During the 1990s the two most popular forms of media were books and music CDs. If you were a teenager or older in that decade you’ll probably remember it seemed like there was a Borders in every city and you could hardly drive a mile without seeing another dedicated music store. That’s not to mention that when you walked into a Best Buy or Target, you would be greeted with aisle upon aisle of music CDs.
So when Jeff Bezos started Amazon in 1994, why did he opt for the company’s first product sold to be books instead of CDs? Thanks to a 22-year-old video that’s recently been unearthed, we now know why.
The video was rediscovered by analyst Brian Roemmele and shared on Twitter by him earlier this week (via Business Insider). The video is from a June 1997 Special Libraries Conference, where a young Jeff Bezos appeared to discuss his then only three-year-old company Amazon:
Three years ago I was in New York City working for a quantitative hedge fund when I came across the startling statistic that web usage was growing at 2,300% a year so I decided I would try and find a business plan that made sense in the context of that growth and I picked books as the first best product to sell online.
I picked books as the first best product to sell online, making a list of like 20 different products that you might be able to sell. Books were great as the first best because books are incredibly unusual in one respect, that is that there are more items in the book category than there are items in any other category by far. Music is number two, there are about 200,000 active music CDs at any given time. But in the book space there are over 3 million different books worldwide active in print at any given time across all languages, more than 1.5 million in English alone. So when you have that many items you can literally build a store online that couldn’t exist any other way.
In the video Bezos also makes the claim that attention “is the scarce commodity of the late 20th century” and he says Amazon was able to capture people’s attention by giving them something that had real value–an online marketplace that makes shopping for the most prolific media out there easy–and that attention led to Amazon not having to advertise anywhere at all during its first year of existence. Bezos says Amazon’s only exposure during its freshman year came from word of mouth and journalists writing articles about the then-new company.
The June 1997 video is notable too because just a month earlier Amazon went public for only $18 a share. As of yesterday’s close, Amazon was worth $1,778 per share.