study. We value calculated risk taking.
5. Competitive drive
This, too, is a trait that Bezos shared with Walton. In Walton's autobiography -- which is essential reading for so-called "Amazonians" -- various derivations of the word "competition" show up no fewer than 100 times.
In Bezos' case, it was apparent from an early age. Stone gives multiple examples of this from Bezos' childhood, including an obsession with reading and science competitions. Stone also describes the adult Bezos' competitive streak as "fierce" and refers to his "uncommon need to best his adversaries."
6. Confidence and self-esteem
There's no getting around the fact that confidence and a high self-esteem are indispensable elements of success.
Perhaps no one proved this better than Sam Walton. "It never occurred to me that I might lose; to me, it was almost as if I had a right to win," the Wal-Mart founder said in explaining how he prevailed over deeper-pocketed competitors. "Thinking like that often seems to turn into a sort of self-fulfilling prophecy."
As I see it, there are two reasons for this, both of which have taken center stage in Bezos' life at various times. First, confidence gives a person the courage of their conviction and thereby frees him or her to take risk.
While Bezos' pre-Amazon career isn't as widely known as his life since then, the reality is that he was already on top of the world. By 1993, he was in charge of D.E. Shaw's Chicago-based options trading group and oversaw its entry into a new business that allowed retail investors to trade equities without the usual commissions assessed by the New York Stock Exchange.
His parents' first reaction upon hearing that he would be abandoning this coveted perch? "What do you mean, you are going to sell books over the Internet?"
And the second reason is that confidence gives one the strength to persevere in the face of adversity, which Bezos has most certainly experienced at numerous junctures along the way.
There's an interesting paradox that courses through the lives of most highly successful entrepreneurs like Bezos.
On the one hand, as I mentioned earlier, they're tirelessly innovative and bring a disruptive approach to their trade. But on the other hand, very few are true first-movers. Sam Walton didn't invent discount retailing; he just did it better than anyone else.
Additionally, many of an entrepreneur's greatest accomplishments come from assimilating the ideas of others into their own framework. In Schultz's case, for instance, he was neither the founder of Starbucks nor the inventor of the coffee shop -- he discovered the former on a trip to Seattle and the latter on a junket to Italy.
The same is true of Bezos. When he first developed the idea behind Amazon, there were already people in the market doing the exact same thing. And while his company is often credited with inventing the e-reader, in reality it was merely the most successful in a series of handheld reading devices, many of which pre-dated it by years.
The lesson here is that it's not critical to be the first person to the proverbial party. What's important is to be resourceful. Read. Immerse yourself in the topic. And don't feel the need to always reinvent the wheel.
8. Innovative and disruptive mindset
To be wildly successful in any new business venture, it's almost axiomatic that you must be willing to disrupt the status quo.
This doesn't require you to invent something from scratch. Phil Knight, the founder of Nike, wasn't the first person to think of shoes. Starbucks' Schultz didn't invent coffee. Walton didn't come up with the idea of discount retailing.
What all of these people did do, however, is look at their respective industries slightly differently. Nike made better shoes and crafted a witty irreverence around its brand. Starbucks appropriated the coffee shop concept from Italy and gave it an American twist. Wal-Mart used small towns, as opposed to big cities, as the beachhead for its now-massive retail empire.
And so it is with Amazon. To say that Bezos is a disruptor would be an egregious understatement. He's perhaps the greatest disruptor running a business today. He blew the lid off of the book industry, he revolutionized what it means to be a discount retailer, and his company is now the vanguard of cloud computing.
While I hesitated to include ruthlessness as a trait that underlies success, I think I would do the subject a disservice if I didn't. Indeed, one of the most ruthless people alive is none other than the kindly Warren Buffett.
When Buffett called Bank of America CEO Brian Moynihan to offer his support for the then-ailing lender in 2011, it wasn't out of the goodness of his heart. Buffett smelled blood in the water. He knew Moynihan couldn't turn him down, and he capitalized on the opportunity by negotiating a sweetheart deal for Berkshire Hathaway that has only downside for long-term shareholders of the Charlotte-based bank.
There are no free lunches in this world. This is particularly true when you're up against the likes of Wal-Mart. In short, there wouldn't be an Amazon today if Bezos didn't drive a hard bargain and use the same ruthless tactics that his suppliers and competitors would otherwise use against him.
10. Business acumen
Of course, one can have all the ideas, intelligence, drive, and work ethic in the world and still fail to run a good business -- think Andrew Mason, the founder and former CEO of Groupon who was ousted by the company's board at the beginning of last year. To build a sustainable business model, one must also have business acumen.
How to run a successful business is something that's been written about ad nauseam. In the simplest of terms, what it boils down to is identifying one's core mission -- Jim Collins refers to this as the Hedgehog Concept in Good to Great -- and then pursuing it relentlessly.
In Bezos' case, that boils down to two things: first, eliminating inefficiencies in the system and thereby driving down costs, and second, keeping prices to the bare minimum and thereby maximizing revenue. Indeed, when all is said and done, virtually all of Amazon's success can be thought of in the context of these two goals.
John Maxfield owns shares of Bank of America. The Motley Fool recommends Amazon.com, Bank of America, Berkshire Hathaway, Nike, and Starbucks. The Motley Fool owns shares of Amazon.com, Bank of America, Barnes & Noble, Berkshire Hathaway, Microsoft, Nike, and Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.