Marcus: On the other hand, the excitement of the place—the weird sense that you were making history as part of your job—was so palpable! Of course, all those people could have been kidding themselves. But in fact they were correct to sense that they were onto a huge thing, an enormous socioeconomic ripple, and that feeling was extremely contagious. So I showed up there with modest expectations. And within a few weeks, I drank the Kool-Aid—for what it’s worth—and became enormously excited, even though I didn’t know exactly where we were going.

Blodget: If you weren’t excited at that point, you were probably dead. Amazon’s growth, for twenty or so quarters from inception, was astronomical. It got to $100 million in revenue faster than almost any company in history, and this was in an industry that was not growing—the book business. Meanwhile, all of these sales were coming right out of the pocket of Barnes & Noble, smaller bookstores, and so forth.

Now, on Wall Street, the conventional wisdom was that as soon as B&N threw together a website, Amazon would be toast. This happened all the time during the Internet boom. People assumed that the industry incumbent would steamroll the upstart. In Amazon’s case, however, B&N effectively got nowhere. As you note in the book, you were able to protect your turf—

Marcus: I’ve always thought that B&N, the biggest bookseller in the United States, made a terrible mistake by not getting into online commerce six to twelve months earlier. If they had, I think things may have played out a little differently. Because although Amazon enjoyed periodic infusions of capital, B&N had infinitely more money and resources than we did. Jeff stayed ahead by means of brilliant PR, and by being more inventive—because Amazon wasn’t hobbled by the Old Economy way of doing business. Still, if B&N had jumped in faster, they might have grabbed a bigger slice of the market.

Blodget: I would say that’s probably true. But one of the reasons they did jump in was the spectacular success Amazon was having. If you look at B&N’s core competency—what they knew how to do—it was incredibly different from what you were figuring out on a daily basis, in a kind of Internet laboratory. True, Amazon was sometimes criticized for its kindergarten atmosphere of experimentation. Yet I don’t think the business would have survived if it hadn’t been running at 150 miles per hour during the initial phase. In fact, I would argue that this is what has to happen for a new industry to develop.

Marcus: I totally agree. The number of initiatives that Amazon rolled out and quickly folded is basically unknown to the public. They threw a lot of stuff at the wall, some of it almost invisibly. At one point, for example, Jeff became very enamored of the way Yahoo was presented, with everything stacked in these subject-based browsing categories. He thought that was the future. Amazon, with its storefront-like appearance, was going to be a dinosaur. So he had the company design a Yahoo-style front page, and said: Look, the switch is going to hurt, but we’re going to have to suck it up, because this is where the future is. They put it up for fifty percent of all visitors during a given day—and the revenue began to tank. As I recall, it dropped by two or three percent over the course of a single afternoon! And that was the end of it. I give Jeff credit for not insanely sticking to his guns and insisting that we follow this idea straight to the bottom.

Blodget: When you have such rapid growth, of course, very weak ideas can sometimes take hold—just because there’s so much opportunity. Which of the things that Amazon did during this period were internally viewed as mistakes right from the start? Did some of these turn out to be home runs?

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