In the winter of 1995 I cold called Jeff Bezos. At the time I was an associate at General Atlantic, a growth-stage investor in software companies. I was the first VC to call him; he took the call and we got along well immediately, in part because I’d found my way to him after purchasing this weird and compelling book on the Amazon web site.
Jeff is the single most impressive entrepreneur among the thousands I have met, and there was a shared passion around reading, so it is not surprising that I developed instant conviction about the business. We had several conversations, a partner at GA took charge of the discussion, and things gained momentum.
During the summer of 1996 the GA team iterated with Jeff on the terms of an investment. I vividly remember being in a hotel in Hong Kong, on a GA trip to explore the Asian tech investment landscape (more on that one day), and faxing a term sheet to him.
Just before signing it, one of his board members suggested speaking to a couple of other firms. Long story short, Kleiner Perkins was contacted, there was high interest, we got into a bidding war, and ultimately GA dropped out.
I have never had remorse about the outcome. You win some and you lose some, and there have been enough wins along the way. Amazon was a massive outlier for GA. It was an ecommerce business at the dawn of ecommerce, and therefore had gross margins way lower than software or even IT services. It was a small, unprofitable online bookstore (for that was all it was then), and had a founding CEO with no prior company-building experience. Indeed it is to GA’s great credit (and even more so to the credit of the partner involved) that an investment way outside the core strategy was taken seriously enough that a term sheet could be issued.
The outlines of this story are documented elsewhere (see here, for example, although many of the details are wrong), and this essay is not about the one that got away. This essay is about getting global.
So what is not documented except in my archived emails is that four years later I contacted Jeff about entering India. Emails were exchanged with his team, conference calls were had, proposals (from me) were sent. Ultimately it petered out — this occurred in 2000 and Amazon was dealing, as I was, with the dotcom crash. India was hardly something for Amazon to prioritize.
Now to the present. India is one of the highest priorities for Amazon. But the company is caught in an extremely expensive dogfight in India, spending billions. The story could have been very different if the company had taken small steps 15 years ago (or 5 years ago for that matter). Amazon will ultimately win in India, not because it can spend more than everybody else (though it can), but because it is a superbly run business that has out-thought, outflanked and out-innovated far more established and worthy competitors (hello Walmart). But a few inexpensive early moves would have led to victory a long time ago.
The Time Is Now
The firm I chair, Amasia, is built around the concept of getting global. The imperative to get global has dramatically increased over the last decade thanks to ubiquitous broadband, cheap devices, and the rise of a startup culture around the world (and hence copycat businesses).
There are offensive and defensive reasons to get global. On offense: entering new geographies expands the total addressable market; paradoxically helps attract customers in the original home market; and enhances product innovation. On defense: it protects against copycats entering your home market; it helps with recruiting and retaining the best people as often they want to see global ambitions; and it helps create differentiation against the home market competition.
Most of Amasia’s investments are in the United States, and much of the day-to-day value we add has nothing to do with going after global markets. But we strongly advise all our founders to find low-cost ways of experimenting with market entry outside their home market, earlier in the life cycle than the received wisdom would suggest.
Often the greatest obstacle is not the desire or capital. Running a company requires single-minded focus, and a “foreign adventure” may seem like a distraction. Modern education does not place a premium on geographic and cultural knowledge, and that can create insularity in management teams and investors. We at Amasia play the roles of cultural bridge and curiosity catalyst, in addition to providing more tangible assistance in several countries, but ultimately founders have to make the call to invest the time, resources and mental space.
Amazon has had the luxury of waiting 15 years, being well-capitalized and wildly successful in its home market, and launching from that springboard into Asia. It is our view that today’s high-growth companies do not have that kind of time and space.
And One More Thing
There are several anecdotes from those interactions with Jeff two decades ago, and one is worth recounting here. As some founders who have met me know, when I see unreasonable financial projections I often ask: “if such performance has not been achieved by anyone in the history of the world, why is it that you will?”
The night before Jeff was to present to the GA partnership, he and I were at the GA office, at that time an old townhouse in midtown Manhattan, printing out his presentation. I looked at his projections which had annual revenues in the hundreds of millions a few years out. I asked him to tone it down as I felt he’d lose credibility. He didn’t. Amazon exceeded those initial projections by a distance; the only time in my career I have seen that happen.
The secret sauce in the venture business consists largely of pattern recognition. There are many different kinds of patterns, and I have benefited from occasionally seeing them. But Jeff was and is sui generis — outside the patterns.
It was a great privilege to cross paths with him before he became “Jeff Bezos”.