In the late 1990s, Amazon was on the brink of collapse. The fledgling online bookstore faced mounting losses, skeptical investors, and an uncertain future. It was during this pivotal time that Jeff Bezos, Amazon’s founder and CEO, sought the advice of one of retail’s greatest minds: Costco’s co-founder and then-CEO, Jim Sinegal.
Their conversation over coffee would change the trajectory of Amazon and lay the foundation for what is now one of the most successful companies in history.
In an interview years later, Bezos recounted the coffee meeting with Sinegal, whose success in building Costco into a retail powerhouse had long fascinated him. “I wanted to learn from someone who truly understood how to create value for customers and maintain their loyalty,” Bezos said.
During the meeting, Bezos explained Amazon’s vision of becoming more than just an online bookstore. However, the company was hemorrhaging cash, and skeptics doubted the viability of e-commerce as a long-term business model.
Sinegal, known for his no-nonsense approach, offered Bezos straightforward advice: “Focus relentlessly on the customer. If you take care of your customers, everything else will fall into place.”
Sinegal’s emphasis on customer obsession struck a chord with Bezos, who had already championed the idea but realized it needed to be the company’s central ethos. He took several lessons from the meeting and applied them to Amazon:
- Customer-First Mentality: Sinegal shared Costco’s philosophy of delivering exceptional value through high-quality products at low prices. Bezos adopted this principle, leading Amazon to implement customer-centric policies such as easy returns, price transparency, and eventually the development of services like Prime for unparalleled convenience.
- Operational Efficiency: Sinegal highlighted the importance of cutting unnecessary costs without compromising value. Bezos applied this rigorously, finding ways to streamline Amazon’s operations, from its supply chain to its website design, creating the efficiencies that would later define its business model.
- Long-Term Thinking: Perhaps most impactful was Sinegal’s advice to prioritize sustainable growth over quick profits. Sinegal encouraged Bezos to ignore short-term criticism from Wall Street and stay focused on building a strong foundation for the future.
Amazon’s Transformation
The meeting reinforced Bezos’s commitment to customer obsession, which he declared as Amazon’s first and most important core value. Over the years, this principle drove innovations such as:
- Expanding beyond books to offer a wide range of products.
- Investing heavily in technology to create personalized shopping experiences.
- Launching Amazon Web Services (AWS), which became a massive revenue generator.
Amazon’s ability to keep customers at the center of its strategy enabled it to weather financial turbulence, outpace competitors, and earn customer trust on a global scale.
A Legacy of Mentorship
Sinegal, who retired from Costco in 2018, has downplayed his role in Amazon’s success, attributing it to Bezos’s vision and relentless drive. Still, Bezos has often credited mentors and role models, including Sinegal, for shaping his leadership philosophy.
“Every piece of advice, every insight, is a brick in the foundation,” Bezos once said. “The coffee with Jim Sinegal? That was a cornerstone.”
From Near-Death to Dominance
Today, Amazon is a $2 trillion empire, dominating e-commerce, cloud computing, entertainment, and more. While many factors contributed to its rise, the guidance from Costco’s founder served as a key turning point, helping Bezos and his team navigate the company’s most challenging period.
The story of that coffee meeting underscores the importance of mentorship, collaboration, and the power of simple but profound advice: take care of your customers, and they will take care of your business.
