by Jim Aisner, HBS Communications

A funny thing happened to Jeff Bezos, founder and CEO of Amazon.com, as he was about to make his way to Boston to deliver a keynote address at Cyperposium 2000. His wife, MacKenzie, showed signs that their first child might come into the world a bit earlier than expected. Needless to say, the father-to-be would be staying in Seattle.

But technologically speaking, that didn't keep Bezos away from the conference. Given a window of opportunity by Mother Nature, he appeared on a large video screen in the Business School's Burden Auditorium, where he spoke with enthusiasm and humor to a full house of some 1,000 participants.

Introduced by Amazon COO Jeff Galli, who had flown into Boston just in case the CEO was otherwise engaged, Bezos first reminded his listeners that the key to Amazon's success since its launch in July 1995 has been its intense focus on the customer. That involves three things, he explained: 1) hearing what they want and figuring out how to give it to them; 2) inventing new ways to attract and serve them; and 3) personalizing the Internet shopping experience so that customers see the Web site as something developed specifically with them in mind.

The bulk of Bezos's remarks, however, centered on a discussion of what he described as the "seven big myths of the Internet" — conventional wisdom that he was eager to debunk.

• Myth # 1: The Internet changes everything. Not really, according to Bezos, since human beings like things certain ways, no matter how much the technology advances. For instance, physical stores aren't going away any more than movie theaters did with the advent of television. "People like to go outside and get together with others," Bezos observed. Since bricks-and-mortar operations can't compete with e-commerce on price, however, they'll focus on other things, such as making shopping a more entertaining experience.
• Myth #2: There are no barriers to entry on the Internet. If that's the case, asked Bezos, how do you explain the fact that Amazon and other e-commerce companies are investing hundreds of millions of dollars in their businesses. The fact of the matter is, the barriers to entry on the Internet are high and getting higher in the face of technological developments that will make today's online stores seem quaint at best in the next five to ten years.
• Myth #3: Intermediaries are dead. Intermediaries are a fact of life to some degree, Bezos asserted. The litmus test will be who adds value and who doesn't. Those that don't will be "toast."
• Myth #4: There are going to be only a few winners in the Internet economy. Bezos doesn't believe that one for a second. "The world of e-commerce will be as richly varied as the physical world, probably more so," he said, "because more business models are possible online." But that doesn't mean that success is in the cards for everyone, he cautioned. "I liken it to the Cambrian era 550 million years ago, which saw the development of multicelled life. While nature tried every kind of experiment possible, the creation of new species was offset by the extinction of others."
• Myth #5: It's easy for bricks-and-mortar retailers to extend their business. Forget about it, said Bezos. It's an easy trap for people to fall into, he explained, because they reason that a store is a store, whether it's physical or on line. Not so. Take books, for example. Online sellers are essentially in the technology business; off-line operations are in the real estate business. One group deals mainly with variable costs, the other with fixed costs. Below the superficial similarities, the differences run deep.
• Myth #6: Current market leaders can't fail. If they take their eyes off the customer, just watch them, said Bezos. In addition, many business pioneers were good at risk taking until they became successful and had something to lose. Then they fell off the leading edge and never recovered.
• Myth #7: Every company needs an Internet strategy. Not. "The Internet is an enabling horizontal layer that is causing broad disruptions across a big part of the economy, but it's not for every industry," Bezos concluded. "Yet you see people making business decisions based on the Internet, even where it doesn't belong."

Taking questions from the floor and from the world (via e-mail), Bezos addressed such issues as broadband ("It will dramatically change the user experience," particularly when it comes to people's homes), the importance of getting an Internet company's back-end operations right, and the need to create consistent brand equity.

Bezos concluded his comments with some advice for the many aspiring entrepreneurs in the audience, urging them to take advantage of an experience in a best-practices company before setting out on their own — as he had done for nearly five years in New York City before founding Amazon.com. "Don't make decisions based on the assumption that Internet opportunities will be gone in the next five years. That won't happen. Huge opportunities will be created over the next twenty years."