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Thinking up business possibilities, in fact, was Bezos' job at D.E. Shaw, an unusual firm that prides itself on hiring some of the smartest people in the world and then figuring out what kind of work they might profitably do. David Shaw, a former professor of computer science at Columbia University, had been wooed to Wall Street by Morgan Stanley, where he specialized in the arcane field of quantitative analysis--using computers to spot trends in the market. He formed his own company in 1988, initially to carry on that kind of work, but with so much brainpower around the office, it seemed a shame to waste it all on Wall Street. It made sense to pursue other businesses too. During much of his four years at Shaw, Bezos "was sort of an entrepreneurial odd-jobs kind of a person," Shaw recalled recently.
Bezos had graduated from Princeton University, majoring in electrical engineering and computer science. The field was unplanned: he had chosen Princeton for its legendary physics department. Shortly after arriving, however, he discovered that he wasn't the smartest guy in the world after all. He felt outclassed by the physics jocks and gravitated to comp-sci.
His first job out of school was at Fitel, a start-up that was building a network to handle international financial trades. He spent about two years there, worked about the same amount of time at Bankers Trust, then got an interview at Shaw.
Actually, it was one of Shaw's partners who interviewed Bezos first and urged the boss to meet him, saying, "He's going to make someone a lot of money someday." Shaw agreed, understanding that Bezos was unusual not only for his balanced intellect--he could handle complex logic as well as articulate his thinking--but also for the overall package: smart, creative, personable, precisely the kind of person they wanted. Over time, Bezos became a specialist in researching business opportunities in insurance, software and then the booming Internet.
But how to take advantage of that online explosion? The Net had been, until 1994, a largely commerce-free zone. It was created by the Defense Department to keep its network of computers communicating in case of nuclear attack. The system then evolved into a network over which university and government researchers could exchange messages and data across most computer platforms.
The government decided to get out of the Internet business and allow private companies to step in and develop it. Bezos recalls, "I'm sitting there thinking we can be a complete first mover in e-commerce." He researched mail-order companies, figuring that things that sold well by mail would do well online. He made a list of the Top 20 mail-order products and looked for where he could create "the most value for customers." Value, in his equation, would be something customers craved: selection, say, or convenience or low prices. "Unless you could create something with a huge value proposition for the customer, it would be easier for them to do it the old way," he reasoned. And the best way to do that was "to do something that simply cannot be done any other way."