Online bookstores, cloud services, Kindle, and the flywheel effect—none of these ideas originally came from Bezos.

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Recently, while researching Amazon, I was surprised to find that the origins of several of Amazon's core businesses were not initially from Bezos, including the original online bookstore, cloud services, Kindle, and even the famous flywheel effect.

But Bezos's traits determined Amazon's success in these businesses: First, he was inherently highly capable—joining a top quantitative fund on Wall Street at 26 and becoming the youngest vice president two years later speaks volumes. Second, he could see through the essence and the future at a glance and integrate teams to put ideas into practice. Third, rapid iteration—under the "customer first" philosophy, Amazon's businesses continuously evolved, far from just an online bookstore.

Here are a few stories that still seem legendary today and help us better understand Bezos and Amazon.

Ideas might not be hard—what's hard is executing them.
 

1. Amazon's original idea wasn't Bezos's brainchild but emerged from discussions among executives at D. E. Shaw & Co.

In 1990, 26-year-old Bezos joined D. E. Shaw & Co. and quickly became the youngest vice president. D. E. Shaw was one of Wall Street's earliest quantitative trading firms, and its founder, David E. Shaw, was also a legend—a former Columbia computer science professor, Morgan Stanley's VP of automated trading, and later the founder of D. E. Shaw and the "king of quant." After 2001, he focused on scientific research and became a member of the National Academy of Sciences.

In 1994, when the internet's opportunities arose, David believed the firm's unique positioning could leverage the internet's advantages. He began regular discussions with executives, including Bezos. At the time, they had several forward-thinking business plans: 1. Providing users with free email services with ads—the precursor to today's Gmail and Yahoo Mail. 2. An online platform for trading stocks and bonds—they founded a subsidiary for this in 1995 and sold it to Merrill Lynch a few years later.

David and Bezos were also brewing another idea they called "the everything store." Back then, some executives at D. E. Shaw believed the idea of a "store for everything" was simple: internet companies would bridge customers and manufacturers, making almost every product in the world available. Bezos was fascinated by this idea, but since D. E. Shaw was already pursuing the first two plans with David's deep involvement, Bezos felt a separate company was needed. He approached David about leaving to start his own venture. David said he understood Bezos's vision and fully supported it—he had gone through the same when leaving Morgan Stanley.

(Having such a boss was one of Bezos's lucky breaks.)
 

2. Amazon's early business model lacked technical sophistication but excelled in rapid iteration.

Amazon's initial online bookstore was primitive: Customers ordered books, Amazon then ordered them from distributors, and the books arrived days later before being shipped to customers. Sometimes, it took a week to deliver books. Amazon's core selling points were low prices and shipping to places without bookstores.

But a few measures that followed skyrocketed Amazon's business: 1) Bezos had all employees write book reviews—possibly the earliest internet community, with the first review being for a book by a Chinese author. 2) Amazon released a bestseller list, drawing attention from publishers and authors. 3) When other websites linked customers to Amazon for book purchases, they received an 8% commission—this affiliate marketing innovation extended Amazon's reach across the web, securing its position before competition arrived.

3. Amazon's famous flywheel effect was inspired by Jim Collins, author of Good to Great.

After the dot-com bubble burst in 2001, Amazon faced operational struggles. Once, Amazon invited management expert Jim Collins to discuss his upcoming book, Good to Great. He told Amazon executives, "You must understand where your company can be the best in the world."

Using Collins's definitions of the flywheel effect and self-reinforcement, Bezos and his team envisioned a virtuous cycle: lower prices attract more customers, more customers mean higher sales, which draws more sellers to the site. This also allows Amazon to profit more from fixed costs (like fulfillment centers and servers), and higher efficiency further lowers prices.

4. Amazon's cloud business originated from a computer book publisher, Tim.

Due to business collaborations, Tim and Bezos knew each other early on. In early 2000, Tim thought Amazon was too isolated and wanted to provide sales data—like letting publishers track trends to decide future publications. Bezos initially dismissed the idea.

By 2002, two things changed Bezos's mind: First, Bezos had long wanted to prove Amazon was a tech company, not just a retailer. While competing with Google in search technology, Amazon faced internal chaos, with many engineers leaving for Google—Bezos needed a breakthrough. Second, Tim demonstrated a tool he built to scrape rankings of his and competitors' books on Amazon. He told Bezos, "Businesses must consider not just what they gain from new tech but also how others can benefit." Bezos instantly saw the value of an open internet—it was like electricity for the digital age. Months later, he invited developers trying to "hack" Amazon's systems and officially announced AWS, which later evolved into infrastructure for storage, databases, and computing.

Another widely circulated origin story for AWS was denied internally. Some believed Amazon's retail business was seasonal—booming during peak months—so it could rent out excess server capacity in off-seasons. If true, Amazon would have to kick developers off servers every peak season.
 

5. What spurred Bezos to create the Kindle was Apple's iPod.

In early 2003, Amazon approached Apple about a music distribution partnership, but Steve Jobs refused. Jobs wanted a seamless, Apple-controlled experience without third parties. In April, Apple launched the iTunes Store and, within years, overtook Amazon, Best Buy, and Walmart to dominate music sales—stealing Amazon's CD business.

This gave Bezos a wake-up call: if books digitized like music, Amazon needed its own hardware. Despite technical limitations and a dying e-reader market, Bezos tasked the new team: "Your job is to kill your own business—make everyone selling physical books go out of business."

Note: The above stories are from The Everything Store.