Case 5: Amazon.com
In 1994, Jeffery Bezos noticed an important statistic about the Internet -- the fact that
its usage was growing at 2300 percent a year. He was quick to become a part of such rapid
growth; he began selling books on-line. He chose books over the vast number of products
that could be sold on-line because of their volume. There were 1.5 million
English-language books in print and 3 million books in all languages worldwide, while the
largest physical bookstore in the world only carried 175,000 of the 1.5 million titles.
Bezos made several decisions while starting his company; all of them seeming to be wise
ones. For example, although it would seem unimportant for a virtual business, he was very
selective in choosing a good location to start his business. He decided on Seattle: a
place with lots of technical talent, near a large number of books; a nice place to live,
and most importantly, it was in a small state -- to avoid customers having to pay sales
tax due to the businessís presence in that state.